Is it true the statement that if a firm’s technology exhibits the decreasing return to scale,...
- Is it true the statement that if a firm’s technology exhibits the decreasing return to scale, average production cost is increasing.
- If it is true, show the proof. If not, show a counter example.
- How about the reverse of the above statement? If the reverse is true, show the proof. If not, show a counter example.
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Is it true the statement that if a firm’s technology exhibits
the decreasing return to scale,...
A firm’s technology of production can be described by Q(?, ?) = ?2 ? 2 ....
A firm’s technology of production can be described by Q(?, ?) = ?2 ? 2 . Labor exhibits _______ marginal product, and the corresponding isoquants slope downward at _______rate as the firm moves from left to right along an isoquant. A. an increasing; an increasing B. a constant; an increasing C. an increasing; a decreasing D. a decreasing; a decreasing E. none of the above
Suppose that a firm’s production function exhibits increasing returns to scale. Using a suitable diagram, illustrate...
Suppose that a firm’s production function exhibits increasing returns to scale. Using a suitable diagram, illustrate how a firm’s input choices and costs would vary between producing the whole output at home versus off-shoring a portion of the output to a foreign country that has relatively cheaper labour
QUESTION 10 Do the following production functions exhibit increasing, decreasing or constant return to scale? a....
QUESTION 10 Do the following production functions exhibit increasing, decreasing or constant return to scale? a. q-K2L exhibits b. q-K0.310.7 exhibits c. q-k0.310.3 exhibits d. q-K+L exhibits e. q-K0.7+L0.7 exhibits
) Show whether each of the following production functions exhibits increasing, constant, or decreasing returns to...
) Show whether each of the following production functions exhibits increasing, constant, or decreasing returns to scale in ? and ?. (Assume A is a factor of production). a. (1pt) ? = ?^1/3(L^2/3) +A b. (1pt) ? = ?^1/3(L^2/3) - A
1. For a constant returns to scale production function: a. marginal costs are constant but the...
1. For a constant returns to scale production function: a. marginal costs are constant but the average cost curve as a U-shape b. both average and marginal costs are constant c. marginal cost has a U-shape, average costs are constant d. both average and marginal cost curves are U-shaped 2. The production function q = 10K +50L exhibits: a. increasing returns to scale b. decreasing returns to scale c. constant returns to scale d. none of the above
A firm has the following production function: ?(?1, ?2) = ???{?1, 2?2} A) Does this firm’s technology exhibit constant...
A firm has the following production function: ?(?1, ?2) = ???{?1, 2?2} A) Does this firm’s technology exhibit constant, increasing, or decreasing returns to scale? B) What is the optimality condition that determines the firm’s optimal level of inputs? C) Suppose the firm wants to produce exactly ? units and that input 1 costs $?1 per unit and input 2 costs $?2 per unit. What are the firm’s conditional input demand functions? D) Using the information from part D), write...
Returns to scale. A production function has constant returns to scale with
Returns to scale. A production function has constant returns to scale with respect to inputs with inputs K and L if for any z > 0: F(z · K, z ·L) = zF(K, L), For example, for a production function with constant returns to scale, doubling the amount of each input (i.e., setting z = 2) will lead to a doubling of the output from the production function. A production function has increasing returns to scale if for any z >1: F(z ·...
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.
QUESTION 7 The function q= 2K + L exhibits: a. constant returns to scale b. increasing...
QUESTION 7 The function q= 2K + L exhibits: a. constant returns to scale b. increasing returns to scale c. decreasing returns to scale d. any of the above depending on the values for K and L 10 points QUESTION 8 The short run is defined to be the period of time during which: a. at least one input is fixed b. all inputs are variable c. at least one input is variable d. all inputs are fixed 10...
22. Which of the following is true for a firm that enjoys economies of scale? a. Marginal cost is increasing as output i...
22. Which of the following is true for a firm that enjoys economies of scale? a. Marginal cost is increasing as output increases. b. Average total cost is falling as output increases. c. Marginal cost is constant as output increases. d. Marginal revenue is falling as output increases. 23. The figure below shows short-run average total cost curves for a firm under four different production technologies. Assume that there are only four different technologies that the firm could use. Refer...
QUESTION 10 Do the following production functions exhibit increasing, decreasing or constant return to scale? a. q-K2L exhibits b. q-K0.310.7 exhibits c. q-k0.310.3 exhibits d. q-K+L exhibits e. q-K0.7+L0.7 exhibits
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