assignment 4

Which would not increase the productivity of labor?

an increase in the size of labor force

When labor usage is at 12 units, output is 36 units. From this we may infer that

average product of labor is 3 output/labor usage

the link between the productivity of labor and the standard of living is

that over the long run, consumers' rate of consumption is not related to labor productivity.

according to the law of diminishing returns

the marginal product of an input will eventually decline

if the isoquants are straight lines then

the marginal rate of technical subsitution of inputs is constant

the law of diminishing returns assumes that

there is at least one fixed input

Marginal product crosses the horizontal axis (is equal to zero) at the point where

total product is maximized

the law of diminishing returns applies to

the short run only

5. Writing total output as Q, change in output as ∆Q, total labor employment as L, and change in labor employment as ∆L, the marginal product of labor can be written algebraically as

ΔQ / ΔL.

the short run is

a time period where at least one input is fixed

Which of the following inputs are variable in the long run?

labor capital and equipment plant size

the marginal product of an input is

. the addition to total output due to the addition of the last unit of an input, holding all other inputs constant.

Quantity of Labor Input (L) Total Output (Q) 0 0 1 100 2 190 3 270 What is the marginal product of 2nd labor (i.e. when L=2)?

90

Quantity of Labor Input (L) Total Output (Q) 0 0 1 100 2 190 3 270 What is the average product of labor when L=2?

95

what describes the graphical relationship between average product and marginal product

C. Marginal product cuts average product from above, at the maximum point of average product.

why do firms tend to experience decreasing returns to scale at high levels of output

Firms face more problems with coordinating tasks and communications among managers and workers at very high levels of output.

when production isoquants are shown in a diagram as 90 degree angles

capital and labor whill be used in fixed proportions

if input prices are constant a firm with increasing returns to scale can expect

costs to go up less than double as output doubles

which would increase productivity of labor

increase in quality of capital increase in quantity of capital increase in trehcnology increase in effiency of energy

an isoquant

is a curve that shows all combinations of inputs that yield the same total output

When the average product is decreasing, marginal product

is less than the average product

A construction company builds roads with machinery (capital, K) and labor (L). If we plot the isoquants for the production function so that labor is on the horizontal axis, then a point on the isoquant with a small MRTS (in absolute value) is associated with high ________ use and low ________ use.

labor, capital

increasing returns to scale production means

less than twice as much of all inputs are required to double output

The slope of the total product curve is the

marginal product

the rate at which one input can be reduced per additional unit of the other unit while holding output constant is measured by the

marginal ratte of techinal subsituion

does it make sense to consider the returns to scale production in the short run

no we cannot cange all of the production inputs in the short run

. A function that indicates the maximum output per unit of time that a firm can produce, for every combination of inputs with a given technology, is called

production function

If capital is measured on the vertical axis and labor is measured on the horizontal axis, the slope of an isoquant can be interpreted as the

rate at which the firm can replace capital with labor without changing the output rate.