1. What is a production function? How does a long-run

production function differ from a short-run production

function?

2. Why is the marginal product of labor likely to increase

initially in the short run as more of the variable input

is hired?

3. Why does production eventually experience diminishing

marginal returns to labor in the short run?

4. You are an employer seeking to fill a vacant position

on an assembly line. Are you more concerned with the

average product of labor or the marginal product of

labor for the last person hired? If you observe that your

average product is just beginning to decline, should you

hire any more workers? What does this situation imply

about the marginal product of your last worker hired?

5. What is the difference between a production function

and an isoquant?

6. Faced with constantly changing conditions, why

would a firm ever keep any factors fixed? What criteria

determine whether a factor is fixed or variable?

7. Isoquants can be convex, linear, or L-shaped. What

does each of these shapes tell you about the nature

of the production function? What does each of these

shapes tell you about the MRTS?

8. Can an isoquant ever slope upward? Explain.

9. Explain the term "marginal rate of technical substitution."

What does a MRTS 4 mean?

10. Explain why the marginal rate of technical substitution

is likely to diminish as more and more labor is

substituted for capital.

11. Is it possible to have diminishing returns to a single

factor of production and constant returns to scale at

the same time? Discuss.

12. Can a firm have a production function that exhibits

increasing returns to scale, constant returns to scale, and

decreasing returns to scale as output increases? Discuss.

13. Suppose that output q is a function of a single input,

labor (L). Describe the returns to scale associated

with each of the following production functions:

1a2 q = L/2 1b2 q = L2 + L 1c2 q = log1L2