Question 1

-The above table shows the short-run production function for Albert's Pretzels. The law of diminishing marginal product

Accepted Answer

A) appears with the second worker. 
B) has not yet appeared for any of the levels of labor. 
C) first appears with the fifth worker. 
D) is refuted by this evidence. 
A) appears with the second worker. 
B) has not yet appeared for any of the levels of labor. 
C) first appears with the fifth worker. 
D) is refuted by this evidence.

Question 2

If a firm triples inputs and produces three times the output, then there are

Accepted Answer

A) constant returns to scale. 
B) diminishing marginal product. 
C) decreasing returns to scale. 
D) increasing returns to scale. 
A) constant returns to scale. 
B) diminishing marginal product. 
C) decreasing returns to scale. 
D) increasing returns to scale.

Question 3

Which of the following is least likely to be considered a capital input?

Accepted Answer

A) a sewing machine 
B) a tractor 
C) a telephone 
D) a ten dollar bill 
A) a sewing machine 
B) a tractor 
C) a telephone 
D) a ten dollar bill

Question 4

Which of the following statements is TRUE?

Accepted Answer

A) A Cobb-Douglas production function can have different returns to scale at different output levels. 
B) It is impossible to have increasing returns to scale for one output level, and decreasing returns to scale for a different output level. 
C) It is possible to have increasing returns to scale for one output level, and decreasing returns to scale for a different output level. 
D) None of the above. 
A) A Cobb-Douglas production function can have different returns to scale at different output levels. 
B) It is impossible to have increasing returns to scale for one output level, and decreasing returns to scale for a different output level. 
C) It is possible to have increasing returns to scale for one output level, and decreasing returns to scale for a different output level. 
D) None of the above.

Question 5

The marginal rate of technical substitution always equals

Accepted Answer

A) the slope of the total product curve. 
B) minus the ratio of the marginal products of inputs. 
C) the change in output due to a change in the amount of one input. 
D) the distance between two isoquants. 
A) the slope of the total product curve. 
B) minus the ratio of the marginal products of inputs. 
C) the change in output due to a change in the amount of one input. 
D) the distance between two isoquants.

Question 6

-At Joey's Lawncutting Service, a lawn mower cannot cut grass without a laborer. A laborer cannot cut grass without a lawn mower. Which graph in the above figure best represents the isoquants for Joey's Lawncutting Service 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 7

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

Accepted Answer

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

Question 8

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 9

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 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

Suppose the production function for T-shirts can be represented as q = L0.25K0.75. Show that the marginal productivity of labor diminishes in the short run.

Accepted Answer

In the short run, MPL = 0.25 ∗

Question 12

-According to the table above, paper product production exhibits

Accepted Answer

A) decreasing returns to scale. 
B) constant returns to scale. 
C) increasing returns to scale. 
D) varying returns to scale. 
A) decreasing returns to scale. 
B) constant returns to scale. 
C) increasing returns to scale. 
D) varying returns to scale.

Question 13

A factor of production that can be easily changed in the relevant time period is called a

Accepted Answer

A) fixed input. 
B) temporary input. 
C) variable input. 
D) substitution input. 
A) fixed input. 
B) temporary input. 
C) variable input. 
D) substitution input.

Question 14

With respect to production, the short run is best defined as a time period

Accepted Answer

A) lasting about six months. 
B) lasting about two years. 
C) in which all inputs are fixed. 
D) in which at least one input is fixed. 
A) lasting about six months. 
B) lasting about two years. 
C) in which all inputs are fixed. 
D) in which at least one input is fixed.

Question 15

Which of the following statements best summarizes the law of diminishing marginal returns?

Accepted Answer

A) In the short run, as more labor is hired, output diminishes. 
B) In the short run, as more labor is hired, output increases at a diminishing rate. 
C) In the short run, the amount of labor a firm will hire diminishes as output increases. 
D) As more labor is hired, the length of time that defines the short run diminishes. 
A) In the short run, as more labor is hired, output diminishes. 
B) In the short run, as more labor is hired, output increases at a diminishing rate. 
C) In the short run, the amount of labor a firm will hire diminishes as output increases. 
D) As more labor is hired, the length of time that defines the short run diminishes.

Question 16

The implementation of the assembly line is an example how

Accepted Answer

A) changes in the organization of production improve productivity. 
B) neutral technical change improves productivity. 
C) non-neutral technical change can decrease productivity. 
D) labor saving technical change increases economy-wide unemployment. 
A) changes in the organization of production improve productivity. 
B) neutral technical change improves productivity. 
C) non-neutral technical change can decrease productivity. 
D) labor saving technical change increases economy-wide unemployment.

Question 17

Which of the following statements is TRUE?

Accepted Answer

A) Labor is always a variable input, whereas Capital is always a fixed input. 
B) Labor is always a fixed input, whereas Capital is always a variable input. 
C) Labor can be a fixed input., and Capital can be a variable input. 
D) Labor can be a fixed input, and Capital is always a fixed input. 
A) Labor is always a variable input, whereas Capital is always a fixed input. 
B) Labor is always a fixed input, whereas Capital is always a variable input. 
C) Labor can be a fixed input., and Capital can be a variable input. 
D) Labor can be a fixed input, and Capital is always a fixed input.

Question 18

To say that isoquants are convex is to say that

Accepted Answer

A) the marginal rate of technical substitution falls as labor increases. 
B) capital and labor are perfect substitutes. 
C) labor, but not capital, is subject to the law of diminishing marginal returns. 
D) there are constant returns to scale. 
A) the marginal rate of technical substitution falls as labor increases. 
B) capital and labor are perfect substitutes. 
C) labor, but not capital, is subject to the law of diminishing marginal returns. 
D) there are constant returns to scale.

Question 19

Suppose the production of DVD players can be represented by the following production function: q = L0.4K0.4. The firm currently produces q1 units. If all inputs doubled, the new level of output will equal

Accepted Answer

A) 20.4 * q1. 
B) 20.8 * q1. 
C) 0.8 * q1. 
D) 1.6 * q1. 
A) 20.4 * q1. 
B) 20.8 * q1. 
C) 0.8 * q1. 
D) 1.6 * q1.

Question 20

If a firm doubles inputs and produces three times the output, then there are

Accepted Answer

A) constant returns to scale. 
B) diminishing marginal product. 
C) decreasing returns to scale. 
D) increasing returns to scale. 
A) constant returns to scale. 
B) diminishing marginal product. 
C) decreasing returns to scale. 
D) increasing returns to scale.

-The above table shows the short-run production function for Albert's Pretzels. The law of diminishing marginal product

If a firm triples inputs and produces three times the output, then there are

Which of the following is least likely to be considered a capital input?

Which of the following statements is TRUE?

The marginal rate of technical substitution always equals

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

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

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

Suppose the production function for T-shirts can be represented as q = L0.25K0.75. Show that the marginal productivity of labor diminishes in the short run.

-According to the table above, paper product production exhibits

A factor of production that can be easily changed in the relevant time period is called a

With respect to production, the short run is best defined as a time period

Which of the following statements best summarizes the law of diminishing marginal returns?

The implementation of the assembly line is an example how

Which of the following statements is TRUE?

To say that isoquants are convex is to say that

Suppose the production of DVD players can be represented by the following production function: q = L0.4K0.4. The firm currently produces q1 units. If all inputs doubled, the new level of output will equal

If a firm doubles inputs and produces three times the output, then there are

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

-The above table shows the short-run production function for Albert's Pretzels. The law of diminishing marginal product

If a firm triples inputs and produces three times the output, then there are

Which of the following is least likely to be considered a capital input?

Which of the following statements is TRUE?

The marginal rate of technical substitution always equals

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

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

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

Suppose the production function for T-shirts can be represented as q = L0.25K0.75. Show that the marginal productivity of labor diminishes in the short run.

-According to the table above, paper product production exhibits

A factor of production that can be easily changed in the relevant time period is called a

With respect to production, the short run is best defined as a time period

Which of the following statements best summarizes the law of diminishing marginal returns?

The implementation of the assembly line is an example how

Which of the following statements is TRUE?

To say that isoquants are convex is to say that

Suppose the production of DVD players can be represented by the following production function: q = L0.4K0.4. The firm currently produces q1 units. If all inputs doubled, the new level of output will equal

If a firm doubles inputs and produces three times the output, then there are

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