The following is a production function. Total output (Q) 50,000 45,000- 40,000- 35,000- 30,000- ง 25,000- 20,000- 15,000- 10,000- 5,000- 100 200 300 Units of labor (L) 400 Draw a graph of marginal product as a function of labor. 1.) Using the line drawing tool, graph the marginal product curve from 0 to 100 units of labor. Label this line 'MP Segment 1" 2.) Using the line drawing tool, graph the marginal product curve from 100 to 300 units of labor. Label this line 'MP Segment 2 Note: Carefully follow the instructions above and only draw the required objects. Does this graph exhibit diminishing returns? Explain your answer. A. Yes, it does exhibit diminishing returns, because the marginal product of labor decreases. OB. No, it does not exhibit diminishing returns, because the marginal product of labor is zero. OC. No, it does not exhibit diminishing returns, because the marginal product of labor is increasing. OD. Yes, it does exhibit diminishing returns, because the marginal product of labor is increasing. OE. Yes, it does exhibit diminishing returns, because the marginal product of labor is negative.
The following is a production function. Total output (Q) 50,000 45,000- 40,000- 35,000- 30,000- ง 25,000- 20,000- 15,000- 10,000- 5,000- 100 200 300 Units of labor (L) 400 Draw a graph of marginal product as a function of labor. 1.) Using the line drawing tool, graph the marginal product curve from 0 to 100 units of labor. Label this line 'MP Segment 1" 2.) Using the line drawing tool, graph the marginal product curve from 100 to 300 units of labor. Label this line 'MP Segment 2 Note: Carefully follow the instructions above and only draw the required objects. Does this graph exhibit diminishing returns? Explain your answer. A. Yes, it does exhibit diminishing returns, because the marginal product of labor decreases. OB. No, it does not exhibit diminishing returns, because the marginal product of labor is zero. OC. No, it does not exhibit diminishing returns, because the marginal product of labor is increasing. OD. Yes, it does exhibit diminishing returns, because the marginal product of labor is increasing. OE. Yes, it does exhibit diminishing returns, because the marginal product of labor is negative.
Chapter7: Production And Cost In The Firm
Section: Chapter Questions
Problem 3.7P
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