Question 1

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 2

Thomas Malthus' prediction of mass starvation resulting from diminishing marginal returns has not been fulfilled because

Accepted Answer

A)  the law of diminishing marginal returns did not hold in this case. 
B)  Malthus ignored other factors like technological change. 
C)  relative to Malthus' day, larger percentage of today's labor works in the agricultural sector. 
D)  All of the above. 
A)  the law of diminishing marginal returns did not hold in this case. 
B)  Malthus ignored other factors like technological change. 
C)  relative to Malthus' day, larger percentage of today's labor works in the agricultural sector. 
D)  All of the above.

Question 3

Suppose the production of mp3 players can be represented by the following production function: q = L0.4K0.4.Which of the following statements is TRUE?

Accepted Answer

A)  The production function has decreasing returns to scale. 
B)  The production function has increasing returns to scale. 
C)  The production function has constant returns to scale. 
D)  Returns to scale vary with the level of output. 
A)  The production function has decreasing returns to scale. 
B)  The production function has increasing returns to scale. 
C)  The production function has constant returns to scale. 
D)  Returns to scale vary with the level of output.

Question 4

The implementation of the assembly line is an example of 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 5

Albert's Pretzel Baking Company used to have four workers who were each in charge of making their own pretzels from start to finish.Now,one worker mixes the dough,another shapes it,the third puts the unbaked pretzels into the oven and the fourth removes the finished product.Output has doubled.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 6

What do we mean by efficient production?

Accepted Answer

Efficient production implies t

Question 7

Consider the following short-run production function: q = 5L2 - 1/3 L3.At what level of L do diminishing marginal returns begin? At what level of L do diminishing returns begin?

Accepted Answer

MP = 10L - L².Marginal product

Question 8

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 9

How much do outputs increase when labor and capital increase from 1 to 2 units for the following production function ,q = 10L0.5K0.3?

Accepted Answer

A)  7.4 units 
B)  7 units 
C)  8 units 
D)  None of the above. 
A)  7.4 units 
B)  7 units 
C)  8 units 
D)  None of the above.

Question 10

Explain why labor might not always be a variable input.

Accepted Answer

In the real world,units of labor are not

Question 11

Average productivity will fall as long as

Accepted Answer

A)  marginal productivity is falling. 
B)  it exceeds marginal productivity. 
C)  it is less than marginal productivity. 
D)  the number of workers is increasing. 
A)  marginal productivity is falling. 
B)  it exceeds marginal productivity. 
C)  it is less than marginal productivity. 
D)  the number of workers is increasing.

Question 12

-The above figure shows the isoquants for the production of steel.In which regions of production are there increasing,decreasing,and constant returns to scale?

Accepted Answer

When output is less than 10,000 tons,the

Question 13

Cobb-Douglas production functions can never possess varying returns to scale.

Accepted Answer

A) True 
 B)False

Question 14

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 15

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 16

-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 17

-The above figure shows the isoquants for producing steel.When producing less than 10,000 tons there are

Accepted Answer

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

Question 18

How much labor does a firm require to produce q = 1000 when capital is fixed at 5 and they have a production function equal to q = 200L0.5K0.5?

Accepted Answer

A)  L = 5 
B)  L = 2.5 
C)  L = 200 
D)  L = 2.25 
A)  L = 5 
B)  L = 2.5 
C)  L = 200 
D)  L = 2.25

Question 19

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 20

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

Suppose the production function for T-shirts can be represented as q = L^0.25K^0.75.Show that the marginal productivity of labor diminishes in the short run.

Thomas Malthus' prediction of mass starvation resulting from diminishing marginal returns has not been fulfilled because

Suppose the production of mp3 players can be represented by the following production function: q = L^0.4K^0.4.Which of the following statements is TRUE?

The implementation of the assembly line is an example of how

What do we mean by efficient production?

Consider the following short-run production function: q = 5L² - 1/3 L³.At what level of L do diminishing marginal returns begin? At what level of L do diminishing returns begin?

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

How much do outputs increase when labor and capital increase from 1 to 2 units for the following production function ,q = 10L^0.5K^0.3?

Explain why labor might not always be a variable input.

Average productivity will fall as long as

-The above figure shows the isoquants for the production of steel.In which regions of production are there increasing,decreasing,and constant returns to scale?

Cobb-Douglas production functions can never possess varying returns to scale.

In the long run,all factors of production are

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

-The above figure shows the isoquants for producing steel.When producing less than 10,000 tons there are

How much labor does a firm require to produce q = 1000 when capital is fixed at 5 and they have a production function equal to q = 200L^0.5K^0.5?

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

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

Introduction

Supply and Demand

Applying the Supply-And-Demand Model

Consumer Choice

Applying Consumer Theory

Costs

Competitive Firms and Markets

Applying the Competitive Model

General Equilibrium and Economic Welfare

Monopoly

Pricing and Advertising

Oligopoly and Monopolistic Competition

Game Theory

Factor Markets

Interest Rates, Investments, and Capital Markets

Uncertainty

Externalities, Open-Access, and Public Goods

Asymmetric Information

Contracts and Moral Hazards

Filters

Exam 6: Firms and Production

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.

Thomas Malthus' prediction of mass starvation resulting from diminishing marginal returns has not been fulfilled because

Suppose the production of mp3 players can be represented by the following production function: q = L0.4K0.4.Which of the following statements is TRUE?

The implementation of the assembly line is an example of how

What do we mean by efficient production?

Consider the following short-run production function: q = 5L2 - 1/3 L3.At what level of L do diminishing marginal returns begin? At what level of L do diminishing returns begin?

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

How much do outputs increase when labor and capital increase from 1 to 2 units for the following production function ,q = 10L0.5K0.3?

Explain why labor might not always be a variable input.

Average productivity will fall as long as

-The above figure shows the isoquants for the production of steel.In which regions of production are there increasing,decreasing,and constant returns to scale?

Cobb-Douglas production functions can never possess varying returns to scale.

In the long run,all factors of production are

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

-The above figure shows the isoquants for producing steel.When producing less than 10,000 tons there are

How much labor does a firm require to produce q = 1000 when capital is fixed at 5 and they have a production function equal to q = 200L0.5K0.5?

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

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

Introduction

Supply and Demand

Applying the Supply-And-Demand Model

Consumer Choice

Applying Consumer Theory

Costs

Competitive Firms and Markets

Applying the Competitive Model

General Equilibrium and Economic Welfare

Monopoly

Pricing and Advertising

Oligopoly and Monopolistic Competition

Game Theory

Factor Markets

Interest Rates, Investments, and Capital Markets

Uncertainty

Externalities, Open-Access, and Public Goods

Asymmetric Information

Contracts and Moral Hazards

Filters

Suppose the production function for T-shirts can be represented as q = L^0.25K^0.75.Show that the marginal productivity of labor diminishes in the short run.

Suppose the production of mp3 players can be represented by the following production function: q = L^0.4K^0.4.Which of the following statements is TRUE?

Consider the following short-run production function: q = 5L² - 1/3 L³.At what level of L do diminishing marginal returns begin? At what level of L do diminishing returns begin?

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

How much do outputs increase when labor and capital increase from 1 to 2 units for the following production function ,q = 10L^0.5K^0.3?

How much labor does a firm require to produce q = 1000 when capital is fixed at 5 and they have a production function equal to q = 200L^0.5K^0.5?