Suppose the Slope of a Short-Run Production Function Is Given

question 75

Multiple Choice

Suppose the slope of a short-run production function is given by 2/L^0.5. Which of the following statements is (are) TRUE?
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I. The marginal product of the fifth worker is 0.20.
II. The production function exhibits increasing marginal returns.
III. The marginal product of the sixteenth worker is 0.50.
IV. The production function's slope eventually changes from positive to negative as the firm produces more and more.

• A) II and III
• B) I and IV
• C) III
• D) I, II, and IV

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Definitions:

Direct Labor

The compensation provided to workers who are directly engaged in manufacturing goods or delivering services.

Cash Collections

The process of gathering all cash received from sales, services, or other sources.

Cash Budget

A forecast of cash inflows and outflows over a specific period, used for cash management.

Cash Receipts

The collection of money, typically in the form of cash or checks, by a business from its customers for goods or services provided.