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Question
Joe owns a coffee house and produces coffee drinks under the production function q = 5KL where q is the number of cups generated per hour, K is the number of coffee machines (capital), and L is the number of employees hired per hour (labor). The average product of labor and the marginal product of labor are both equal to AP = MP = 5K. Does labor exhibit diminishing marginal returns in this case?A) Yes, if capital also exhibits diminishing marginal returns.
B) Yes, this is true for all values of K.
C) No, the marginal product of labor is constant (for a given K).
D) No, the marginal product of labor is increasing (for a given K).
Answer
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Related questions
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If the inflation rate falls and nominal interest rates are unchanged,
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Q:
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Q:
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Q:
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Q:
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Q:
Scenario 14.4:
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L = PL -5 MEL = 2L + 5
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B) Marginal revenue product of labor
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Q:
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Q:
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Use the following statements to answer this question:
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Q:
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Q:
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Q:
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Q:
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B) an increase in labor employment and an increase in the wage rate.
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Q:
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Q:
If leisure is a normal good, then the income effect of a decrease in wage will
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Q:
The marginal revenue product can be expressed as the
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B) increment to revenue received from one additional unit of input hired.
C) marginal physical product of an input times the average revenue received from the sale of the product.
D) average physical product of the input times the marginal revenue received from the sale of the final product.