Question 1

If MPL = 3, and MRTS = -4, what is MPK?

Accepted Answer

A) 12 
B) -12 
C) 3/4 
D) -3/4 
A) 12 
B) -12 
C) 3/4 
D) -3/4

Question 2

Diminishing marginal returns lead to diminishing returns

Accepted Answer

A) when marginal returns fall but remain positive. 
B) only in theory. 
C) when marginal returns become negative. 
D) when labor exceeds capital. 
A) when marginal returns fall but remain positive. 
B) only in theory. 
C) when marginal returns become negative. 
D) when labor exceeds capital.

Question 3

If you are running a winery and you need one bottle for every 750ml of wine, then your production function

Accepted Answer

A) is inefficient. 
B) is considered "fixed-proportion." 
C) will have a diminishing marginal rate of technical substitution. 
D) has downward-sloping, straight line isoquants. 
A) is inefficient. 
B) is considered "fixed-proportion." 
C) will have a diminishing marginal rate of technical substitution. 
D) has downward-sloping, straight line isoquants.

Question 4

The marginal rate of technical substitution shows

Accepted Answer

A) how many machines can be replaced by computers, keeping output constant. 
B) how many computers are needed to replace workers so that output can increase. 
C) the rate at which technology advances change marginal productivity. 
D) how many workers can do the job of one computer, keeping output constant. 
A) how many machines can be replaced by computers, keeping output constant. 
B) how many computers are needed to replace workers so that output can increase. 
C) the rate at which technology advances change marginal productivity. 
D) how many workers can do the job of one computer, keeping output constant.

Question 5

Joey cuts grass during the summer. He owns one lawn mower. For him, the short run is equal to

Accepted Answer

A) the amount of time it takes to acquire more customers. 
B) the amount of time it takes to hire an additional employee. 
C) the amount of time it takes to hire an additional employee and buy another lawn mower. 
D) the amount of time it takes to mow one lawn. 
A) the amount of time it takes to acquire more customers. 
B) the amount of time it takes to hire an additional employee. 
C) the amount of time it takes to hire an additional employee and buy another lawn mower. 
D) the amount of time it takes to mow one lawn.

Question 6

-The above figure shows the isoquants for producing steel. Constant returns to scale are

Accepted Answer

A) present when producing less than 10,000 tons. 
B) present when producing between 10,000 and 20,000 tons. 
C) present when producing more than 20,000 tons. 
D) never present. 
A) present when producing less than 10,000 tons. 
B) present when producing between 10,000 and 20,000 tons. 
C) present when producing more than 20,000 tons. 
D) never present.

Question 7

Capital saving nonneutral technical progress allows a firm to

Accepted Answer

A) produce more output with the same inputs. 
B) use less capital and the same amount of other inputs to produce the same level of output. 
C) use more capital to produce the same level of output. 
D) use less capital and more of other inputs to produce the same level of output. 
A) produce more output with the same inputs. 
B) use less capital and the same amount of other inputs to produce the same level of output. 
C) use more capital to produce the same level of output. 
D) use less capital and more of other inputs to produce the same level of output.

Question 8

If a firm hires one worker and eliminates four units of capital, and hires one more worker and replaces three more units of capital, keeping output constant, then

Accepted Answer

A) workers and capital are perfect substitutes. 
B) the firm is operating inefficiently because capital is more efficient than workers. 
C) the firm is experiencing a diminishing marginal rate of technical substitution. 
D) there are decreasing returns to scale. 
A) workers and capital are perfect substitutes. 
B) the firm is operating inefficiently because capital is more efficient than workers. 
C) the firm is experiencing a diminishing marginal rate of technical substitution. 
D) there are decreasing returns to scale.

Question 9

Unlike indifference curves, isoquants can intersect.

Accepted Answer

A) True 
 B)False

Question 10

If the average product of labor equals the marginal product of labor, then

Accepted Answer

A) the average product of labor is at a maximum. 
B) the marginal product of labor is at a maximum. 
C) Both A and B above. 
D) Neither A nor B above. 
A) the average product of labor is at a maximum. 
B) the marginal product of labor is at a maximum. 
C) Both A and B above. 
D) Neither A nor B above.

Question 11

The use of robots in agriculture is an example of

Accepted Answer

A) organizational changes leading to increased productivity. 
B) decreasing returns to scale. 
C) neutral technical change leading to increases in productivity. 
D) nonneutral technical progress. 
A) organizational changes leading to increased productivity. 
B) decreasing returns to scale. 
C) neutral technical change leading to increases in productivity. 
D) nonneutral technical progress.

Question 12

The Marginal Product of Labor is

Accepted Answer

A) the change in total product resulting from an extra unit of labor, holding other factors constant. 
B) the ratio of output to the number of workers used to produce that output. 
C) the amount of output that can be produced by a given amount of labor. 
D) equal to the marginal product of labor when the average product is increasing. 
A) the change in total product resulting from an extra unit of labor, holding other factors constant. 
B) the ratio of output to the number of workers used to produce that output. 
C) the amount of output that can be produced by a given amount of labor. 
D) equal to the marginal product of labor when the average product is increasing.

Question 13

Which situation is most likely to exhibit diminishing marginal returns to labor?

Accepted Answer

A) a factory that obtains a new machine for every new worker hired 
B) a factory that hires more workers and never increases the amount of machinery 
C) a factory that increases the amount of machinery and holds the number of workers constant 
D) None of these situations will result in diminishing marginal returns to labor. 
A) a factory that obtains a new machine for every new worker hired 
B) a factory that hires more workers and never increases the amount of machinery 
C) a factory that increases the amount of machinery and holds the number of workers constant 
D) None of these situations will result in diminishing marginal returns to labor.

Question 14

Which of the following inputs is normally considered to be fixed in the short run?

Accepted Answer

A) labor 
B) capital 
C) money 
D) All of the above. 
A) labor 
B) capital 
C) money 
D) All of the above.

Question 15

A production function tells the firm

Accepted Answer

A) the maximum output it can expect to produce with a given mix of inputs. 
B) the average output it can expect to produce with a given mix of inputs. 
C) the minimum output it can expect to produce with a given mix of inputs. 
D) the average level of production for other firms in the industry. 
A) the maximum output it can expect to produce with a given mix of inputs. 
B) the average output it can expect to produce with a given mix of inputs. 
C) the minimum output it can expect to produce with a given mix of inputs. 
D) the average level of production for other firms in the industry.

Question 16

Jennifer is the only employee of her sole proprietorship. She is entertaining the idea of hiring an additional employee. She knows that on her own she can produce 100 units per day. Jennifer figures that Applicant A will help her produce 175 units per day whereas Applicant B will help her produce 155 units per day. Which of the following statements is MOST accurate?

Accepted Answer

A) Applicant B has a marginal product of 75 units. 
B) Applicant B has an average product of 77.5 units. 
C) Applicant A has a marginal product of 75 units. 
D) Applicant A has an average product of 87.5 units. 
A) Applicant B has a marginal product of 75 units. 
B) Applicant B has an average product of 77.5 units. 
C) Applicant A has a marginal product of 75 units. 
D) Applicant A has an average product of 87.5 units.

Question 17

-Lectures in microeconomics can be delivered either by an instructor (labor)or a movie (capital)or any combination of both. Each minute of the instructor's time delivers the same amount of information as a minute of the movie. Which graph in the above figure best represents the isoquants for lectures in microeconomics when units of capital per day is on the vertical axis and units of labor per day is on the horizontal axis?

Accepted Answer

A) Graph A 
B) Graph B 
C) Graph C 
D) Graph D 
A) Graph A 
B) Graph B 
C) Graph C 
D) Graph D

Question 18

-Lectures in microeconomics can be delivered either by an instructor (labor)or a movie (capital)or any combination of both. Yet, it gets harder and harder to substitute more movies for an instructor the more movies are already used. Which graph in the above figure best represents the isoquants for lectures in microeconomics when units of capital per day is on the vertical axis and units of labor per day is on the horizontal axis?

Accepted Answer

A) Graph A 
B) Graph B 
C) Graph C 
D) Graph D 
A) Graph A 
B) Graph B 
C) Graph C 
D) Graph D

Question 19

-The above table shows the short-run production function for Albert's Pretzels. The marginal product of labor for the third worker is

Accepted Answer

A) 6. 
B) 8. 
C) 24. 
D) not known from the information provided. 
A) 6. 
B) 8. 
C) 24. 
D) not known from the information provided.

Question 20

If MPK = 3, and MRTS = -4, what is MPL?

Accepted Answer

A) 12 
B) -12 
C) 4/3 
D) -4/3 
A) 12 
B) -12 
C) 4/3 
D) -4/3

If MP_L = 3, and MRTS = -4, what is MP_K?

Diminishing marginal returns lead to diminishing returns

If you are running a winery and you need one bottle for every 750ml of wine, then your production function

The marginal rate of technical substitution shows

Joey cuts grass during the summer. He owns one lawn mower. For him, the short run is equal to

-The above figure shows the isoquants for producing steel. Constant returns to scale are

Capital saving nonneutral technical progress allows a firm to

If a firm hires one worker and eliminates four units of capital, and hires one more worker and replaces three more units of capital, keeping output constant, then

Unlike indifference curves, isoquants can intersect.

If the average product of labor equals the marginal product of labor, then

The use of robots in agriculture is an example of

The Marginal Product of Labor is

Which situation is most likely to exhibit diminishing marginal returns to labor?

Which of the following inputs is normally considered to be fixed in the short run?

A production function tells the firm

-The above table shows the short-run production function for Albert's Pretzels. The marginal product of labor for the third worker is

If MP_K = 3, and MRTS = -4, what is MP_L?

Introduction

Supply and Demand

Empirical Methods for Demand Analysis

Consumer Choice

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Game Theory and Business Strategy

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters

Exam 5: Production

If MPL = 3, and MRTS = -4, what is MPK?

Diminishing marginal returns lead to diminishing returns

If you are running a winery and you need one bottle for every 750ml of wine, then your production function

The marginal rate of technical substitution shows

Joey cuts grass during the summer. He owns one lawn mower. For him, the short run is equal to

-The above figure shows the isoquants for producing steel. Constant returns to scale are

Capital saving nonneutral technical progress allows a firm to

If a firm hires one worker and eliminates four units of capital, and hires one more worker and replaces three more units of capital, keeping output constant, then

Unlike indifference curves, isoquants can intersect.

If the average product of labor equals the marginal product of labor, then

The use of robots in agriculture is an example of

The Marginal Product of Labor is

Which situation is most likely to exhibit diminishing marginal returns to labor?

Which of the following inputs is normally considered to be fixed in the short run?

A production function tells the firm

-The above table shows the short-run production function for Albert's Pretzels. The marginal product of labor for the third worker is

If MPK = 3, and MRTS = -4, what is MPL?

Introduction

Supply and Demand

Empirical Methods for Demand Analysis

Consumer Choice

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Game Theory and Business Strategy

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters

If MP_L = 3, and MRTS = -4, what is MP_K?

If MP_K = 3, and MRTS = -4, what is MP_L?