Consider the following short-run production function: q = 5L2 - 1/3 L3. At what level of L do diminishing marginal returns begin? At what level of L do diminishing returns begin?
What will be an ideal response?
MP = 10L - L2. Marginal product peaks when L = 5 and equals zero when L = 10. Thus, diminishing marginal returns begin when L = 5, and diminishing returns begin when L = 10.
You might also like to view...
A perfectly elastic demand curve:
A) is parallel to the price axis. B) is parallel to the quantity axis. C) slopes upward. D) slopes downward.
Based on the Taylor Principle, a central bank's endogenous response of raising interest rates when inflation rises
A) causes an upward movement along the monetary policy curve. B) causes a downward movement along the monetary policy curve. C) shifts the monetary policy curve upward. D) shifts the monetary policy curve downward.
Refer to Figure 4-7. The movement from Db to Da in the market for potato chips could be caused by a(n)
a. Decrease in the price of potato chips.
b. Decrease in income, assuming that potato chips are a normal good.
c. Announcement by the FDA that potato chips lower cholesterol.
d. Increase in the price of a pretzel.
Define the components of the CAMELS criteria and explain how a CAMELS rating is calculated.
What will be an ideal response?