HW5-solution - Econ 501 Homework Assignment 5 Solution 1....

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Econ 501 Homework Assignment 5 Solution 1. BB 6.5 a) Incorrect. When M PA P > we know that AP is increasing. When M P < we know that AP is decreasing. b) Incorrect. If MP is negative, MP < 0. But AP = Q / L can never be negative since total product Q and the level of input L can never be negative. Thus, MP < 0 < AP , which only implies that AP is falling. c) Incorrect. Average product is always positive, so this tells us nothing about the change in total product. Whether or not total product is rising depends on whether or not marginal product is positive. d) Incorrect. If total product is increasing we know that 0 MP > . If diminishing marginal returns have set in, however, marginal product will be positive but decreasing, but that does not preclude MP > 0. 2. BB 6.10 a) 0.0 10.0 20.0 30.0 40.0 50.0 0 1 02 03 04 0 Labor Capital Q=50 Q=100 Q=150 b) Because each of these isoquants has an upward-sloping portion beyond some level of labor, each one does indeed have an uneconomic region.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 07/17/2008 for the course ECON 501.02 taught by Professor Yang during the Winter '08 term at Ohio State.

Page1 / 4

HW5-solution - Econ 501 Homework Assignment 5 Solution 1....

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online