please answer the questions:

1.At a management breakfast, two managers were overheard arguing about the following statement: "A manager should never hire another worker if the new person causes diminishing returns." Is this statement correct? If so, why? If not, explain why not.

2.Engineers at the national research laboratory build a prototype car that could be driven 47 km per liter of RON95 fuel.They estimated that in mass production the car would cost $60,000 per unit to build.The engineers argued that the Congress should force U.S. car makers to build this energy-efficient car.

(a)Is energy efficiency the same thing as economic efficiency? Explain.

(b)Under what circumstances would the energy-efficient car described here be economically efficient?

(c)If the goal of a society is to get the most benefit from its limited resources, then why not ignore economic efficiency and produce the energy-saving car?

3.An article in BusinessWeek warned of the dangers of deflation as the collapse of numerous Asian economies was creating worries that Asia might try to "export its way out of trouble" by oversupplying everything from cars to semiconductor.Deflation did indeed follow.The CEO of General Motor expressed his frustration that it was impossible to get price increase.He further warned that companies had no choice but to boost productivity to gain profits as price declined for products.

Using short-run production function and cost theory, comment on this advice.

4.How does the theory of efficient production apply to managers of government departments that are not run for profits?How about nonprofit clubs that collect just enough fees from their members to cover the cost of operation?

5.Trump Corporation is considering buying out Biden Corporation that is now barely operating at a profit. You recommend the buyout because you believe that the new management could substantially reduce production costs, and thereby increase profit to a quite attractive level.You collect the following product information in order to convince the CEO of Trump Corporation that Biden is indeed operating efficiently: MP_L = 10; MP_K = 15; P_L = $20; and P_K = $15.

Explain how these data provide evidence of inefficiency.How could the new manager of Trump improve efficiency?

6.Proton-Metal, a small manufacturer of sheet-metal body parts for Proton, estimates its long-run production function to be

Q = -0.015625K³L³ + 10K²L²

Where Q is the number of body parts produced daily, K is the number of sheet-metal presses in its manufacturing plant, and L is the number of labor-hours per day of sheet-metal workers.Proton-Metal is currently operating eight sheet-metal presses.

(a)What is the total product function for Proton-Metal?The average product function? The marginal product function?

(b)Managers at Proton-Metal expect the marginal product of additional workers to fall beyond what level of labor employment?

(c)Proton-Metal plans to employ 50 workers.Calculate total product, average product, and marginal product.