Suppose the Production of DVD Players Can Be Represented by the Following

question 16

Multiple Choice

Suppose the production of DVD players can be represented by the following production function: q = .Which of the following statements is (are) TRUE?

• A) The production function has decreasing returns to scale.
• B) The marginal productivity of labor falls as labor increases in the short run.
• C) Capital and labor can be substituted for one another.
• D) All of the above.

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Definitions:

Inventory Investment

The purchase of goods and materials for the purpose of storing them for future sale or use in production.

Level of Inventory

Indicates the quantity of goods or materials a company has in stock at a given time, a critical factor in supply chain and operations management.

Disposable Income

The amount of income left to an individual after taxes have been paid, available for spending and saving.

Control

In an experiment or study, the standard to which comparisons are made; in management, the process of directing and regulating processes, systems, or organizations.