BUSI 620 help Making Decisions/uophelp.com BUSI 620 help Making Decisions/uophelp.com | Seite 14

Discussion Question 12: It is always better to hire a more qualified and
productive worker than a less qualified and productive one regardless of
cost. True or false? Explain
Problem 4: Ms. Smith, the owner and manager of the Clear Duplicating
Service located near a university, is contemplating keeping her shop
open after 4pm and until midnight. In order to do so, she would have to
hire additional workers. She estimated that the additional workers would
generate the following total output (where each unit of output refers to
100 pages duplicated). If the price of each unit of output is $10 and each
worker hired must be paid $40 per day, how many workers should Ms.
Smith hire?
Problem 12: Suppose that the production function for a commodity is
given by Q=10 √LK where Q is the quality of output, L is the quantity of
labor, and K is the quantity of capital.
a) Indicate whether this production function exhibits constant, increasing,
or decreasing returns to scale.
b) Does this production function exhibit diminishing returns? If so, when
does the law of diminishing returns begin to operate? Could we ever get
negative returns?
Problem 13: Indicate whether each of the following statements is true of
false and give the reason.
a) A firm should stop expanding output after reaching diminishing
returns
b) If large and small firms operate in the same industry, we must have
constant returns to scale.
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BUSI 620 Week 4 Discussion Board 4
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