The demand curve for capital Oa. is derived from households' decisions concerning saving and spending. Ob. is horizontal. Oc. is vertical. Od. reflects the marginal productivity of capital.

Output per worker ($ thousands) 0 Select one or more: 0 Capital equipment per worker ($ thousands) Which TWO of the following statements are correct? O a. The slope of the function is the marginal product of capital. b. The figure shows that each extra $ of capital per worker raises output per worker by an equal amount. ✔ C. The function is "convex" (L.e. it has a slope which increases as capital per worker rises). Od. The figure shows that higher capital per worker increases output per worker. Production function

Y=10.KO.5 L0.5 K starts at 500, L at 50, Investment 0.10Y, Depreciation 0.05K An alien invasion leads to a reduction in labour to 25 but no capital is damaged. What happens to the marginal product of labour? Increase O stays the same Decrease

Dead capital is Select one: O A. useful only if employed in a labor-intensive production process. O B. useful only if employed in a capital-intensive production process. O C. unlikely to have any productive use. O D. unlikely to be applied to its most efficient use.

Choose the correct statement. OA. The demand for capital is perfectly inelastic. OB. The supply of capital is perfectly inelastic. OC. The supply of capital is based on the value of marginal product of capital. OD. The demand for capital is based on the value of marginal product of capital. M

If more and more labor is employed while keeping all other inputs constant, the marginal physical productivity of labor a. will eventually increase. b. will eventually decrease. c. will eventually remain constant. d. cannot tell from the information provided.

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1 10. Consider a production function of the form y=AK 2L² where y is units of output, K is units of capital and L is the number of people employed. How much will output increase by if both capital and labour employed increase by 25%? a. 25% b. 6,250 c. 50% Od. 5,000

Draw an example production function in terms of output and capital.GIVE 2 specific properties which define its shape; explain these usingthe definition and properties of MPK.

2. Capital A F E G B D Labor If the firm wants to produce the output level represented by the isoquant Qo, would you recommend production at point E or F or G? Please explain.