ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Question
How does the marginal product curve behave when there are diminishing returns to a factor. Give reason also.
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Conceptual knowledge
# Marginal product is the additional value added to total product with one more unit of labor taken into use.
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- Which of the following describes the law of diminishing returns to labor? A. When one more worker got hired their marginal product was negative B. When one more worker got hired total product of the firm went down C. When one more worker got hired their marginal product was lower than the marginal product of the previous workerarrow_forwardGrease Tech produces oil changes. The production of oil changes reles on both capital (K) and labor (L) and is combined in the following production function F (K, L) = KILL Take the derivative of this production function with respect to capital. What is the marginal product of capital evaluated at (le. just plug in the numbers) 64 units of capital used and 16 units of labor?arrow_forwardBarb's Bakery employs three workers who produce 6 cakes per hour. After Barb hires a fourth worker, production increases to 12 cake per hour. Which of the following statements is TRUE? a. b. C. d. Because the marginal product of the fourth worker is greater than the average product of three workers, the average product must rise. Because the marginal product of the fourth worker is less than the average product of three workers, the average product must fall Because the marginal product of the fourth worker is less than the average product of three workers, the average product must rise. Because the marginal product of the fourth worker is greater than the average product of three workers, the average product must fall.arrow_forward
- When Marginal Product of Labor intersects the Average product of labor, minimum average product of labor obtains at the intersection. True Falsearrow_forwardWhat is the law of diminishing returns? Explain why it applies only in the short run.arrow_forwardPlease answer asap. I really need help.arrow_forward
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