Microeconomics (13th Edition)
13th Edition
ISBN: 9780134744476
Author: Michael Parkin
Publisher: PEARSON
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Chapter 11.4, Problem 2RQ
To determine
Application of law of diminishing returns to capital.
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Chapter 11 Solutions
Microeconomics (13th Edition)
Ch. 11.1 - Prob. 1RQCh. 11.1 - Prob. 2RQCh. 11.2 - Prob. 1RQCh. 11.2 - Prob. 2RQCh. 11.2 - Prob. 3RQCh. 11.3 - Prob. 1RQCh. 11.3 - Prob. 2RQCh. 11.3 - Prob. 3RQCh. 11.3 - What is the shape of the AFC curve and why does it...Ch. 11.3 - Prob. 5RQ
Ch. 11.4 - Prob. 1RQCh. 11.4 - Prob. 2RQCh. 11.4 - Prob. 3RQCh. 11.4 - Prob. 4RQCh. 11.4 - Prob. 5RQCh. 11 - Prob. 1SPACh. 11 - Prob. 2SPACh. 11 - Prob. 3SPACh. 11 - Prob. 4SPACh. 11 - Prob. 5SPACh. 11 - Prob. 6SPACh. 11 - Prob. 7SPACh. 11 - Prob. 8SPACh. 11 - Prob. 9SPACh. 11 - Prob. 10SPACh. 11 - Prob. 11SPACh. 11 - Prob. 12SPACh. 11 - Prob. 13SPACh. 11 - Prob. 14SPACh. 11 - Prob. 15APACh. 11 - Prob. 16APACh. 11 - Prob. 17APACh. 11 - Prob. 18APACh. 11 - Prob. 19APACh. 11 - Prob. 20APACh. 11 - Prob. 21APACh. 11 - Prob. 22APACh. 11 - Prob. 23APACh. 11 - Prob. 24APACh. 11 - Prob. 25APACh. 11 - Prob. 26APACh. 11 - Prob. 27APACh. 11 - Prob. 28APACh. 11 - Prob. 29APACh. 11 - Prob. 30APACh. 11 - Prob. 31APACh. 11 - Prob. 32APA
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- Explain the difference between diminishing total returns and diminishing marginal returns to labor.arrow_forwardIn the plot below, are capital and labor substitutes or complements. Why?arrow_forwardAn increase in the price of capital will demand for labor if capital and labor are substitutes, and it will the demand for labor if the scale effect dominates. increase; decrease decrease; increase increase; increase decrease; decreasearrow_forward
- True or false The law of diminishing returns implies that the marginal product of labor (MPL) is increasing as labor input increases.arrow_forwardWhat is meant by an inferior factor of production? How would the firm’s demand for labour be altered if labour were an inferior factor of production?arrow_forwardA production function is given by q = 500L + 320K. The price of capital is $120 and the price of labor is $100. What is the marginal product of capital divided by the price of capital? Answer to two decimal places.arrow_forward
- A firm's production function is: q = 20L1/2K1/2 where q is the firm's total product, L is the quantity of labor employed, and K is the quantity of capital employed. The price of labor is $25 per unit and the price of capital is $100 per unit. a. What is the equation for the marginal product of labor? b. What is the equation for the marginal product of capital? c. Given the price of labor is $25 per unit and the price of capital is $100 per unit, what is the cost-minimizing combination of capital and labor that can produce 800 units of output?arrow_forwardAssuming labor is the only variable factor and paid at a constant wage rate ? show that the average variable cost (AVC) is inversely related to productivity?arrow_forwardSuppose that the marginal product of labor for a local bakery is 120 units per day and the price of labor is $10 per day. Instructions: Enter your answers as a whole number. a. What does the least-cost rule say that the ratio of the marginal product of capital to the price of capital should be? Book b. Now suppose that the marginal product of labor is 120 units per day, the price of labor is $10 per day, and the price of capital is $3 per day. What does the least-cost rule say that the marginal product of capital should be? Print Referencesarrow_forward
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