Exam 6: Firms and Production

For the following, please answer "True" or "False" and explain why. -Were it not for the law of diminishing marginal returns,we could grow the world's food supply from a flowerpot.

Long-Run Production: Two Variable Inputs -At Joey's Lawncutting Service,the production function is represented as: q = min(m,l),where q is the quantity of lawns mowed.The inputs are m,the lawn mower,and l,the laborer.Which graph in the above figure best represents the isoquants for Joey's Lawncutting Service when capital per day is on the vertical axis and labor per day is on the horizontal axis?

Consider the following short-run production function: q = 5L² - 1/3 L³.At what level of L do diminishing marginal returns begin? At what level of L do diminishing returns begin?

In Sewei's lawnmowing business,in order to produce each mowed lawn,Sewei must hire exactly one unit of capital (a lawnmower)and exactly one unit of labor.Describe the elasticity of substitution between labor and capital.

Long-Run Production: Two Variable Inputs -At Joey's Lawncutting Service,a lawn mower cannot cut grass without a laborer.A laborer cannot cut grass without a lawn mower.Which graph in the above figure best represents the isoquants for Joey's Lawncutting Service when capital per day is on the vertical axis and labor per day is on the horizontal axis?

Albert's Pretzel Baking Company used to have four workers who were each in charge of making their own pretzels from start to finish.Now,one worker mixes the dough,another shapes it,the third puts the unbaked pretzels into the oven and the fourth removes the finished product.Output has doubled.This is an example of

An organization that converts inputs (like Labor,Capital etc.)into output is called a

The Marginal Product of Labor is

Which of the following statements best describes a production function?

For the following, please answer "True" or "False" and explain why. -A firm may express increasing,constant and decreasing returns to scale for various levels of output.

Joey cuts grass during the summer.He rents a lawn mower from his dad.Which of the following statements best illustrates the difference between the short run and the long run for Joey?

Which situation is most likely to exhibit diminishing marginal returns to labor?

One way to explain the convexity of isoquants is to say that

To say that isoquants are convex is to say that

Which of the following statements best summarizes the law of diminishing marginal returns?

Find the Marginal Rate of Technical Substitution for the following production functions: a.q = L⁰.⁵K⁰.⁵ b.q = L⁰.⁵ + K⁰.⁵ c.q = min{K,L} d.q = L + K

Returns to scale refers to the change in output when

Limited liability is a benefit to

Mr.Roche purchases a firm that produces widgets by employing machines and workers.Each machine requires exactly three workers to operate.Without three workers,the machine will not work,and any additional worker above three will just stand there doing nothing.When operated this way,the machine produces 30 widgets an hour.Draw some isoquants for this technology and determine the production function.

Automobile manufacturers view the assembly-line workers as