Question 1

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

Accepted Answer

Diminishing returns to labor means that

Question 2

What is the MRTS for a firm with the following production function,q = 10L0.5K0.3?

Accepted Answer

A)  MRTS = -   
B)  The firm will substitute a constant 3 units of capital for 5 units of labor. 
C)  The MRTS does not exist because labor and capital are perfect complements. 
D)  None of the above. 
A)  MRTS = -   
B)  The firm will substitute a constant 3 units of capital for 5 units of labor. 
C)  The MRTS does not exist because labor and capital are perfect complements. 
D)  None of the above.

Question 3

Does this production function,q = 10L0.5K0.3,experience increasing,decreasing or constant returns to scale?

Accepted Answer

A)  Decreasing because a 100% increase in inputs increases outputs by 80%. 
B)  Increasing because an 80% increase in inputs increases outputs by 100%. 
C)  Decreasing because 0.5 + 0.3 < 1. 
D)  A and C. 
A)  Decreasing because a 100% increase in inputs increases outputs by 80%. 
B)  Increasing because an 80% increase in inputs increases outputs by 100%. 
C)  Decreasing because 0.5 + 0.3 < 1. 
D)  A and C.

Question 4

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

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 5

-The above figure shows the short-run production function for Albert's Pretzels.The marginal productivity 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 6

Which entity produces the greatest proportion of U.S.gross national product?

Accepted Answer

A)  government 
B)  non-profit organizations such as hospitals 
C)  firms 
D)  universities 
A)  government 
B)  non-profit organizations such as hospitals 
C)  firms 
D)  universities

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

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.

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

What is the MRTS for a firm with the following production function,q = 10L^0.5K^0.3?

Does this production function,q = 10L^0.5K^0.3,experience increasing,decreasing or constant returns to scale?

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

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

Which entity produces the greatest proportion of U.S.gross national product?

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

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

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

What is the MRTS for a firm with the following production function,q = 10L0.5K0.3?

Does this production function,q = 10L0.5K0.3,experience increasing,decreasing or constant returns to scale?

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

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

Which entity produces the greatest proportion of U.S.gross national product?

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

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

What is the MRTS for a firm with the following production function,q = 10L^0.5K^0.3?

Does this production function,q = 10L^0.5K^0.3,experience increasing,decreasing or constant returns to scale?