The firm\'s marginal ?3) Suppose a finn\'s total cost curve is given by the equa

Question

The firm's marginal ?3) Suppose a finn's total cost curve is given by the equation TC-O, + 20 + 100 cost is MC-20+2. At what level of Q does the firm's average total cost curve reach a minimum A) 100 B) c) 10 D) 20 14) Joe owns a small coffee shop, and his per hour, K is the number (abor). If Joe's capital production function is Q-3KL where Q is total output in cups of coffee machines (capital), and L is the number of employees hired per hour is currently fixed at K-3 machines, what is his short-run production function? ??-3L 15) The slope of the total product curve is the A) average product. B) slope of a line from the origin to the point. C) marginal product D) marginal rate of technical substitution. 16) When labor usage is at 12 units, output is 36 units. From this we may infer that A) the marginal product of labor is 3. B) the total product of labor is 1/3. C) the average product of labor is 3. D) none of the above 17) When the average product is decreasing, marginal product A) equals average product B) is increasing. C) exceeds average product. D) is less than average product. 18) According to the law of diminishing returns A) the total product of an input will eventually be negative. B) the total product of an input will eventually decline. C) the marginal product of an input will eventually be negative D) the marginal product of an input will eventually decline. E) none of the above 19) As we move downward along a typical isoquant, the slope of the isoquant A) becomes smaller. C) remains constant. B) becomes bigger. D) becomes zero. 20) In a production process, all inputs are increased by 10%; but output increases less than 10%. Th means that the firm experiences A) decreasing returns to scale. B) constant returns to scale C) increasing returns to scale. D) negative returns to scale.

Explanation / Answer

16.

The formula for average product of labor (AP) is

AP = (Total output / Number of labor)

So, the average product is,

AP = (36 / 12) = 3.

So, the answer of this question is,

C) the average product of labor is 3.

17.

When the average product is decreasing, marginal product

D) is less than average product.

18.

According to the law of diminishing returns:

D) the marginal product of an input will eventually decline.

The reason behind this is, according to the law of diminishing returns, after a certain point marginal returns declines.

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