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9-Discussion Questions

9-Discussion Questions - Lecture 9 Technology and...

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Lecture 9: Technology and Production (I) Suggested questions and exercises (Pindyck and Rubinfeld, Ch.6). Questions: 4, 11 Exercises: 5, 8 Additional Discussion Question QUESTIONS 4. You are an employer seeking to fill a vacant position on an assembly line. Are you more concerned with the average product of labor or the marginal product of labor for the last person hired? If you observe that your average product is just beginning to decline, should you hire any more workers? What does this situation imply about the marginal product of your last worker hired? 11. Diminishing returns to a single factor of production and constant returns to scale are not inconsistent. Discuss. EXERCISES 5. 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
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