Question

Evaluate whether the statement is true or false. Explain why.

a. If average product is greater than marginal product, average product will increase as input increases.

b. If marginal product is decreasing, total product is decreasing.

c. In the short run, marginal cost is increasing if the marginal product is increasing.

d. If MRTS is increasing, an isoquant is convex.

Answer 1

A) false

If AP> MP, then TP shape is rising concave, thus total output is rising at a decreasing rate.

Then AP will fall

B) false

Total product TP, will decrease if MP is negative.

If MP is decreasing but positive, then TP will rise

C) false

MC will rise if MP falls

D)false

isoquant are convex only when MRTS is diminishing