You are watching: A basic assumption of the short run is that a firm:
Which of the following is a Cobb-Douglas production function? Q = 2K/3L Q = f(K, L)Q = K^0.50L^0.75 Q = 5K + 2.5L
Suppose a firm"s short-run production feature is provided by Q = 16L0.8. What is the marginal product of the fourth worker? 1.85 4910 36
Which situation will most likely provide climb to diminishing marginal product of labor? Hell"s Kitchen, which has sufficient counter area for 3 cooks per change, decides to hire a fourth cook per transition. A landscaping firm relocations all of its self-moved lawnmowers via press mowers. Plasma television manufacturers are going out of service bereason of boosted competition from LCD televisions. Nevaeh"s Kitchen undertakes a huge development, doubling both the dimension of its kitchen and variety of cooks.
Hell"s Kitchen, which has sufficient counter space for three cooks per change, decides to hire a fourth cook per change.
In the short run, the marginal product of labor: proceeds to rise so lengthy as the firm adds labor gradually.will eventually fall. is constantly diminishing. constantly rises bereason laborers become more efficient via experience.
In the lengthy run, because firms have the right to adjust both funding and also labor: firms fire employees, replacing the labor performance through capital. firms will thrive. production is even more expensive bereason firms should invest in both labor and funding. the impact of diminishing marginal returns is decreased.
Which of the adhering to statements is (are) TRUE?I. If labor and resources are perfect substitutes in production, the isoquant is a downward-sloping line. II. If a firm requirements to usage inputs in addressed propercentage such that the resources to labor proportion is constantly 2, the firm"s isoquants are L-shaped.III. If the production attribute is given by Q = min(14, 7), the firm deserve to produce, at minimum, 21 units of output.
Why are the slopes of isoexpense lines constant? bereason firms need to use much less labor if employing more funding because the marginal price of technological substitution of labor for resources is continuous bereason firms have to usage funding and also labor inputs in resolved prosections because firms have the right to hire as a lot of an input as they desire without transforming wperiods or rental rates
Suppose the wage rate is $25 per hour and the rent on resources is $50 per hour. The equation for the isoprice line is offered by: C = 75LK.C = 25L + 50K. C = 75(L + K). C = 2K/L.
Which of the following statements ideal exemplifies the firm"s constrained minimization problem? The firm desires to produce as much output as possible by choosing worths of L and K that minimize RK + WL.The firm desires to produce as much output as possible topic to the constraint that C = RK + WL. The firm desires to produce a offered amount of output by selecting values of L and also K that minimize RK + WL. The firm desires to create a given quantity of output by choosing worths of W and R that minimize RK + WL.
The firm desires to develop a offered amount of output by choosing values of L and also K that minimize RK + WL.
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Suppose a firm is creating 2,475 units of output by hiring 50 employees (W = $20 per hour) and also 25 devices of resources (R = $10 per hour). The marginal product of labor and also marginal product of resources are 40 and also 25, respectively. Is the firm minimizing the expense of developing 2,475 systems of output? Yes, the ratio of the number of employees to the wage equates to the proportion of the number of devices of funding to the rental rate. No, the firm have to usage even more labor and also less resources. No, the firm must usage even more of both labor and also funding. No, the firm have to use more resources and also less labor.