Determine whether returns to scale are decreasing

Assignment Help Macroeconomics
Reference no: EM13659420

For each of the following productions functions, determine whether returns to scale are decreasing , constant, or increasing (show your computations):

a. Q = 3K = 2L + KL
b. Q = 20K7L5

Exercise 3

HC Petersen & WC Lewis Business Consulting LLC are contracted by the Puerto Rican Treasury Department for an economic study with respect to the efficiency of accountants and bookkeepers in the audit process of corporate and individual tax collection. The study reveals that Certified Public Accountants (CPAs)who audit corporate tax returns are paid $31,200 per year, while the annual salary of a bookkeeper, who audit individual returns are paid $18,200. The study also reveals that adding one year of CPA time to audit corporate returns results in an additional tax collection of $52,000. On the contrary, an additional bookkeeper adds $41,600 per year in additional tax revenue.
a. Suppose that the Treasury wants to maximize tax revenue that is being collected, Do you consider the present combination of COAs and bookkeepers optimal? Justify your answer based on the concepts learned in this Module and chapter of production.

b. If the present mix of CIAs and bookkeepers is not optimal, should the Treasury Office hire more CPAs and less bookkeepers or vice versa? Explain why!

Reference no: EM13659420

Questions Cloud

Describe the phases of clinical studies : Describe the phases of clinical studies. For is a main goal achieved at the end and present the most important elements contained in prescription.
Statements relate to the ad-as model : Describe how the following statements relate to the AD-AS model
Write the electric field in terms of unit vectors : A light beam traveling in the negative z direction has a magnetic field B=(3.02x10-9T)x + (-5.28x10-9T)y at a given instant of time. The electric field in the beam has a magnitude of 1.82 N/C at the same time. Write the E (electric field) in terms of..
Trends in ratios and comment - compare to industry benchmark : Create a table that contains the ratios for the various years - Then analyze the information (explain) -  Look at the trends in the ratios and comment on how they compare to the industry benchmarks.
Determine whether returns to scale are decreasing : Determine whether returns to scale are decreasing
How much work was done by the ball : A 0.150 kilogram ball that is thrown at a velocity of 30.0 m\s hits a wall and bounces back in the opposite direction by a speed of25.0m\s. How much work was done by the ball?
Complete a swot analysis for the selected industry : Complete a SWOT analysis for the selected industry. The SWOT analysis allows a business to understand how a competitor is positioned in the environment by assessing its strengths, weaknesses, opportunities, and threats.
How much kinetic energy is lost in the system : A dartboard with a mass of 2.2kg is suspended from the ceiling such that it is originally at rest. A 0.030kg dart is thrown at the dartboard with a velocity of 1.2m\s. After the dart hits the dartboard, the dart and the board initially move by a velo..
Discover the energy delivered to the circuit : A 8.00 Ω resistor, 10.0 mH inductor, and a 130 µF capacitor are connected in series to a 40.0 V (rms) source having variable frequency. Discover the energy delivered to the circuit through one period if the operating frequency is double the resonance..

Reviews

Write a Review

Macroeconomics Questions & Answers

  Inflation targeting be a good policy

Why might it be difficult for the Fed to formally adopt inflation targeting?  Would inflation targeting be a good policy for the Fed in the present economic environment

  In using the taylor rule

In using the Taylor Rule as a guideline for monetary policy, what are the pros and cons of using forecasted values of inflation and output rather than observed values of these variables?

  Describe the present economic crisis situation in europe

Describe the present economic crisis situation in Europe.  Why has it been so difficult for the Europeans to find a solution to this problem?   Comment on what implications the crisis may have for the rest of the world if Europeans are not able to ag..

  Long-term federal government budget problems

Question:. Explain why there are long-term Federal government budget problems. Explain why the base-line forecast of the CBO is misleading.

  Derive and compare demand curve

Question based on Derive and compare demand curve,  Derive Ambrose's demand function for peanuts. How does it compare with Johnny's demand curve for peanuts?

  Problem based on utility function

Problem based on  Utility Function - Problem,  Answer and explain the following using a diagram which is completely labeled.

  Laffer curve : tax rate and tax revenue

Question based on Laffer Curve : Tax Rate and Tax Revenue,  Do raising tax rates necessarily raise tax revenue? What factors affect how tax revenue changes when tax rates change?

  Problem - income elasticity of demand

Problem - Income Elasticity of Demand,  Interpret the following Income Elasticities of Demand (YED) values for the following and state if the good is normal or inferior; YED= +0.5 and YED= -2.5

  Positive balance of payment

Question Positive Balance of Payment: "Things will look good for the US if we could just get to where we are consistently running a positive Balance of Payments."

  Effect of recession on the investment curve

Comment on the effect of a recession on the investment curve (only) and on the level of savings, investment, and the equilibrium real interest rate in the financial crisis that hits United States first starting in fall 2007.

  Affect of falling domestic investment on trade surplus and

How will a fall in domestic investment affect the trade surplus and net capital outflows in the domestic economy, the trade deficit and capital inflows in the rest of the world.

  Crises in the banking sector and bank run

Banking crises crisis decreases depositors' confidence in the banking system. What would be the effect of a rumor about a banking crisis on checkable deposits in such a country?

Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd