Econ302-hw3-spring09 - Econ302 Homework Assignment 3 Due...

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Econ302 Homework Assignment 3 Due Thursday March12 (Questions 1, 3, and 5 will be graded) Name: Section:  1. Diminishing returns to a single factor of production and constant returns to scale are  not inconsistent.  Discuss. 1
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2.  For each of the following examples, draw a representative isoquant.  What can you say  about the marginal rate of technical substitution in each case? a. A firm can hire only full-time employees to produce its output, or it can hire some  combination of full-time and part-time employees.  For each full-time worker let  go, the firm must hire an increasing number of temporary employees to maintain  the same level of output. b. A firm finds that it can always trade two units of labor for one unit of capital and  still keep output constant. 2
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c. A firm requires exactly two full-time workers to operate each piece of machinery  in the factory.  
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This note was uploaded on 03/24/2009 for the course ECON 302 taught by Professor Avrin-rad during the Spring '09 term at University of Illinois, Urbana Champaign.

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Econ302-hw3-spring09 - Econ302 Homework Assignment 3 Due...

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