1) Suppose we have the following SR production function: Q=4Ls Calculate the marginal product of labor and comment on what will happen as L increases. Why?

Consider a short run production function   q=cL+k   where the value for c is 4, using L units of labour and K units of capital. Compute the marginal product of labour.   Does the production function exhibit decreasing, increasing or constant returns to scale? Explain your answer.

Q2. Define marginal physical product of labor (MPP) and marginal cost of product (MC). How are these two related? Why is MC called the mirror image of MPP? Explain.

Consider the production function Y AK°Lta, where A is a constant, L is labour, K is capital and a 0. Which of the following is true? O The marginal product of labour is constant O The marginal product of labour is diminishing There are increasing returns to scale O There are decreasing returns to scale

Why might marginal product be increasing at lower levels of output and decreasing at higher levels of output?

What is the difference between the short run and long run for a firm? How does this relate to fixed and variable inputs?

Discuss the main feature behind the long run average cost curve in terms of usage of input.

What is the law of diminishing marginal product, In which stages of production it manifest and What is the logical justification for the law of diminishing marginal

2

What is the distinction between the laws and of returns and the returns to scale?