Emco Company has an assembly line of fixed size A.Total output is a function of the number of workers (crew size)as shown in the following schedule: $\begin{array}{cc} \begin{array}{c} \text { Crew Size } \\ \text { (No. of Workers) } \end{array} & \begin{array}{c} \text { Total Output } \\ \text { (No. of Units) } \end{array} \\ \hline 0 & 0 \\ 1 & 10 \\ 2 & 35 \\ 3 & 50 \\ 4 & 56 \\ 5 & 59 \\ 6 & 60 \\ 7 & 60 \\ 8 & 58 \end{array}$ Determine the following schedules: (a) marginal productivity of labor (b) average productivity of labor (c) elasticity of production with respect to labor

The answer of Emco Company has an assembly line of...

Exam 7: Production Economics

An industry can be characterized by the following production function: Q = 2.5L^.60 C^.40 (a) What is the algebraic expression for the marginal productivity oflabor? (b) What is the algebraic expression for the average productivity of labor? (c) How would you characterize the returns-to-scale in the industry?

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Question 1

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(a)
$\mathrm { MP } _ { \mathrm { L } } = \frac { \partial \mathrm { Q } } { \partial \mathrm { L } }$

$\begin{aligned}& = .60 \left( 2.5 \mathrm {~L} ^ { 60 - 1 } \mathrm { C } ^ { A 0 } \right) \\& = 1.50 \mathrm {~L} ^ { - .40 } \mathrm { C } ^ { .40 } \\\mathrm { AP } _ { \mathrm { L } } & = \frac { \mathrm { Q } } { \mathrm { L } }\end{aligned}$

(b)
$\begin{array} { l } = \left( 2.5 \mathrm {~L} ^ { 6 } \mathrm { C } ^ { 4 } \right) / \mathrm { L } \\= 2.5 \mathrm {~L} ^ { - 40 } \mathrm { C } ^ { 40 }\end{array}$

(c) This production function is of the Cobb-Douglas form and the sum of the exponents of the labor and capital variables indicate the returns to scale. Since the sum of the exponents is $1.0 ( .60 + .40 )$ , this production function exhibits constant returns to scale, i.e., a $\lambda$ -factor increase in each of the inputs will yield exactly a $\lambda$ -factor increase in output.

The marginal product is the incremental change in total output that can be obtained from the use of one more unit of an input in the production process,while holding constant all other inputs.

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Question 2

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True

The law of diminishing marginal returns:

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Question 3

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D

Marginal factor cost is defined as the amount that an additional unit of the variable input adds to ____.

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Question 4

Given a Cobb-Douglas production function estimate of Q = 1.19L^.72K^.18 for a given industry,this industry would have:

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Question 5

Suppose you have a Cobb-Douglas function with a capital elasticity of output (á)of 0.28 and a labor elasticity of output (â)of 0.84.What statement is correct?

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Question 6

Emco Company has an assembly line of fixed size A.Total output is a function of the number of workers (crew size)as shown in the following schedule: Crew Size (No. of Workers) Total Output (No. of Units) 0 0 1 10 2 35 3 50 4 56 5 59 6 60 7 60 8 58 Determine the following schedules: (a) marginal productivity of labor (b) average productivity of labor (c) elasticity of production with respect to labor

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Question 7

Marginal revenue product is defined as the amount that an additional unit of the variable input adds to ____.

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Question 8

The marginal product is the incremental change in total output that can be obtained from the use of one more unit of an input in the production process,while varying all other inputs.

(True/False)

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Question 9

Concerning the maximization of output subject to a cost constraint,which of the following statements (if any)are true?

(Multiple Choice)

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Question 10

The original Cobb-Douglas function was given as $\mathrm { Q } = \alpha \mathrm { L } ^ { \rho } \mathrm { L } ^ { 1 - \rho }$ .It was subsequently rewritten as $\mathrm { Q } = \alpha \mathrm { L } ^ { \rho 1 } \mathrm {~K} ^ { \rho2}$ .What benefit was derived in the revision?

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Question 11

The marginal product is defined as:

(Multiple Choice)

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Question 12

In the Cobb-Douglas production function ( $\mathrm { Q } = \alpha \mathrm { L } ^ { \rho 1 } \mathrm {~K} ^ { \rho 2 }$ ):

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Question 13

The Cobb-Douglas production function is: Q = 1.4L^0.6K^0.5.What would be the percentage change in output (%?Q)if labor grows by 3.0% and capital is cut by 5.0%?

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Question 14

What's true about both the short-run and long-run in terms of production and cost analysis?

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Question 15

In production and cost analysis,the short run is the period of time in which one (or more)of the resources employed in the production process is fixed or incapable of being varied.

(True/False)

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Question 16

The marginal rate of technical substitution may be defined as all of the following except:

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Question 17

The isoquants for inputs that are perfect complements for one another consist of a series of:

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Question 18

The isoquants for inputs that are perfect substitutes for one another consist of a series of:

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Question 19

Holding the total output constant,the rate at which one input X may be substituted for another input Y in a production process is:

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Question 20

The marginal product is the incremental change in total output that can be obtained from the use of one more unit of an input in the production process,while holding constant all other inputs.

The law of diminishing marginal returns:

Marginal factor cost is defined as the amount that an additional unit of the variable input adds to ____.

Given a Cobb-Douglas production function estimate of Q = 1.19L^.72K^.18 for a given industry,this industry would have:

Suppose you have a Cobb-Douglas function with a capital elasticity of output (á)of 0.28 and a labor elasticity of output (â)of 0.84.What statement is correct?

Marginal revenue product is defined as the amount that an additional unit of the variable input adds to ____.

The marginal product is the incremental change in total output that can be obtained from the use of one more unit of an input in the production process,while varying all other inputs.

Concerning the maximization of output subject to a cost constraint,which of the following statements (if any)are true?

The original Cobb-Douglas function was given as $\mathrm { Q } = \alpha \mathrm { L } ^ { \rho } \mathrm { L } ^ { 1 - \rho }$ .It was subsequently rewritten as $\mathrm { Q } = \alpha \mathrm { L } ^ { \rho 1 } \mathrm {~K} ^ { \rho2}$ .What benefit was derived in the revision?

The marginal product is defined as:

In the Cobb-Douglas production function ( $\mathrm { Q } = \alpha \mathrm { L } ^ { \rho 1 } \mathrm {~K} ^ { \rho 2 }$ ):

The Cobb-Douglas production function is: Q = 1.4L^0.6K^0.5.What would be the percentage change in output (%?Q)if labor grows by 3.0% and capital is cut by 5.0%?

What's true about both the short-run and long-run in terms of production and cost analysis?

In production and cost analysis,the short run is the period of time in which one (or more)of the resources employed in the production process is fixed or incapable of being varied.

The marginal rate of technical substitution may be defined as all of the following except:

The isoquants for inputs that are perfect complements for one another consist of a series of:

The isoquants for inputs that are perfect substitutes for one another consist of a series of:

Holding the total output constant,the rate at which one input X may be substituted for another input Y in a production process is:

Introduction and Goals of the Firm

Fundamental Economic Concepts

Demand Analysis

Estimating Demand

Business and Economic Forecasting

Managing in the Global Economy

Cost Analysis

Applications of Cost Theory

Prices,output,and Strategy: Pure and Monopolistic Competition

Price and Output Determination: Monopoly and Dominant Firms

Price and Output Determination: Oligopoly

Best-Practice Tactics: Game Theory

Pricing Techniques and Analysis

Contracting,governance,and Organizational Form

Government Regulation

Long-Term Investment Analysis

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Exam 7: Production Economics

The marginal product is the incremental change in total output that can be obtained from the use of one more unit of an input in the production process,while holding constant all other inputs. ​

The law of diminishing marginal returns:

Marginal factor cost is defined as the amount that an additional unit of the variable input adds to ____.

Given a Cobb-Douglas production function estimate of Q = 1.19L.72K.18 for a given industry,this industry would have:

Suppose you have a Cobb-Douglas function with a capital elasticity of output (á)of 0.28 and a labor elasticity of output (â)of 0.84.What statement is correct?

Marginal revenue product is defined as the amount that an additional unit of the variable input adds to ____.

The marginal product is the incremental change in total output that can be obtained from the use of one more unit of an input in the production process,while varying all other inputs.

Concerning the maximization of output subject to a cost constraint,which of the following statements (if any)are true?

The marginal product is defined as:

In the Cobb-Douglas production function ( Q=αLρ1 Kρ2\mathrm { Q } = \alpha \mathrm { L } ^ { \rho 1 } \mathrm {~K} ^ { \rho 2 }Q=αLρ1 Kρ2 ):

The Cobb-Douglas production function is: Q = 1.4*L0.6*K0.5.What would be the percentage change in output (%?Q)if labor grows by 3.0% and capital is cut by 5.0%?

What's true about both the short-run and long-run in terms of production and cost analysis?

In production and cost analysis,the short run is the period of time in which one (or more)of the resources employed in the production process is fixed or incapable of being varied.

The marginal rate of technical substitution may be defined as all of the following except:

The isoquants for inputs that are perfect complements for one another consist of a series of:

The isoquants for inputs that are perfect substitutes for one another consist of a series of:

Holding the total output constant,the rate at which one input X may be substituted for another input Y in a production process is:

Introduction and Goals of the Firm

Fundamental Economic Concepts

Demand Analysis

Estimating Demand

Business and Economic Forecasting

Managing in the Global Economy

Cost Analysis

Applications of Cost Theory

Prices,output,and Strategy: Pure and Monopolistic Competition

Price and Output Determination: Monopoly and Dominant Firms

Price and Output Determination: Oligopoly

Best-Practice Tactics: Game Theory

Pricing Techniques and Analysis

Contracting,governance,and Organizational Form

Government Regulation

Long-Term Investment Analysis

Filters

The marginal product is the incremental change in total output that can be obtained from the use of one more unit of an input in the production process,while holding constant all other inputs.

Given a Cobb-Douglas production function estimate of Q = 1.19L^.72K^.18 for a given industry,this industry would have:

In the Cobb-Douglas production function ( $\mathrm { Q } = \alpha \mathrm { L } ^ { \rho 1 } \mathrm {~K} ^ { \rho 2 }$ ):

The Cobb-Douglas production function is: Q = 1.4L^0.6K^0.5.What would be the percentage change in output (%?Q)if labor grows by 3.0% and capital is cut by 5.0%?