Table 12-5

-Refer to Table 12-5.Assume that fixed costs are $500,and variable costs are $100 per worker.For this firm,what are the shapes of the production function and the total-cost curve?
A) Both the production function and total-cost curve are increasing at an increasing rate.
B) Both the production function and total-cost curve are increasing at a decreasing rate.
C) The production function is increasing at a decreasing rate,whereas the total-cost function is increasing at an increasing rate.
D) The production function is increasing at an increasing rate,whereas the total-cost function is increasing at a decreasing rate.

Question

Table 12-5
 
-Refer to Table 12-5.Assume that fixed costs are $500,and variable costs are $100 per worker.For this firm,what are the shapes of the production function and the total-cost curve?
A) Both the production function and total-cost curve are increasing at an increasing rate. 
B) Both the production function and total-cost curve are increasing at a decreasing rate. 
C) The production function is increasing at a decreasing rate,whereas the total-cost function is increasing at an increasing rate. 
D) The production function is increasing at an increasing rate,whereas the total-cost function is increasing at a decreasing rate.

Quizplus · Accepted Answer

Based on the given information, the production function is increasing at a decreasing rate because as the number of workers increases, the marginal product of each additional worker decreases. The total-cost curve is increasing at an increasing rate because fixed costs are constant and variable costs increase with each additional worker. Therefore, the correct answer is C.

Table 12-5 -Refer to Table 12-5.Assume That Fixed Costs Are $500,and Variable