Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Before explaining returns to scale it will be instructive to make clear the distinction between change in the scale and changes in factor proportions. The difference between the changes in scale and changes in factor proportions will become clear from the study of where the two factors labour and capital have been measured on the X axis and Y-axis respectively. We suppose that only labour and capital are required to produce a particular product. An Isoquants map has been drawn. A point S has been taken on the Y –axis ad the horizontal line ST parallel to X axis has been drawn. OS represents the amount of capital which remains fixed along the line ST. as we move towards right on the line ST the amount of labour varies while the amount of capital remains fixed at OS. In other words proportion between the two factors undergoes a change along the line ST the ratio of the variable factor labour to the fixed factor capital rises as we move towards right on the line St. thus the movement along the line ST represents variation in factor proportions. Likewise a vertical line GH parallel to the Y-axis has been drawn which also indicated changes in facto proportions. But in this case the quantity of labour remains fixed while the quantity of capital varies.Now, draw a straight line OP passing through the origin. It will be seen that along the line OP the inputs of both the factors labour and capital vary moreover because the lineup is a straight line through the origin the ratio between the two factors along OP remains the same throughout. Thus the upward movement along the line Op indicates the increase in the absolute amounts of two factors employed with the proportion between two factors remaining unchanged. Assuming that only labour and capital are needed produce a product then the increase the two factor along the line OP represents the increase into eh scale since along the line Op both the factors increase in the same proportion and therefore proportion between the two factor remains unaltered. If any other straight line through the original such as OQ or is drawn it will show like the line Op the changes in the scale but it will represent a different given proportion of factor which remains the same along the line. That is the various straight lines through the origin will indicate different proportions between the two factors but on each line the proportion between the two factors remains the same throughout.
(a) Suppose Scientists discover that eating soybeans prevents cancer and heart disease.
Market supply and Increase in supply: Market supply is the total quantity of a product that all firms in an industry are willing to offer for sale at a given market price an
Q. Define Credit? Credit:Ability to purchase something without immediately paying for it - through a credit card or bank loan, a mortgage or any other forms of credit. Creation
what are the benefits of natural resources and industryquestion..
What are the "three basic economic questions" that economists often address when examining how much economic output is formed? The three basic questions are: a) what is prod
Health and Life Expectancy: In addition to struggling on low income, many people in the developing nations fight a constant battle against malnutrition, disease and ill healt
Consider the model of corruption explored by Shleifer and Vishni’s where there is one government-produced good X. There is a demand for that good described by the inverse demand eq
Rationale of Group Project Group project allows you to pursue authentic learning with your peers, and to apply theories taught in class and textbooks to real world situations.
Implementation of economic policy: On the ability of civil servants and Government to learn, Government must possess the following qualities to ensure implementation of econom
How is the wrong conclusion result in necessary condition not in the sufficient condition? This is often heard that the market institution must not be used based onto the fact
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd