Question 1

Decreasing returns to scale may occur as increasing the amount of inputs used

Accepted Answer

A)  increases specialization. 
B)  always increases the amount of output produced. 
C)  may cause coordination difficulties. 
D)  increases efficiency. 
A)  increases specialization. 
B)  always increases the amount of output produced. 
C)  may cause coordination difficulties. 
D)  increases efficiency.

Question 2

During the "computer revolution" of the 1980s and 1990s,many firms replaced old technology with new technology.What might explain why firms don't change technology as quickly today?

Accepted Answer

The marginal rate of technical substitut

Question 3

-The above figure 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.

Question 4

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 5

Which of the following statements is TRUE in the short run?

Accepted Answer

A)  Generally, labor is a fixed input. 
B)  Generally, capital is a fixed input. 
C)  Raw materials are generally considered to be fixed inputs. 
D)  None of the above. 
A)  Generally, labor is a fixed input. 
B)  Generally, capital is a fixed input. 
C)  Raw materials are generally considered to be fixed inputs. 
D)  None of the above.

Question 6

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 7

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 8

Which of the following is NOT a factor of production?

Accepted Answer

A)  labor 
B)  capital 
C)  money 
D)  materials 
A)  labor 
B)  capital 
C)  money 
D)  materials

Question 9

The production of the Tata Nano 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)  the benefits of being a monopoly producers of the Nano. 
A)  organizational changes leading to increased productivity. 
B)  decreasing returns to scale. 
C)  neutral technical change leading to increases in productivity. 
D)  the benefits of being a monopoly producers of the Nano.

Question 10

Show that increasing returns to scale can co-exist with diminishing marginal productivity.

Accepted Answer

The production function below illustrate

Question 11

With capital on the vertical axis and labor on the horizontal axis,vertical isoquants imply that

Accepted Answer

A)  capital and labor are perfect substitutes. 
B)  capital and labor must be used together in a certain proportion. 
C)  capital is not productive. 
D)  labor is not productive. 
A)  capital and labor are perfect substitutes. 
B)  capital and labor must be used together in a certain proportion. 
C)  capital is not productive. 
D)  labor is not productive.

Question 12

Amazon.com's purchase of 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 13

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 14

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.

Question 15

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 16

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 17

-The above figure depicts a short-run production function for Albert's Pretzels.The marginal product of labor

Accepted Answer

A)  rises then falls as the amount of capital increases. 
B)  falls then rises as the amount of labor increases. 
C)  is greater than or equal to the average product of labor for all amounts of labor. 
D)  is less than or equal to the average product of labor for all amounts of labor. 
A)  rises then falls as the amount of capital increases. 
B)  falls then rises as the amount of labor increases. 
C)  is greater than or equal to the average product of labor for all amounts of labor. 
D)  is less than or equal to the average product of labor for all amounts of labor.

Question 18

Joey cuts grass during the summer.He rents a lawn mower from his dad.Which of the following statements best illustrates the difference between the short run and the long run for Joey?

Accepted Answer

A)  Joey's friends say they will help him, but when he calls them, they say they have other things to do. 
B)  When Joey acquires more customers, he responds by working more hours. Next year, he will buy a lawn mower and split the work with his brother. 
C)  Some customers pay Joey immediately; others wait till the following week. 
D)  Joey has had to turn away some customers because he is already too busy. 
A)  Joey's friends say they will help him, but when he calls them, they say they have other things to do. 
B)  When Joey acquires more customers, he responds by working more hours. Next year, he will buy a lawn mower and split the work with his brother. 
C)  Some customers pay Joey immediately; others wait till the following week. 
D)  Joey has had to turn away some customers because he is already too busy.

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

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.

Decreasing returns to scale may occur as increasing the amount of inputs used

During the "computer revolution" of the 1980s and 1990s,many firms replaced old technology with new technology.What might explain why firms don't change technology as quickly today?

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

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

Which of the following statements is TRUE in the short run?

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

Which of the following statements is TRUE?

Which of the following is NOT a factor of production?

The production of the Tata Nano is an example of

Show that increasing returns to scale can co-exist with diminishing marginal productivity.

With capital on the vertical axis and labor on the horizontal axis,vertical isoquants imply that

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

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

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

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

-The above figure depicts a short-run production function for Albert's Pretzels.The marginal product of labor

Joey cuts grass during the summer.He rents a lawn mower from his dad.Which of the following statements best illustrates the difference between the short run and the long run for Joey?

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

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

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

Decreasing returns to scale may occur as increasing the amount of inputs used

During the "computer revolution" of the 1980s and 1990s,many firms replaced old technology with new technology.What might explain why firms don't change technology as quickly today?

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

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

Which of the following statements is TRUE in the short run?

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

Which of the following statements is TRUE?

Which of the following is NOT a factor of production?

The production of the Tata Nano is an example of

Show that increasing returns to scale can co-exist with diminishing marginal productivity.

With capital on the vertical axis and labor on the horizontal axis,vertical isoquants imply that

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

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

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

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

-The above figure depicts a short-run production function for Albert's Pretzels.The marginal product of labor

Joey cuts grass during the summer.He rents a lawn mower from his dad.Which of the following statements best illustrates the difference between the short run and the long run for Joey?

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

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

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