Define the following terms as rigorously as you can. (a) Marginal Product (of a factor of...
Question:
Define the following terms as rigorously as you can.
(a) Marginal Product (of a factor of production)
(b) Opportunity Cost
(c) Technical Rate of Substitution
Marginal Product, Opportunity Cost and Technical Rate of Substitution
These terms are from the production theory. Marginal product refers to the additional unit of output generated by employing an additional unit of factor input. Opportunity cost refers to the value of commodity foregone to achieve another commodity. Technical Rate of substitution refers to the rate at which one factor must decrease when another factor is increased so as to achieve the same level of output.
Answer and Explanation: 1
Become a Study.com member to unlock this answer! Create your account
View this answer(a) Marginal Product of a factor refers to the additional Total Product or output generated by employing an additional unit of the input, keeping...
See full answer below.
Ask a question
Our experts can answer your tough homework and study questions.
Ask a question Ask a questionSearch Answers
Learn more about this topic:
Get access to this video and our entire Q&A library
Marginal Product of Labor: Definition, Formula & Example
from
Chapter 3 / Lesson 49
81K
Understand the meaning of marginal product of labor. Learn the marginal product of labor (MPL) formula, its significance, and how to calculate MPL with examples.
Related to this Question
- What is the relationship between the marginal products of the factors of production and the marginal rate of technical substitution?
- Write the equations for the marginal product of capital, marginal product of labor, and marginal rate of technical substitution for the long run production function q =12K^0.5 L^0.5.
- Consider the production function f(x1, x2) = 2x1 + \sqrt {x2}. What are the marginal products of factors 1 and 2, and the technical rate of substitution at the bundle of inputs (x1, x2)?
- Production function is Q=K^.6L^.4, what is the marginal rate of technical substitution? Show work.
- How do you calculate the marginal rate of technical substitution from the production function?
- Consider a firm that has a production function f(L, K) = 5L^{1/3}K^{2/3}. What is the expression for the marginal rate of technical substitution, MRTS_{LK} at (L, K)? A. K/L B.10K/L C. K/2L D. 2K/L E. K/10L
- The production function is Q = K^{.6}L^{.4}, what is the marginal rate of technical substitution?
- Consider a production function of the form with marginal products MP_K = 2KL^2 and MP_L = 2K^2L. What is the marginal rate of technical substitution of labor for capital at the point where K = 25 and L = 5? A. 5 B. 25 C. 15 D. 1
- Write the equations for the marginal product of capital, marginal product of labor, and marginal rate of technical substitution for the long-run production function q = K^2 L.
- Write the equations for the marginal product of capital, marginal product of labor, and marginal rate of technical substitution for the long-run production function q = 10L + K.
- At L= 62 ans K=101, the marginal product of labor is 10 and the marginal product of capital is 6. What is the marginal rate of technical substitution ?(labor measured on the horizontal axis) The marginal rate of technical substitution is [{Blank}] . (Ent
- At L = 51, K=78 the marginal product of labor is 4, and the marginal product of capital is 4. What is the marginal rate of technical substitution ?(labor measured on the horizontal axis) The marginal rate of technical substitution is [{Blank}] (Enter a nu
- Write the equations for the marginal product of capital, marginal product of labor, and marginal rate of technical substitution for the long-run production function q = 5L^0.5K.
- Consider the following production functions and corresponding isoquants. Which isoquant exhibits diminishing marginal rate of technical substitution? 1. Q=10K+5L 2. Q=Min(10K, 5L) 3. Q=K0.6 L0.6 4. Q=K0.5 L0.5
- The marginal rate of technical substitution measures: A. the rate at which one factor input can be substituted for another at a given level of output. B. the rate that output changes as a result of more factors being used. C. the rate at which costs cha
- At L = 4 and K = 4, the marginal product of labor is 2 and the marginal product of capital is 3. What is the marginal rate of technical substitution?
- Suppose that a firm's production function is q = 10 L^0.5 K^0.5. This means that the marginal rate of technical substitution is K/L.The cost of a unit of labor is $20 and the cost of a unit of capital is $80. The firm wants to produce 130 units of output.
- DESCRIBE THE FOLLOWING CONCEPTS RELATIVE TO PRODUCTION POSSIBILITIES: PRODUCTIVE EFFICIENCY ALLOCATIVE EFFICIENCY PRODUCTION POSSIBILITIES CURVE LAW OF INCREASING OPPORTUNITY COST LAW OF CONSTANT
- Determine the Marginal Rate of Technical Substitution for each production function (treat K as the y-input and L as the x-input) q(K, L) = 3KL^2 + 2L + 3K
- Determine the Marginal Rate of Technical Substitution for each production function (treat K as the y-input and L as the x-input) q(K, L) = 3L^2K^3
- "Answer the following questions using the production function q=AK^a L^b, where A,a,b0. 1. Does labor exhibit diminishing marginal product if b=0.2? 2. Find the rate of technical substitution (RTS)
- Suppose the production function for a firm is given by q = 4L + 2K. If the firm currently has 20 units of capital (K) and 10 units of labor (L), then calculate the marginal rate of technical substitution (MRTSLK).
- Suppose the production function for a firm is given by q = 8L + 2K. If the firm currently has 20 units of capital (K) and 10 units of labor (L), then calculate the Marginal Rate of Technical Substitution (MRTS_(LK)).
- consider a firm that operates with the following production function: q = 2K^2L a. calculate the marginal products of labor and capital (MP_L AND MP_k) b. calculate the marginal rate of technical substitution of labor for capital, MRTS_{LK} Firm faces m
- Determine the Marginal Rate of Technical Substitution for each production function (treat K as the y-input and L as the x-input) q(K, L) = 3K + 2L
- Consider the following production function: Q = F(L, K) = L^4 * K^7. A) Does this production function exhibit diminishing or increasing marginal rate of technical substitution of labor for capital? Show your work. B) Find the elasticity of substitution fo
- Suppose the production function for a firm is given by q = 4L0.75K0.25. If the firm currently has 10 units of capital (K) and 10 units of labor (L), then calculate the marginal rate of technical substitution (MRTSLK).
- The change in total output resulting from a 1-unit increase in the quantity of a factor of production used, holding the quantities of all other factors of production constant, is: a) average cost. b) average product. c) marginal cost. d) marginal product.
- Match the terms with their definitions. 1) additional cost of one more or one fewer factor inputs 2) additional amount of revenue added by use of an input factor 3) difference between the substitution and output effect 4) exchange of factors from househol
- 1. The change in total output resulting from a 1-unit increase in the quantity of a factor of production used, holding the quantities of all other factors of production constant, is? A) average cost. B) average product. C) marginal cost. D) marginal produ
- Find the Marginal rate of technical Substitution when capital is 10 and labor is 10 if the production function is: F ( L , K ) = 10 K + 2 L 2
- What are the production costs of an economics class? Identify the fixed costs and variable costs.
- a) What is meant by production technologies, and how does it relates to producing a particular amount of output in the long-run? How do firms decide which production technology to use in the long-run? (b) Characterize what will cause long-run costs to inc
- Suppose we know that output in the economy is given by the production function: Y_t = A_t K_t^(1/4) L_t^(3/4) a) Use partial derivative techniques to solve for the marginal product of capital (Remembe
- 1) What are the concepts of total production, average production, and marginal production? 2) How do these relate to the production of cost? 3) How do the ideas of total cost, average cost, and margi
- A farmer uses three inputs to produce vegetables: land, labor, and capital. The production function for the farm exhibits diminishing marginal rate of technical substitution. What happens to the cost-
- What is the term for the production of goods with the lowest opportunity cost?
- Refer to the following graph. The price of capital (r) is $20. At the optimal combination of inputs for producing 14,000 units of output, what is the marginal rate of technical substitution? a. 2.5 b. 0.67 c.1.5 d. 0.80 e. impossible to tell from the
- Marginal cost is the additional cost incurred while producing the additional unit of output. But in the real world experiences, the marginal cost cannot be easily calculated as the mechanized production units produces what?
- Identify what is being described. profits rational choice physical capital entrepreneurial skills forwarding-thinking decision maker law of diminishing marginal benefit 1. A factor of production tha
- At L=100, K=149, the marginal product of labor is 2, and the marginal product of capital is 2. What is the marginal rate of technical substitution (labor measured on the horizontal axis)? The marginal
- Suppose we are given a Firm's Marginal product of capital and the marginal product of labor at the combination of labor and capital that the firm currently uses. Can we determine the Firm's marginal rate of technical substitution of labor for capital at t
- What would happen to average and marginal cost, if a technology is introduced in the production process?
- Consider the following production function F(K, L) = { KL } / {K + L } (a) Does it satisfy the Constant Returns to Scale Assumption? Explain. (b) Are marginal products diminishing? Explain. (If you can't find marginal products mathematically, you can com
- For each of the following terms, define, give an example, and, for terms marked with an asterisk (*) draw the appropriate graph. a. Production Possibility Frontier* b. Tradeoff* and Opportunity Cost c
- Choose which interpretation of the marginal cost of production is correct if the marginal cost of production is $30. a. For every unit of production it will cost $30 to produce that unit. b. An additi
- Find the marginal rate of technical substitution for the following production functions. a. q = 10L1/3K2/3 b. q = 4L0.5 + 2K0.5 c. q = min{2K, 4L} d. q = 3L + 8K
- Assume the production technology changes for a good that is currently produced in a perfectly competitive market. In particular, the new technology is such that the marginal costs of production for a
- Determine the term being defined or described by the following statement: The situation in which the joint cost of producing two goods is less than the sum of the separate costs of producing the two goods. Choose from the following terms: | constant cos
- Which is the proper term to describe a decrease in output combined with an increase in labor? A. diminishing labor, B. diminishing output, C. diminishing marginal product, or D. negative marginal prod
- Consider the following production function: *Q=100K.4L.6 a) Derive expression for the marginal product of capital, and for the marginal product of capital. b) Compute the marginal products of capit
- Production possibilities curves reflect: A. Constant opportunity costs if technology is held constant, no matter what skills the factors of production have. B. Maximum efficiency in the production of all outputs, given that technology does not change. C.
- Determine the term being defined or described by the following statement: The change in long-run total cost per unit change in output. Choose from the following terms: | constant costs | increasing returns to scale | constant returns to scale | isocost
- Marginal cost can be defined as the change in: A. cost resulting from one more unit of production. B. cost resulting from one less unit of production. C. benefit resulting from one more unit of production. D. benefit resulting from one less unit of produc
- Recall that a Cobb-Douglas production function is expressed as a. What is the marginal product of labor? b. What is the marginal product of capital? c. What is the Technical Rate of Substitution (tre
- Define each of the following terms. a. Contraction b. Business cycle c. Trough d. Disposable income e. Net domestic product
- Using a production possibilities curve, explain the opportunity cost principle. Suppose an economy produces only food and housing. Draw and explain the characteristics of its production possibilities
- If the marginal product of labor is 25 and the marginal product of capital 10, what is the marginal rate of technical substitution of labor for capital? a. 0.6 b. 1 c. 1.5 d. 2.5 e. none of the above
- Find the Marginal Rate of Technical Substitution for the following production functions: a. q = L^0.5 K^0.5 b. q = L^0.5 + K^0.5 c. q = min{K, L} d. q = L + K
- An implicit cost is defined as: A) The amount by which the money spent on an input to production exceeds its opportunity cost. B) The difference between an input's explicit cost and its actual cost. C) The opportunity cost of using a resource that is n
- Which one of the following concepts is not illustrated by a production possibilities frontier? A) monetary exchange B) scarcity C) attainable and unattainable points D) opportunity cost E) the tradeoff between producing one good versus another
- Suppose that the marginal rate of technical substitution of L for K is constant and equal to x. Then A. If the firm substitutes one unit of labor with x units of capital, then production increases.
- Which of the following defines the opportunity cost of production? A. Using a resource in one capacity in production eliminates the ability to use it in another. B. Loss of potential profit in order to capture a larger market share. C. Streamlining produ
- Scarcity, choice, and opportunity cost can be illustrated with the aid of a production possibilities curve (PPC), also called a Production Possibilities Frontier (PPF). In terms of the above statement, discuss the importance of the production possibility
- Question 18 Consider a firm that has production function f(L,K)=4L2/3K1/3. What is the expression for this firm's Marginal Product of labor?
- Illustrate opportunity cost with a production possibilities curve (this would involve any two products and numbers). What would the production possibilities curve actually mean?
- Consider the cost function C(x)=7x^2+14x+22 (thousand dollars). Use the marginal cost at production level x = 3 to estimate the cost of producing 3.50 units.
- Scarcity, choice, and opportunity cost can be illustrated with the aid of a production possibilities curve (PPC), also called a Production Possibilities Frontier (PPF). In terms of this statement, discuss the importance of the production possibility front
- (a) Explain the difference between fixed-production technology and variable-production technology. (b) Should the government set a goal of reducing the marginal social cost of pollution to zero in industries with fixed-production technology? (c) Should th
- Explain the difference between fixed-production technology and variable-production technology. Should the government set a goal of reducing the marginal social cost of pollution to zero in industries with fixed-production technology? Should they do so in
- Derive the marginal rate of technical substitution for the Cobb-Douglass production function Q = cL^{alpha}K^{beta}.
- Which one of the following statements is not accurate? In general a production possibilities curve: A.reveals how much each additional unit of one product will cost in terms of the other product. B.
- What is the difference between total cost and variable cost in the long run? A. The total cost of production minus the variable cost of production is the fixed cost of production. B. The variable cost of production minus the total cost of production is th
- The economic concept of "opportunity cost" is most closely associated with which of the following management considerations? a. market structure b. resource scarcity c. product demand d. technology
- Suppose an economy has a production possibility frontier characterized by the following equation: Y = -X^2 + 625 a) Sketch the PPF b) Calculate 3 opportunity costs between 4 different points on the
- If the marginal rate of technical substitution of labor for capital (MRTSLK) exceeds the relative price of labor in terms of capital (PL/PK), then _____.
- Which of the following options is correct? The price elasticity of supply measures how: A. easily labor and capital can be substituted for one another in the production process. B. responsive the quan
- The rate of product transformation refers to: a. How a consumer can trade one good for another while still maximizing his or her utility, b. How a firm can substitute one input for another and still maintain the same production level, c. How production of
- Costs of production that change with the rate of output are: a. sunk costs. b. opportunity costs. c. fixed costs. d. variable costs.
- Costs of production that change with the rate of output are: A) sunk costs. B) opportunity costs. C) variable costs. D) fixed costs.
- When drawing a production possibilities frontier, which of the following is held constant? a. the available factors of production and the state of technology b. the amount of money in the economy c. the prices of goods and services d. the quantity of the
- The positively-sloped part of the long-run average total cost curve is due to which of the following? A) Diseconomies of scale. B) Diminishing returns. C) The firm being able to take advantage of large-scale production techniques as it expands its output.
- Which assumption about the firm's production technology implies that the revenue curve, when plotted as a function of labor, is upward-sloping? a. More inputs lead to more outputs. b. Marginal product of labor decreasing in labor. c. Marginal product of l
- Matching Definitions *average fixed cost *production function *average product of labor *quasi-fixed input *average total cost *short-run *average variable cost *short-run marginal cost *economic efficiency *technical efficiency *fixed input *to
- Marginal cost is A. all the costs of production of goods. B. all the costs of the fixed inputs. C. the change in the total cost resulting from a one-unit change in output. D. all the costs that vary with output.
- Which of the following conditions is true when a producer minimizes the cost of producing a given level of output? A. The MRTS is equal to the ratio of input prices. B. The marginal product per dollar spent on all inputs is equal. C. The marginal products
- What are some ways to minimize production costs? Note that the term "production" refers to the process of turning input into output and applies to the production of goods and services, not only factory production.
- Explain the term factors of production and the three most important factors of production.
- How does the change in the cost of production factors impact the firm's cost and revenue?
- Define unit cost of production. Use a maximum of two sentences for your answer.
- Assume there is an improvement in technology that increases the marginal product of each unit of labor. This would have the effect of: A) reducing the average total cost, average variable cost, and marginal cost of production. B) reducing the average tota
- "The optimal mix of labor and capital in producing output Q0 depends on the costs and marginal products of the inputs." What does this statement mean?
- Consider a typical aggregate demand and supply curve of an economy operating at its long-run equilibrium. What does this short-term output gap imply in terms of the rate of usage of factors of production compared to the normal rate indicated by potential
- The production function takes the following formY = F(K,N) = zK^0.3N^0.7 (a) Write the expressions for marginal product of labor and marginal product of capital.
- A firm has a production function of y = f(L, k) = ( sqrtL + sqrtk)^2 a) Find expressions for the marginal product of labor and capital (b) Find the cost function
Explore our homework questions and answers library
Browse
by subject