Question 1

If capital increases by two units, and MRTS is 1, then what is the MPL?

Accepted Answer

A) 2 
B) 1/2 
C) 1 
D) Not enough information given. 
A) 2 
B) 1/2 
C) 1 
D) Not enough information given.

Question 2

In the long run, all factors of production are

Accepted Answer

A) variable. 
B) fixed. 
C) materials. 
D) rented. 
A) variable. 
B) fixed. 
C) materials. 
D) rented.

Question 3

A firm engaging in efficient production, using current technology, ________ produce its current level of production with ________ inputs.

Accepted Answer

A) could; fewer 
B) cannot; fewer 
C) cannot, more 
D) cannot; different 
A) could; fewer 
B) cannot; fewer 
C) cannot, more 
D) cannot; different

Question 4

Which of the following is likely to have the longest long run?

Accepted Answer

A) a beauty salon. 
B) a pizza parlor. 
C) a road construction firm. 
D) an airline. 
A) a beauty salon. 
B) a pizza parlor. 
C) a road construction firm. 
D) an airline.

Question 5

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 6

Which of the following statements is TRUE?

Accepted Answer

A) Labor is always a variable input. 
B) Capital is always a fixed input. 
C) Materials are always variable inputs. 
D) None of the above. 
A) Labor is always a variable input. 
B) Capital is always a fixed input. 
C) Materials are always variable inputs. 
D) None of the above.

Question 7

L-shaped isoquants imply that production requires that the inputs

Accepted Answer

A) are perfect substitutes. 
B) are imperfect substitutes. 
C) cannot be used together. 
D) must be used together in a certain proportion. 
A) are perfect substitutes. 
B) are imperfect substitutes. 
C) cannot be used together. 
D) must be used together in a certain proportion.

Question 8

The slope of an isoquant tells us

Accepted Answer

A) how much output increases when both inputs are increased. 
B) the increase in MPL when capital increases. 
C) the decrease in capital necessary to keep output constant when labor increases by one unit. 
D) the decrease in capital necessary to keep MPL constant when labor increases by one unit. 
A) how much output increases when both inputs are increased. 
B) the increase in MPL when capital increases. 
C) the decrease in capital necessary to keep output constant when labor increases by one unit. 
D) the decrease in capital necessary to keep MPL constant when labor increases by one unit.

Question 9

If the marginal product of labor is constant for all levels of output, then the average product of labor

Accepted Answer

A) is constant. 
B) equals the marginal product of labor. 
C) Both A and B above. 
D) Either A or B above but not both. 
A) is constant. 
B) equals the marginal product of labor. 
C) Both A and B above. 
D) Either A or B above but not both.

Question 10

Technical and organizational change

Accepted Answer

A) typically reduces prices by increasing the supply of the product, ceteris paribus. 
B) typically reduces prices by decreasing the demand for the product, ceteris paribus. 
C) typically increases prices by increasing the demand for the product, ceteris paribus. 
D) typically increases prices by decreasing the supply for the product, ceteris paribus. 
A) typically reduces prices by increasing the supply of the product, ceteris paribus. 
B) typically reduces prices by decreasing the demand for the product, ceteris paribus. 
C) typically increases prices by increasing the demand for the product, ceteris paribus. 
D) typically increases prices by decreasing the supply for the product, ceteris paribus.

Question 11

-Which graph in the above figure represents the isoquants where, as the amount of labor used increases and the amount of capital used decreases, the marginal product of labor rises (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 12

Returns to specialization can occur when

Accepted Answer

A) increasing the amount of labor allows workers to specialize. 
B) the exponents of the Cobb-Douglas production function are greater than 1. 
C) a firm doubles its inputs. 
D) the average cost curve is above the marginal costs curve. 
A) increasing the amount of labor allows workers to specialize. 
B) the exponents of the Cobb-Douglas production function are greater than 1. 
C) a firm doubles its inputs. 
D) the average cost curve is above the marginal costs curve.

Question 13

Explain how firms that each produce as efficiently as they can may not be equally productive.

Accepted Answer

Firm-specific characteristics

Question 14

Isoquants that are downward-sloping straight lines imply that the inputs

Accepted Answer

A) are perfect substitutes. 
B) are imperfect substitutes. 
C) cannot be used together. 
D) must be used together in varying proportions. 
A) are perfect substitutes. 
B) are imperfect substitutes. 
C) cannot be used together. 
D) must be used together in varying proportions.

Question 15

Changing how production is organized cannot result in changes in productivity.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is an example of a production function with fixed proportions?

Accepted Answer

A) putting orange juice into cartons 
B) mowing lawns 
C) cutting hair 
D) teaching economics 
A) putting orange juice into cartons 
B) mowing lawns 
C) cutting hair 
D) teaching economics

Question 17

Which of the following is an input to the production process?

Accepted Answer

A) a janitor's time 
B) a cement mixer 
C) Both A and B 
D) None of the above. 
A) a janitor's time 
B) a cement mixer 
C) Both A and B 
D) None of the above.

Question 18

Total Product 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 19

The actual time length of the short run is determined by when diminishing marginal returns start.

Accepted Answer

A) True 
 B)False

Question 20

-The above table shows the short-run production function for Albert's Pretzels. The average product of labor

Accepted Answer

A) increases first and then decreases. 
B) decreases first and then increases. 
C) decreases throughout. 
D) increases throughout. 
A) increases first and then decreases. 
B) decreases first and then increases. 
C) decreases throughout. 
D) increases throughout.

If capital increases by two units, and MRTS is 1, then what is the MPL?

In the long run, all factors of production are

A firm engaging in efficient production, using current technology, produce its current level of production with inputs.

Which of the following is likely to have the longest long run?

The Marginal Product of Labor is

Which of the following statements is TRUE?

L-shaped isoquants imply that production requires that the inputs

The slope of an isoquant tells us

If the marginal product of labor is constant for all levels of output, then the average product of labor

Technical and organizational change

-Which graph in the above figure represents the isoquants where, as the amount of labor used increases and the amount of capital used decreases, the marginal product of labor rises (units of capital per day is on the vertical axis and units of labor per day is on the horizontal axis)?

Returns to specialization can occur when

Explain how firms that each produce as efficiently as they can may not be equally productive.

Isoquants that are downward-sloping straight lines imply that the inputs

Changing how production is organized cannot result in changes in productivity.

Which of the following is an example of a production function with fixed proportions?

Which of the following is an input to the production process?

Total Product is

The actual time length of the short run is determined by when diminishing marginal returns start.

-The above table shows the short-run production function for Albert's Pretzels. The average product of labor

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 capital increases by two units, and MRTS is 1, then what is the MPL?

In the long run, all factors of production are

A firm engaging in efficient production, using current technology, ________ produce its current level of production with ________ inputs.

Which of the following is likely to have the longest long run?

The Marginal Product of Labor is

Which of the following statements is TRUE?

L-shaped isoquants imply that production requires that the inputs

The slope of an isoquant tells us

If the marginal product of labor is constant for all levels of output, then the average product of labor

Technical and organizational change

-Which graph in the above figure represents the isoquants where, as the amount of labor used increases and the amount of capital used decreases, the marginal product of labor rises (units of capital per day is on the vertical axis and units of labor per day is on the horizontal axis)?

Returns to specialization can occur when

Explain how firms that each produce as efficiently as they can may not be equally productive.

Isoquants that are downward-sloping straight lines imply that the inputs

Changing how production is organized cannot result in changes in productivity.

Which of the following is an example of a production function with fixed proportions?

Which of the following is an input to the production process?

Total Product is

The actual time length of the short run is determined by when diminishing marginal returns start.

-The above table shows the short-run production function for Albert's Pretzels. The average product of labor

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

A firm engaging in efficient production, using current technology, produce its current level of production with inputs.