Question 1

The production function q =

Accepted Answer

A)  exhibits constant returns to scale and constant marginal productivities for K and L. 
B)  exhibits diminishing returns to scale and diminishing marginal productivities for K and L. 
C)  exhibits constant returns to scale and diminishing marginal productivities for K and L. 
D)  exhibits diminishing returns to scale and constant marginal productivities for K and L. 
A)  exhibits constant returns to scale and constant marginal productivities for K and L. 
B)  exhibits diminishing returns to scale and diminishing marginal productivities for K and L. 
C)  exhibits constant returns to scale and diminishing marginal productivities for K and L. 
D)  exhibits diminishing returns to scale and constant marginal productivities for K and L. C

Question 2

A firm is defined as

Accepted Answer

A)  a president, some vice presidents, and some employees. 
B)  any organization that wants to make a profit. 
C)  any accumulation of productive assets. 
D)  any organization that turns inputs into outputs. 
A)  a president, some vice presidents, and some employees. 
B)  any organization that wants to make a profit. 
C)  any accumulation of productive assets. 
D)  any organization that turns inputs into outputs. D

Question 3

If production is given by Q = K$\alpha$LB,($\alpha$+ B < 1)doubling both inputs

Accepted Answer

A)  more than doubles output. 
B)  exactly doubles output. 
C)  increases output but does not double it. 
D)  leaves output unchanged. 
A)  more than doubles output. 
B)  exactly doubles output. 
C)  increases output but does not double it. 
D)  leaves output unchanged. C

Question 4

Graphically,the average productivity of labor would be illustrated by

Accepted Answer

A)  the slope of the total product curve at the relevant point. 
B)  the slope of the marginal productivity curve at the relevant point. 
C)  the negative of the slope of the marginal productivity curve at the relevant point. 
D)  the slope of the chord connecting the origin with the relevant point on the total output curve. 
A)  the slope of the total product curve at the relevant point. 
B)  the slope of the marginal productivity curve at the relevant point. 
C)  the negative of the slope of the marginal productivity curve at the relevant point. 
D)  the slope of the chord connecting the origin with the relevant point on the total output curve.

Question 5

For a fixed proportion production function,at the vertex of any of the (L-shaped)isoquants the marginal productivity of either input is

Accepted Answer

A)  constant 
B)  zero. 
C)  negative. 
D)  a value that cannot be determined. 
A)  constant 
B)  zero. 
C)  negative. 
D)  a value that cannot be determined.

Question 6

The marginal physical product of labor is

Accepted Answer

A)  the slope of the total output curve at the relevant point. 
B)  the negative of the slope of the total output curve at the relevant point. 
C)  the slope of the line connecting the origin with the relevant point on the total output curve. 
D)  the negative of the slope of the line connecting the origin with the relevant point on the total output curve. 
A)  the slope of the total output curve at the relevant point. 
B)  the negative of the slope of the total output curve at the relevant point. 
C)  the slope of the line connecting the origin with the relevant point on the total output curve. 
D)  the negative of the slope of the line connecting the origin with the relevant point on the total output curve.

Question 7

The marginal physical product of labor is defined as

Accepted Answer

A)  a firm's total output divided by total labor input. 
B)  the extra output produced by employing one more unit of labor while allowing other inputs to vary. 
C)  the extra output produced by employing one more unit of labor while holding other inputs constant. 
D)  the extra output produced by employing one more unit of capital while holding labor input constant. 
A)  a firm's total output divided by total labor input. 
B)  the extra output produced by employing one more unit of labor while allowing other inputs to vary. 
C)  the extra output produced by employing one more unit of labor while holding other inputs constant. 
D)  the extra output produced by employing one more unit of capital while holding labor input constant.

Question 8

A production function measures how

Accepted Answer

A)  a firm transforms output into input. 
B)  a firm transforms inputs into output. 
C)  an individual maximizes utility. 
D)  a firm minimizes cost. 
A)  a firm transforms output into input. 
B)  a firm transforms inputs into output. 
C)  an individual maximizes utility. 
D)  a firm minimizes cost.

Question 9

If production is given by Q = KL,doubling both inputs

Accepted Answer

A)  more than doubles output. 
B)  exactly doubles output. 
C)  increases output but does not double it. 
D)  leaves output unchanged. 
A)  more than doubles output. 
B)  exactly doubles output. 
C)  increases output but does not double it. 
D)  leaves output unchanged.

Question 10

A technical innovation in the production of automobiles by Ford Motor Company's for 1 million cars per year would necessarily

Accepted Answer

A)  shift the "1 million car" isoquant away from the origin. 
B)  shift the "1 million car" isoquant toward the origin. 
C)  cause 1 million cars to be produced with more capital and less labor. 
D)  cause 1 million cars to be produced with more labor and less capital. 
A)  shift the "1 million car" isoquant away from the origin. 
B)  shift the "1 million car" isoquant toward the origin. 
C)  cause 1 million cars to be produced with more capital and less labor. 
D)  cause 1 million cars to be produced with more labor and less capital.

Question 11

A firm's isoquant shows

Accepted Answer

A)  the amount of labor needed to produce a given level of output with capital held constant. 
B)  the amount of capital needed to produce a given level of output with labor held constant. 
C)  the various combinations of capital and labor that will produce a given amount of output. 
D)  None of these. 
A)  the amount of labor needed to produce a given level of output with capital held constant. 
B)  the amount of capital needed to produce a given level of output with labor held constant. 
C)  the various combinations of capital and labor that will produce a given amount of output. 
D)  None of these.

Question 12

If Q = K2L2 the MPK is

Accepted Answer

A)  constant 
B)  diminishing 
C)  increasing 
D)  not enough information to determine 
A)  constant 
B)  diminishing 
C)  increasing 
D)  not enough information to determine

Question 13

A fixed-proportion production function has isoquants that are

Accepted Answer

A)  almost flat (i.e., the isoquants are almost straight lines). 
B)  L-shaped. 
C)  normally shaped (rectangular hyperbolas). 
D)  None of these. 
A)  almost flat (i.e., the isoquants are almost straight lines). 
B)  L-shaped. 
C)  normally shaped (rectangular hyperbolas). 
D)  None of these.

Question 14

Suppose Q = K$\alpha$  L$\beta$,if $\alpha$ + $\beta$< 1 the isoquants will be

Accepted Answer

A)  upward sloping. 
B)  progressively closer together at higher quantities. 
C)  progressively further apart at higher quantities. 
D)  equally spaced. 
A)  upward sloping. 
B)  progressively closer together at higher quantities. 
C)  progressively further apart at higher quantities. 
D)  equally spaced.

Question 15

Suppose the production function for good q is given by q = 3K + 2 L where K and L are capital and labor inputs.Consider three statements about this function:
I.The function exhibits constant returns to scale.
II.The function exhibits diminishing marginal productivities to all inputs.
III.The function has a constant rate of technical substitution.
Which of these statements is true?

Accepted Answer

A)  All of them. 
B)  Only I. 
C)  I and II but not III. 
D)  I and III but not II. 
A)  All of them. 
B)  Only I. 
C)  I and II but not III. 
D)  I and III but not II.

Question 16

If Q = K2L2 the MPL is

Accepted Answer

A)  constant 
B)  diminishing 
C)  increasing 
D)  not enough information to determine 
A)  constant 
B)  diminishing 
C)  increasing 
D)  not enough information to determine

Question 17

Suppose Q = K$\alpha$L$\beta$,if $\alpha$ + $\beta$ > 1 the isoquants will be

Accepted Answer

A)  upward sloping. 
B)  progressively closer together at higher quantities. 
C)  progressively further apart at higher quantities. 
D)  equally spaced. 
A)  upward sloping. 
B)  progressively closer together at higher quantities. 
C)  progressively further apart at higher quantities. 
D)  equally spaced.

Question 18

If Q = K1/2L1/2 the MPL is

Accepted Answer

A)  constant 
B)  increasing 
C)  diminishing 
D)  not enough information to determine 
A)  constant 
B)  increasing 
C)  diminishing 
D)  not enough information to determine

Question 19

Suppose electricity (E)can be produced with coal (C)or gas (G)to operate steam turbines (T).Suppose gas is more efficiently burned than coal but that they are otherwise perfect substitutes.E = ((G + 1/2C),T)The isoquants between gas and coal will be

Accepted Answer

A)  hyperbolas 
B)  quarter circles 
C)  straight lines 
D)  rectangular 
A)  hyperbolas 
B)  quarter circles 
C)  straight lines 
D)  rectangular

Question 20

A rise in the average productivity of labor

Accepted Answer

A)  always reflects technical progress. 
B)  reflects technical progress if other input usage hasn't changed. 
C)  reflects technical progress only if labor input hasn't changed. 
D)  reflects technical progress only if the quantity of output is increased. 
A)  always reflects technical progress. 
B)  reflects technical progress if other input usage hasn't changed. 
C)  reflects technical progress only if labor input hasn't changed. 
D)  reflects technical progress only if the quantity of output is increased.

The production function q =

A firm is defined as

If production is given by Q = K^$\alpha$L^B,( $\alpha$ + B < 1)doubling both inputs

Graphically,the average productivity of labor would be illustrated by

For a fixed proportion production function,at the vertex of any of the (L-shaped)isoquants the marginal productivity of either input is

The marginal physical product of labor is

The marginal physical product of labor is defined as

A production function measures how

If production is given by Q = KL,doubling both inputs

A technical innovation in the production of automobiles by Ford Motor Company's for 1 million cars per year would necessarily

A firm's isoquant shows

If Q = K²L² the MP_K is

A fixed-proportion production function has isoquants that are

Suppose Q = K^$\alpha$ L^$\beta$,if $\alpha$ + $\beta$ < 1 the isoquants will be

If Q = K²L² the MP_L is

Suppose Q = K^$\alpha$L^$\beta$,if $\alpha$ + $\beta$ > 1 the isoquants will be

If Q = K^1/2L^1/2 the MP_L is

Suppose electricity (E)can be produced with coal (C)or gas (G)to operate steam turbines (T).Suppose gas is more efficiently burned than coal but that they are otherwise perfect substitutes.E = ((G + 1/2C),T)The isoquants between gas and coal will be

A rise in the average productivity of labor

Economic Models

Utility and Choice

Individual Demand Curves

Uncertainty

Game Theory

Costs

Profit Maximization and Supply

Perfect Competition in a Single Market

General Equilibrium and Welfare

Monopoly

Imperfect Competition

Pricing in Input Markets

Capital and Time

Asymmetric Information

Externalities and Public Goods

Behavioral Economics

Filters

Exam 6: Production

The production function q =

A firm is defined as

If production is given by Q = K α\alphaα LB,( α\alphaα + B < 1)doubling both inputs

Graphically,the average productivity of labor would be illustrated by

For a fixed proportion production function,at the vertex of any of the (L-shaped)isoquants the marginal productivity of either input is

The marginal physical product of labor is

The marginal physical product of labor is defined as

A production function measures how

If production is given by Q = KL,doubling both inputs

A technical innovation in the production of automobiles by Ford Motor Company's for 1 million cars per year would necessarily

A firm's isoquant shows

If Q = K2L2 the MPK is

A fixed-proportion production function has isoquants that are

Suppose Q = K α\alphaα L β\betaβ ,if α\alphaα + β\betaβ < 1 the isoquants will be

If Q = K2L2 the MPL is

Suppose Q = K α\alphaα L β\betaβ ,if α\alphaα + β\betaβ > 1 the isoquants will be

If Q = K1/2L1/2 the MPL is

Suppose electricity (E)can be produced with coal (C)or gas (G)to operate steam turbines (T).Suppose gas is more efficiently burned than coal but that they are otherwise perfect substitutes.E = ((G + 1/2C),T)The isoquants between gas and coal will be

A rise in the average productivity of labor

Economic Models

Utility and Choice

Individual Demand Curves

Uncertainty

Game Theory

Costs

Profit Maximization and Supply

Perfect Competition in a Single Market

General Equilibrium and Welfare

Monopoly

Imperfect Competition

Pricing in Input Markets

Capital and Time

Asymmetric Information

Externalities and Public Goods

Behavioral Economics

Filters

If production is given by Q = K^$\alpha$L^B,( $\alpha$ + B < 1)doubling both inputs

If Q = K²L² the MP_K is

Suppose Q = K^$\alpha$ L^$\beta$,if $\alpha$ + $\beta$ < 1 the isoquants will be

If Q = K²L² the MP_L is

Suppose Q = K^$\alpha$L^$\beta$,if $\alpha$ + $\beta$ > 1 the isoquants will be

If Q = K^1/2L^1/2 the MP_L is