Hang,
You ask quite a specific question for an economics course. I'm torn on
whether to just walk you through the answer to the question given or
whether to give you guidance in the more general area of supply side
economics / theory of the firm. What I will do is give you an answer
to the question as well as point you in the direction of some useful
resources if you need additional help. Ideally with a question like
this you should feel confident in answering the question yourself as
the course progresses - truly getting a grasp of economics is more
about being able to think the right thoughts rather than write the
right answer!
The statement is true - on both counts.
Typically as output increases, the cost of getting extra units out of
equipment and workers increases - hence the increased wages are
reflected in the marginal cost curve.
There is also an issue of diseconomies of scale. Economies of scale
are easy to think about - if I have to bake 10 apple pies, I can do it
a lot more efficiently than I can 1 pie. But as the output number
increases, other things prevent economies of scale from continuing and
may actually work against it. As scale increases, management,
distribution and marketing become more important and a larger
proportion of the overall costs.
Therefore for both of these reasons, one would expect to eventually
see an increase in the marginal cost curve.
------------------------------------------------
For help, you ideally want course notes or the ability to find the
answers for yourself.
By doing a google search for (including the quotes) :
"marginal cost curve" upward slope
I was able to find numerous pages on the topic - most of which were
homework assignments. However the 7th item on the list :
sweb.uky.edu/~mkana0/eco201/assign/ans_assign3.doc
has the answer to your question in the middle of it.
You can find plenty of useful course notes for various economics
courses at:
Resources for Economists on the Internet (Run by the AEA)
http://www.rfe.org/Teaching/textbooks/index.html
A few specific choices are :
CyberEconomics - An online Econ textbook that gives you the basics in
bite sized chunks
http://ingrimayne.saintjoe.edu/econ/
(The chapter that is of most relevance to this question is
http://ingrimayne.saintjoe.edu/econ/TheFirm/Overview9mi.html)
Elements of Economics (textbook in pdf format)
http://www.people.virginia.edu/~rrr4g/Elements.html
(note you want chapter 6)
Hopefully this more than answers your question and gives you a good
array of resources for further study. If you do have more questions,
be sure to stop back and ask another question.
Regards
Calebu2-ga |
