A) When the Marginal Product (MP) is rising, Marginal cost (MC) is rising; and when MP is falling, MC is falling.
B) When MP is rising, MC is falling, and when MP is falling, MC is rising.
C) When MP is rising, MC is constant, and when MP is falling, MC is negative
D) There is no relationship between MP and MC.

Given the Production Function: Q = 72X + 15X2 - X3, where Q = Output and X = Input The Marginal Product (MP) and Average Product (AP) when X = 6 are:

A) MP = 120; AP = 126
B) MP = 120; AP = 126
C) MP = 144; AP = 126
D) MP = 126; AP = 120
E) None of the above

If the price of capital is $10, the price of labor is $15, and the marginal product of capital is 8, then the least costly combination of capital and labor requires that the marginal product of labor be:

A) 20
B) 12
C) 16
D) 10
E) None of the Above

Solution Preview

Which of the following holds true?

A) When the Marginal Product (MP) is rising, Marginal cost (MC) is rising; and when MP is falling, MC is falling.
B) When MP is rising, MC is falling, and when MP is falling, MC is rising.
C) When MP is rising, MC is constant, and when MP is falling, MC is negative
D) There is no relationship between MP and MC.

Answer:
Answer B. When MP is ...

Solution Summary

This post answers three multiple choice questions on marginal product and cost.

Please help with the following problem.
The cost of pollution (in billions of dollars) originating in the paper industry is
C_P = 2P + P^2
where P is the quantity of pollutants emitted (in thousands of tons). The cost of pollution control (in billions of dollars) for this industry is
C_C = 5 - 3P
a. What is th

Which of the following relationships is correct?
a. When marginalproduct starts to decrease, marginalcost starts to decrease.
b. When marginalcost starts to increase, average cost starts to increase.
c. When marginalcost starts to increase, average variable cost starts to increase.
d. When margina

1. An economist estimated that the cost function of a single product is
C(Q)= 50 +25Q+30Q SQUARED+5Q CUBED
Based on this information determine:
a. The fixed cost of producing 10 units of output.
b. The variable cost of producing 10 units of output.
c. The total cost of producing 10 units of output.
d. The average fixed cos

Why marginal analysis is so important in managerialeconomics? Give examples of how this type of analysis can help a managerial decision maker. What are some limitations to using marginal analysis?

The cost function for a business is shown in the table below (where Q is the level of output):
Q (units) Cost
0 8
1 24
2 38
3 44
4 51
5 52
6 59
7 65
8 79
9 95
10 125
Calculate the (a) marginalcostand (b) the average total cost schedules.

Please help with the following problems.
Suppose that the economist of Corporation XYZ estimates the following long run cost function for a product M that the company produces and sells.
TC = 5Q2 + 10Q +180
The market price for product M is fixed at P = $70
a. What is the total fixed cost?
b. What is the total vari

17. Using the following table, consider the following: This firm rents its capital for $75 per hour. Its output (Q) is in terms of output per hour. The firm pays its employees $15 per hour.
Capital Labor Output Marginal Value of the
Product of MarginalProduct
Capital of Capital
K L Q MP of K VMP of K
0 20 0
1

Let a firm's demand be given by: Q=100-P. Let the firm's marginalcost be $2 per unit of production. Solve for the firm's marginal revenue equation and optimal output/price combination. If the firm sets prices using Cost-Plus pricing what is the % markup over cost at the optimal price you found above?

The level of an economic activity should be increased to the point where the __________ is zero.
a marginalcost
b average cost
c net marginalcost
d net marginal benefit
e none of the above