The law of decreasing returns states that as a firm uses more of a A) variable input, total output will increase indefinitely. B) variable input, with a given quantity of fixed inputs, the marginal product of the variable input eventually decreases. C) fixed input, with a given quantity of variable inputs, the marginal product of the fixed input eventually decreases. D) variable input, output will begin to fall immediately.

Consider the production function of the firm below. Which of the following is NOT true? The marginal product of labor at B is 70 units. The total product is increasing as inputs to production increase. The marginal product of capital at point D is 50. The marginal products of both labor and capital are always increasing.

am. 106.

Exercise 11 Question Help Suppose that a firm's production function is: 112- q = 10L0.5K0.5 98- Its marginal product functions are: 84- MP, = 5KO.5/L0.5 - 0.5g/L 70- and MPK = 5L0.5/K.5 - 0.5g/K. 56- The cost of a unit of labor, w, is $50 and the cost of a unit of capital, r, is $50. Isoquants for output of 140 and 280 are illustrated in the figure to the right. 42- 28- Initially, the firm is producing 140 units of output and has determined that the cost-minimizing quantities of labor and capital are 14 and 14, respectively. 14- -q= 280 q= 140 98 Suppose now that the firm wants to increase output to 280 units. If capital is fixed 0- in the short run, how much labor will the firm require? 70 84 L, Units of labor 14 28 42 56 112 The firm will now require units of labor. (Enter your response rounded to two decimal places.) K, Units of capital