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The answer is b. The larger the proportion labor costs and the harder it is to substitute capital for labor.
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An increase in the wage rate will have a greater effect on average costs a. the...
Question 15 As the average annual inflation rate the volatility of inflation tends to increases increase...
Question 15 As the average annual inflation rate the volatility of inflation tends to increases increase increases: remain stable decreases increase decreases remain stable Question 16 In the Cobb Douglas production function Y. AK 3/4 1/4 capital is a more expensive input than abor capital has a larger share in national income than does labor capital is more plentiful than labor diminishing returns to capital are three times greater than are diminishing returns to labor
An increase in long-run average costs resulting from increases in output is __________. Question 18 options:...
An increase in long-run average costs resulting from increases in output is __________. Question 18 options: attributed to constant returns to scale attributed to diseconomies of scale attributed to the law of diminishing marginal product attributed to economies of scale
28) The law of diminishing returns, as it applies to labor, means that A) the marginal...
28) The law of diminishing returns, as it applies to labor, means that A) the marginal product of labor will eventually be a horizontal line at zero. B) the average product of labor starts to decline before the marginal product of labor. C) total output eventually decreases. D) the average product of labor increases at a decreasing rate. E) the marginal product of labor eventually decreases as more labor is added with capital held fixed. 29) A firm's short-run labor...
1. How does a profit-maximizing firm that is operating in a competitive labor market respond to...
1. How does a profit-maximizing firm that is operating in a competitive labor market respond to an increase in the wage rate? A. The firm will demand less capital due to the substitution effect. B. The firm will demand more labor due to the substitution effect. C. The firm will produce less output due to the scale effect. D. The firm will demand more capital due to the scale effect. E. The firm will demand more labor due to the...
Assume the wage rate is w=$2, and the rental rate of capital is r=$7. The marginal...
Assume the wage rate is w=$2, and the rental rate of capital is r=$7. The marginal product of labor is MPL=30, and the marginal product of capital is MPK=90. If the firm wishes to minimize its production costs, and continue to produce the same level of output, it should: a) increase capital, reduce labor b) increase labor, reduce capital c) do nothing d) increase both capital and labor
Average total costs rise because: Average fixed costs increase. Decreasing returns to scale. Increasing returns to...
Average total costs rise because: Average fixed costs increase. Decreasing returns to scale. Increasing returns to scale. Marginal costs increase and rise above average total costs. The cost of coordinating inputs rise.
Most firms will eventually face increasing average costs as they try to increase output. The firm...
Most firms will eventually face increasing average costs as they try to increase output. The firm finds that each extra unit of output requires more inputs to produce than previous units, an outcome described as the law of diminishing marginal returns. The law of diminishing marginal returns states that as you try to expand output, your marginal productivity (the extra output associated with extra inputs) eventually declines The law of diminishing returns can limit the economies of scale and economies...
Q1 [30 points] Show in a diagram using isoquants that a production function can have diminishing...
Q1 [30 points] Show in a diagram using isoquants that a production function can have diminishing marginal return to a factor and constant returns to scale? With the help of a diagram explain the concepts of "isoquant", "diminishing marginal return to a factor", and "constant returns to scale". What are the similarities and differences between indifference curves and isoquants. Q2 [30 points Assume that a firm has a fixed-proportions production function, in which one unit of output is produced using...
Wage Rate 'o, 'O, 'D, Quantity of Labor 10. Refer to the graph. A move from...
Wage Rate 'o, 'O, 'D, Quantity of Labor 10. Refer to the graph. A move from b to a along labor demand curve D, would result from O A. a decrease in the wage rate O B. an increase in the demand for the product that this labor is helping to produce. C. a decrease in the price of a substitute resource, assuming that the substitution effect exceeds the output effect O D. an increase in the wage rate O...
44. What determines the ratio of the wage to rental rate of capital in a competitive,...
44. What determines the ratio of the wage to rental rate of capital in a competitive, profit-maximizing economy with constant returns to scale? a. the quantity of economic profits earned by firm owners b. the interest rate c. the ratio of public saving to private saving d. the marginal productivity of labor relative to the marginal productivity of capital
Question 15 As the average annual inflation rate the volatility of inflation tends to increases increase increases: remain stable decreases increase decreases remain stable Question 16 In the Cobb Douglas production function Y. AK 3/4 1/4 capital is a more expensive input than abor capital has a larger share in national income than does labor capital is more plentiful than labor diminishing returns to capital are three times greater than are diminishing returns to labor
28) The law of diminishing returns, as it applies to labor, means that A) the marginal product of labor will eventually be a horizontal line at zero. B) the average product of labor starts to decline before the marginal product of labor. C) total output eventually decreases. D) the average product of labor increases at a decreasing rate. E) the marginal product of labor eventually decreases as more labor is added with capital held fixed. 29) A firm's short-run labor...
Most firms will eventually face increasing average costs as they try to increase output. The firm finds that each extra unit of output requires more inputs to produce than previous units, an outcome described as the law of diminishing marginal returns. The law of diminishing marginal returns states that as you try to expand output, your marginal productivity (the extra output associated with extra inputs) eventually declines The law of diminishing returns can limit the economies of scale and economies...
Q1 [30 points] Show in a diagram using isoquants that a production function can have diminishing marginal return to a factor and constant returns to scale? With the help of a diagram explain the concepts of "isoquant", "diminishing marginal return to a factor", and "constant returns to scale". What are the similarities and differences between indifference curves and isoquants. Q2 [30 points Assume that a firm has a fixed-proportions production function, in which one unit of output is produced using...
Wage Rate 'o, 'O, 'D, Quantity of Labor 10. Refer to the graph. A move from b to a along labor demand curve D, would result from O A. a decrease in the wage rate O B. an increase in the demand for the product that this labor is helping to produce. C. a decrease in the price of a substitute resource, assuming that the substitution effect exceeds the output effect O D. an increase in the wage rate O...
44. What determines the ratio of the wage to rental rate of capital in a competitive, profit-maximizing economy with constant returns to scale? a. the quantity of economic profits earned by firm owners b. the interest rate c. the ratio of public saving to private saving d. the marginal productivity of labor relative to the marginal productivity of capital
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