If decreasing returns to scale are present, then if all inputs are increased by 10%,

The correct answer: output will increase by less than 10%.

Decreasing returns to scale means that a proportionate increase in all inputs results in a less than proportionate increase in output.

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With input combinations (L = 25, K =6), Alma harvested 200 bushels of wheat. After one of the machines broke, she hired more labor. As a result, with input combinations (L = 30, K = 5), she still harvested 200 bushels. One can conclude from these results that

The correct answer: the marginal product of labor is less than the marginal product of capital.

Two points do not provide enough evidence to draw a conclusion about the convexity of the isoquant.

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The manager at Skip's Pottery knows the marginal product of labor equals 6 and the marginal product of capital equals 30. Skip will be purchasing one more unit of capital. If the firm wishes to keep the level of output unchanged, then the manager must

The correct answer: decrease labor hired by 5 units.

The increase in capital will raise output by 30 units. To reduce output by 30 units, thus leaving output unchanged, labor must decrease 5 units.

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A production function can be written as Q = F(L,K). After various combinations of inputs were used, the following results were obtained: 1000 = F(120,6) 2000 = F(200,10) 3000 = F(300,15) 4000 = F(400,20) 5000 = F(500, 25) 6000 = F(700,35). Over which range of output are there constant returns to scale?

The correct answer: 2000 to 5000 units of output only.

From 1000-2000 units of output, it takes a less than doubling of inputs to double output. From 2000-3000 units of output, a 50% increase in inputs yields a 50% increase in output. From 3000-4000, a 33% increase in inputs yields a 33% increase in output. From 4000-5000, a 25% increase in inputs yields a 25% increase in output. From 5000-6000, a 40% increase in inputs yields a 20% increase in output. Thus, constant returns to scale exist only in the range of 2000-5000 units.

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A production function can be written as Q = F(L,K). After various combinations of inputs were used, the following results were obtained: 1000 = F(120,6) 2000 = F(200,10) 3000 = F(300,15) 4000 = F(400,20) 5000 = F(500, 25) 6000 = F(700,35). Increasing returns to scale are present over which range of output?

The correct answer: Up to 2000 units of output only.

From 1000-2000 units of output, it takes a less than doubling of inputs to double output. From 2000-3000 units of output, a 50% increase in inputs yields a 50% increase in output. From 3000-4000, a 33% increase in inputs yields a 33% increase in output. From 4000-5000, a 25% increase in inputs yields a 25% increase in output. From 5000-6000, a 40% increase in inputs yields a 20% increase in output. Thus, increasing returns to scale exist only in the range of 1000-2000 units.

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The local factory noticed that each of the following combinations of capital and labor produced the same level of output: (L=1, K=20) (L=2, K=15) (L=3, K=11) (L=4, K=8) (L=5, K=6) (L =6, K=5). In going from 5 units of labor to 6 units of labor along the isoquant, this evidence suggests that

The correct answer: the marginal product of labor equals the marginal product of capital.

In this range, the slope of the isoquant equals –1. Thus, MPK = MPL.

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The local factory noticed that each of the following combinations of capital and labor produced the same level of output: (L=1, K=20) (L=2, K=15) (L=3, K=11) (L=4, K=8) (L=5, K=6) (L =6, K=5). This evidence suggests that

The correct answer: the isoquant is convex.

By mapping out the isoquant, we can see that the isoquant becomes flatter as L increases and K decreases. Thus, the isoquant is convex.