Refer to F a the MRTS is higher on Graph Z than on Graph M Oc the MRTS is lower
ID: 1173644 • Letter: R
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Refer to F a the MRTS is higher on Graph Z than on Graph M Oc the MRTS is lower on Graph Z than on Graph M d.the MRTS is constant on Graph Z QUESTION 5 A point on the supply curve a. is a profit and cost choice for the firm b. may or may not be optimal to the firm, depending if it's sold or not c. is a profit maximizing for the firm and the consumer at a given price d is a profit maximizing choice for the firm at a given output price QUESTION 6 A construction company builds roads with on the lsoquant with a small MRTS(in absolute value, that is without the negative sign) is associated with high use and a capital, output b. output, labor @ c. Capital, labor d. labor, capital QUESTION 7 Figure 2 Capital Capital Graph Z Click Save and Submit to save and submit. Click Save All Answers to save all answersExplanation / Answer
5) A supply curve denotes different prices at which each supplier is willing to sell different quantities of output. A profit maximizing point of output is where specifically the marginal revenue (or price in case of perfect competition) is equal to the marginal cost. Therefore, it is not true that any random point on the supply curve represents a profit maximizing point. The optimal point is known as the profit maximization or cost minimization point. The optimal point of equilibrium depends also on the willingness to buy of the consumer. Therefore at the optimal point, profit will be maximized only when there is exchange. The correct option is:
b) May or may not be optimal, depending on if it’s sold or not.
6) MRTS = Marginal Product of Labour (MPL) / Marginal Product of Capital (MPK)
When MRTS is small, it means that either the numerator is small or the denominator is large or both. We know that there is diminishing marginal returns to every factor. Thus, when either MPL or MPK is large, it means that more labour is being used and less capital is being used. Because of a greater labour usage, MPL is small. Likewise, since Capital is used less, MPK is large. Therefore the correct option is:
d) High Labour use and Low Capital use.
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