Comm220 Ch6 Quick Quiz correction

Comm220 Ch6 Quick Quiz correction - CHAPTER 6 ANSWERS TO...

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

View Full Document Right Arrow Icon
1 CHAPTER 6 – ANSWERS TO THE QUICK QUIZ QUESTIONS Q1 Marginal product of the last person hired. It depends on the revenue generated by hiring another worker. It may still be profitable to hire another worker. Marginal product of the last worker hired declines. Q2 No, more of both inputs would produce more output. Q3 a. b. c. Full-time worker Part-time worker Labor Capital Capital Labor
Background image of page 1

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

View Full DocumentRight Arrow Icon
2 Q4 a. Constant returns to scale. When the inputs are doubled, output will double. For example: L = 2 and K = 2, q = 10 L = 4 and K = 4, q = 20 L = 8 and K = 8, q = 40 MP L =3 and MP K = 2, marginal product of each factor is constant. When L increases by 1, q will increase by 3. When K increases by 1, q will increase by 2. b. Decreasing returns to scale. When the inputs are doubled, output will be less than double. For example: L = 2 and K = 2, q = 2.83 L = 4 and K = 4, q = 4 L = 8 and K = 8, q = 5.66 MP L = 1/(2L + 2K) 1/2 and MP K = 1/(2L + 2K) 1/2 , marginal product of each factor is decreasing. Since L (K) is in the denominator, as L (K) increases,
Background 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 01/22/2012 for the course COMM 220 taught by Professor J.garon during the Spring '08 term at Concordia Canada.

Page1 / 2

Comm220 Ch6 Quick Quiz correction - CHAPTER 6 ANSWERS TO...

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