Question 1

Let the production function be q = ALaKb. The function exhibits increasing returns to scale if

Accepted Answer

A) a + b = 1. B) a + b > 1. C) a + b < 1. D) Cannot be determined with the information given. A) a + b = 1. B) a + b > 1. C) a + b < 1. D) Cannot be determined with the information given.

Question 2

The Average 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 3

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

Accepted Answer

A) present when producing less than 10,000 tons. 
B) present when producing less than 20,000 tons. 
C) present when producing less than 30,000 tons. 
D) never present. 
A) present when producing less than 10,000 tons. 
B) present when producing less than 20,000 tons. 
C) present when producing less than 30,000 tons. 
D) never present.

Question 4

If a firm fired one worker and lost 12 units of production and decides to add one more unit of capital, then to remain on the same isoquant what must be TRUE?

Accepted Answer

A) The MPK of the next unit of capital added equals 12. 
B) The firm must force the other workers to work more. 
C) The firm will experience a decline in output. 
D) The marginal rate of technical substitution is greater than 12. 
A) The MPK of the next unit of capital added equals 12. 
B) The firm must force the other workers to work more. 
C) The firm will experience a decline in output. 
D) The marginal rate of technical substitution is greater than 12.

Question 5

Let the production function be q = ALaKb. The function exhibits decreasing returns to scale if

Accepted Answer

A) a + b = 1. B) a + b > 1. C) a + b < 1. D) Cannot be determined with the information given. A) a + b = 1. B) a + b > 1. C) a + b < 1. D) Cannot be determined with the information given.

Question 6

Amazon.com purchased Kiva Systems, intending to use its robots in warehouses. This is an example of

Accepted Answer

A) neutral technical change. 
B) labor-saving technical change. 
C) division of labor. 
D) economies of scale. 
A) neutral technical change. 
B) labor-saving technical change. 
C) division of labor. 
D) economies of scale.

Question 7

-The slope of an isoquant

Accepted Answer

A) gives the substitutability of inputs while keeping output constant. 
B) shows how output varies while keeping inputs constant. 
C) is independent of the marginal product of capital. 
D) shows the firm's returns to scale. 
A) gives the substitutability of inputs while keeping output constant. 
B) shows how output varies while keeping inputs constant. 
C) is independent of the marginal product of capital. 
D) shows the firm's returns to scale.

Question 8

If marginal productivity is decreasing as more labor is hired, then average productivity must be decreasing as well.

Accepted Answer

A) True 
 B)False

Let the production function be q = AL^aK^b. The function exhibits increasing returns to scale if

The Average Product of Labor is

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

If a firm fired one worker and lost 12 units of production and decides to add one more unit of capital, then to remain on the same isoquant what must be TRUE?

Let the production function be q = AL^aK^b. The function exhibits decreasing returns to scale if

Amazon.com purchased Kiva Systems, intending to use its robots in warehouses. This is an example of

-The slope of an isoquant

If marginal productivity is decreasing as more labor is hired, then average productivity must be decreasing as well.

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

Let the production function be q = ALaKb. The function exhibits increasing returns to scale if

The Average Product of Labor is

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

If a firm fired one worker and lost 12 units of production and decides to add one more unit of capital, then to remain on the same isoquant what must be TRUE?

Let the production function be q = ALaKb. The function exhibits decreasing returns to scale if

Amazon.com purchased Kiva Systems, intending to use its robots in warehouses. This is an example of

-The slope of an isoquant

If marginal productivity is decreasing as more labor is hired, then average productivity must be decreasing as well.

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

Let the production function be q = AL^aK^b. The function exhibits increasing returns to scale if

Let the production function be q = AL^aK^b. The function exhibits decreasing returns to scale if