If a profit-maximizing firm's marginal product of labor equals 1 ton of output, while the marginal product of capital equals 7 tons of output and the use of capital is priced at Rs.14 per unit, then
Tap an option to check your answer.
1 mark, −0.33MicroeconomicsProduction and returns to scaleProducer equilibrium and the expansion pathModerateabout 1 min
UoH 2010 Question 78: Production and returns to scale
Answer and worked solution
Checking your account…
Production and returns to scale has come up 92 times in 6 exams since 2007.
What this question tests
This question is on Producer equilibrium and the expansion path, part of Production and returns to scale in Microeconomics.
The least-cost mix of inputs at given prices and how it moves as output grows.
TestStop has 13 past-paper questions on this subtopic; the nearest in year are below.
Similar questions from other papers
- Given below are two statements: Assertion A: There are increasing return to scale, if output become more than doubles when inputs are doubled. Reason R: Large scale of…
- Identify the CORRECT relationship(s) between the average product of labour (AP_L) and marginal product of labour (MP_L) in the short-run.
- In Cobb-Douglas production function Q = A x₁^α · x₂^β · u; A denotes here:
- Assuming that the production function is homogeneous of degree one and Euler's equation holds, if MP_L (marginal product of labour) is greater than AP_L (average…
- For a Cobb-Douglas production function with two inputs, Q = AK^αL^β where A > 0 and α, β > 0, the marginal products are: A. MP_K = α/KQ B. MP_K = β/KQ C. MP_L = α/LQ D
Question from the UoH 2010 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.