Question 1

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

Accepted Answer

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

Question 2

-The table in the above figure shows the levels of output resulting from different levels of inputs.Which of the following conclusions can be drawn from this information?

Accepted Answer

A)  Increasing returns to scale exist between 100 and 200 units of output. 
B)  Constant returns to scale exist throughout all levels of production. 
C)  Labor is subject to diminishing marginal productivity in the short run. 
D)  No firm conclusions can be drawn. 
A)  Increasing returns to scale exist between 100 and 200 units of output. 
B)  Constant returns to scale exist throughout all levels of production. 
C)  Labor is subject to diminishing marginal productivity in the short run. 
D)  No firm conclusions can be drawn.

Question 3

In the above figure,Graph D with Capital on the vertical axis and labor on the horizontal axis implies that

Accepted Answer

A)  the marginal product of labor is increasing as more labor is employed. 
B)  the marginal product of labor is decreasing as more labor is employed. 
C)  the capital and labor are perfect substitutes. 
D)  capital and labor have to be employed in fixed proportions. 
A)  the marginal product of labor is increasing as more labor is employed. 
B)  the marginal product of labor is decreasing as more labor is employed. 
C)  the capital and labor are perfect substitutes. 
D)  capital and labor have to be employed in fixed proportions.

Question 4

Explain the difference between diminishing returns to labor and diminishing marginal returns to labor.

Accepted Answer

Diminishing returns to labor means that

Question 5

Unlike indifference curves,isoquants can intersect.

Accepted Answer

A) True 
 B)False

Question 6

If the average productivity 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 7

Given the production function q = 4L + K,what is the marginal product of labor when capital is fixed at 50?

Accepted Answer

A)  54 
B)  4 
C)  50 
D)  250 
A)  54 
B)  4 
C)  50 
D)  250

Question 8

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 9

-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 10

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

Accepted Answer

A)  $ 2^{0.4} \mathrm{q} 1 $. 
B)  $ 20.8 q 1 $. 
C)  $ 0.8 \mathrm{q} 1 $. 
D)  $ 1.6 \mathrm{q} 1 $. 
A)  $ 2^{0.4} \mathrm{q} 1 $. 
B)  $ 20.8 q 1 $. 
C)  $ 0.8 \mathrm{q} 1 $. 
D)  $ 1.6 \mathrm{q} 1 $.

Question 11

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 12

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 13

The length of the short-run is the same for all firms.

Accepted Answer

A) True 
 B)False

Question 14

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 15

If capital is fixed,but a firm varies labor

Accepted Answer

A)  the firm stays on the same isoquant. 
B)  the firm moves to a new isoquant. 
C)  the firm might move to a new isoquant, depending on how much labor is added. 
D)  the firm's output will be dependent on the marginal rate of technical substitution. 
A)  the firm stays on the same isoquant. 
B)  the firm moves to a new isoquant. 
C)  the firm might move to a new isoquant, depending on how much labor is added. 
D)  the firm's output will be dependent on the marginal rate of technical substitution.

Question 16

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 17

-The above figure 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 18

-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 capital per day is on the vertical axis and 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 table in the above figure shows the levels of output resulting from different levels of inputs.At which level of input are there constant returns to scale?

Accepted Answer

A)  400-600 units 
B)  Constant returns to scale exist throughout all levels of production. 
C)  Constant returns to scale do not exist at any level of production. 
D)  No firm conclusions can be drawn. 
A)  400-600 units 
B)  Constant returns to scale exist throughout all levels of production. 
C)  Constant returns to scale do not exist at any level of production. 
D)  No firm conclusions can be drawn.

Question 20

If a firms cuts inputs in half,and output falls by more than half,then there are

Accepted Answer

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

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

-The table in the above figure shows the levels of output resulting from different levels of inputs.Which of the following conclusions can be drawn from this information?

In the above figure,Graph D with Capital on the vertical axis and labor on the horizontal axis implies that

Explain the difference between diminishing returns to labor and diminishing marginal returns to labor.

Unlike indifference curves,isoquants can intersect.

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

Given the production function q = 4L + K,what is the marginal product of labor when capital is fixed at 50?

Total Product is

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

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

The implementation of the assembly line is an example how

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

The length of the short-run is the same for all firms.

Diminishing marginal returns lead to diminishing returns

If capital is fixed,but a firm varies labor

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

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

-The table in the above figure shows the levels of output resulting from different levels of inputs.At which level of input are there constant returns to scale?

If a firms cuts inputs in half,and output falls by more than half,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

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

-The table in the above figure shows the levels of output resulting from different levels of inputs.Which of the following conclusions can be drawn from this information?

In the above figure,Graph D with Capital on the vertical axis and labor on the horizontal axis implies that

Explain the difference between diminishing returns to labor and diminishing marginal returns to labor.

Unlike indifference curves,isoquants can intersect.

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

Given the production function q = 4L + K,what is the marginal product of labor when capital is fixed at 50?

Total Product is

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

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

The implementation of the assembly line is an example how

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

The length of the short-run is the same for all firms.

Diminishing marginal returns lead to diminishing returns

If capital is fixed,but a firm varies labor

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

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

-The table in the above figure shows the levels of output resulting from different levels of inputs.At which level of input are there constant returns to scale?

If a firms cuts inputs in half,and output falls by more than half,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

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