When total product is at its maximum: a. average product is maximized b. average
ID: 1226436 • Letter: W
Question
When total product is at its maximum: a. average product is maximized b. average product equals marginal product c. average product equals 1 d. marginal product equals 1 e. average product is greater than marginal product Suppose the w = $20 and r = $30. The isocost line for a firm in this industry is C = 20K + 30L. K = 0.033C - 0.66L. 1.5L + K = 0.5C. Depends entirely on the functional form of the production function. In order to minimize the cost of producing a given level of output, a firm manager should use more inputs when: Its price rises. Its price falls. Its price remains the same. The price of other inputs fall. Changes in the price of an input cause: Isoquants to become steeper. Slope changes in the isocost line. Parallel shifts of the isocost lines. Changes in both the isoquants and isocosts of equal magnitude. Suppose the product function is given by Q = 3K + 4L. What is the marginal product of capital when 5 units of capital and 10 units of labor are employed? 3. 4. 11. 45. Whenever marginal product is increasing with increasing use of an input: a. marginal product is less than average product b. total product is declining as input use increases c. total product is increasing at a decreasing rate d. total product is increasing at an increasing rate e. average product is decreasing The charge in total output attributable to the last unit of an input is the: Total product. Average product. Marginal product. Marginal return.Explanation / Answer
1 Average product is greater than the marginal product
As TP is maximized when MP is zero , which means MP is decreeasing and less than AP
2 C = 20L + 30K
Since equation of Isocost is C = wL + rK
3 Its' price rises
As Price increases Total Revenue increasses , so more of inputs should be purchased.
4 Slope changes in the isocost line.
As price of an input change, the slope of isocost change as slope of isocost = w/r and no change in isoquant.
5 3
AS MPK = dQ/dK = 3 , Constant , so rmain 3 for all values of K and L
6 Total product is increasing at an increasing rate
7 Marginal Product
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