Summary: The recession induced by the Covid-19 pandemic resulted in many job openings, but businesses that laid off workers are expecting to need fewer employees in the future. The recession was a catalyst for employers to invest in automation and other changes designed to limit hiring. Although output in the first quarter of 2021 was down 0.5 percent from the end of 2019, workers put in 4.3 percent fewer hours than they did prior to the health crisis. Classroom Application: A technological change is a change in the ability of a firm to produce a given amount of output from a given quantity of productive resources. A production function is the relationship between the productive resources (or inputs) employed by the firm and the maximum output produced with those resources. Questions: Draw and label a graph that depicts a short-run production function for widgets. Assume that widget production requires labor, a variable input, and physical capital, a fixed input. The production function should have an initial section which represents a range of output over which there are increasing marginal returns as more labor is used to produce widgets, and a range of output over which there are diminishing marginal returns as more labor is used to produce widgets. In the graph identify the point at which the marginal product of labor is at its highest value. Refer to the graph you drew to answer the previous question. From the article: "The pandemic accelerated some of the company's plans to automate factories and implement more digital technology, said Paolo Dal Cin, the executive vice president of operations and supply chain at Raytheon..." Briefly explain how a change in technology, similar to that which will be employed by Raytheon, would affect the graph of your production function. An economics student argues: "Diminishing marginal returns to labor are the result of hiring additional workers who are not as skilled or hard-working as the workers who are initially hired." Briefly explain why you either agree or disagree with this statement In the short run, when there are increasing marginal returns to labor will the marginal cost of production increase, decrease, or remain the same? In the short run, when there are diminishing marginal returns to labor will the marginal cost of production increase, decrease, or remain the same? Briefly explain your answers. Refer to your answers to the previous question. Draw and label a graph that depicts a firm's short-run marginal cost curve. At which point on the marginal cost curve would the firm produce to maximize its profit (or nimize its losses)? . . Summary: The recession induced by the Covid-19 pandemic resulted in many job openings, but businesses that laid off workers are expecting to need fewer employees in the future. The recession was a catalyst for employers to invest in automation and other changes designed to limit hiring. Although output in the first quarter of 2021 was down 0.5 percent from the end of 2019, workers put in 4.3 percent fewer hours than they did prior to the health crisis. Classroom Application: A technological change is a change in the ability of a firm to produce a given amount of output from a given quantity of productive resources. A production function is the relationship between the productive resources (or inputs) employed by the firm and the maximum output produced with those resources. Questions: Draw and label a graph that depicts a short-run production function for widgets. Assume that widget production requires labor, a variable input, and physical capital, a fixed input. The production function should have an initial section which represents a range of output over which there are increasing marginal returns as more labor is used to produce widgets, and a range of output over which there are diminishing marginal returns as more labor is used to produce widgets. In the graph identify the point at which the marginal product of labor is at its highest value. Refer to the graph you drew to answer the previous question. From the article: "The pandemic accelerated some of the company's plans to automate factories and implement more digital technology, said Paolo Dal Cin, the executive vice president of operations and supply chain at Raytheon..." Briefly explain how a change in technology, similar to that which will be employed by Raytheon, would affect the graph of your production function. An economics student argues: "Diminishing marginal returns to labor are the result of hiring additional workers who are not as skilled or hard-working as the workers who are initially hired." Briefly explain why you either agree or disagree with this statement In the short run, when there are increasing marginal returns to labor will the marginal cost of production increase, decrease, or remain the same? In the short run, when there are diminishing marginal returns to labor will the marginal cost of production increase, decrease, or remain the same? Briefly explain your answers. Refer to your answers to the previous question. Draw and label a graph that depicts a firm's short-run marginal cost curve. At which point on the marginal cost curve would the firm produce to maximize its profit (or nimize its losses)