Joey Cuts Lawns During the Summer

question 91

Multiple Choice

Joey cuts lawns during the summer. Let q equal the number of acres mowed per day, and let L equal the number of hours worked per day. Joey never works more than eight hours per day, and during that time his short-run production function is q = 0.2 ∗ L. Which of the following statements is FALSE?

• A)Joey's marginal product equals his average product.
• B)Joey's marginal product diminishes by 0.2 for each additional hour worked.
• C)Joey's average product is constant.
• D)Joey's marginal product is constant.

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Definitions:

Transfer Price

The price at which goods or services are sold between divisions within the same company.

Variable Cost

Expenses that vary directly with the level of production or sales volume, such as raw materials and labor.

Transfer Price

The price at which goods and services are traded between departments or subsidiaries within the same organization.

Variable Cost

Costs that vary directly with the level of production or sales volume, such as materials and labor, in contrast to fixed costs which remain constant regardless of production level.