Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

For each of three production functions below, determine: (1) whether there are diminishing marginal returns to labor in the short-run, and (2) the returns to

image text in transcribedimage text in transcribed

image text in transcribedimage text in transcribed
For each of three production functions below, determine: (1) whether there are diminishing marginal returns to labor in the short-run, and (2) the returns to scale. Determine: (1) whether there are diminishing marginal returns to labor in the short-run, and (2) the returns to scale. f (L,K) = 2L + 3K Select one: O a. It is diminishing marginal returns to labor; it is constant returns to scale. O b. It is not diminishing marginal returns to labor; it is decreasing returns to scale. O c. It is not diminishing marginal returns to labor; it is constant returns to scale. O d. It is diminishing marginal returns to labor; it is decreasing returns to scale. O e. It is not diminishing marginal returns to labor; it is increasing returns to scale. O f. It is diminishing marginal returns to labor; it is increasing returns to scale. Determine: (1) whether there are diminishing marginal returns to labor in the short-run, and (2) the returns to scale. f (L,K) = 4L 0.75K0.5 Select one: O a. It is not diminishing marginal returns to labor; it is constant returns to scale. O b. It is not diminishing marginal returns to labor; it is increasing returns to scale. O c. It is not diminishing marginal returns to labor; it is decreasing returns to scale. O d. It is diminishing marginal returns to labor; it is decreasing returns to scale O e. It is diminishing marginal returns to labor; it is increasing returns to scale. O f. It is diminishing marginal returns to labor; it is constant returns to scale. Determine: (1) whether there are diminishing marginal returns to labor in the short-run, and (2) the returns to scale. f (L,K) = min {0.5L , 0.5K} Select one: O a. It is not diminishing marginal returns to labor; it is increasing returns to scale. O b. It is diminishing marginal returns to labor; it is increasing returns to scale. O c. It is diminishing marginal returns to labor; it is constant returns to scale. O d. It is not diminishing marginal returns to labor; it is decreasing returns to scale. O e. It is not diminishing marginal returns to labor; it is constant returns to scale. O f. It is diminishing marginal returns to labor; it is decreasing returns to scale.For the next three questions, suppose a firm's production function is q = In (L) + In (K). The cost of labor is fixed at w = 1 and the cost of capital is fixed at r = 4. Suppose that capital is fixed at K = 1 in the short-run. Does the production exhibit diminishing marginal returns to labor? Select one: O a. Yes O b. No Find the long-run cost function. Select one: O a. LRC = 3 0.5q O b. LRC =6 0.5q O c. LRC =5 0.5q O d. LRC =4 0.5q Find the long-run average cost function. What scale properties does this cost function display when q > 2? Select one: O a. economies of scale O b. no economies of scale O c. diseconomies of scale

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Essentials Of Advanced Macroeconomic Theory

Authors: Ola Olsson ]

1st Edition

9780415685085

More Books

Students also viewed these Economics questions

Question

What is net income? What information does it convey?

Answered: 1 week ago