Question 1

When isoquants get progressively further apart there is

Accepted Answer

A)  increasing returns to scale 
B)  decreasing returns to scale 
C)  constant returns to scale 
D)  not enough information to determine 
A)  increasing returns to scale 
B)  decreasing returns to scale 
C)  constant returns to scale 
D)  not enough information to determine

Question 2

A firm's rate of technical substitution is represented graphically by

Accepted Answer

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

Question 3

If Q = K1/2L1/2 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 4

The average productivity of capital is defined as

Accepted Answer

A)  the extra output produced by employing one more unit of capital while holding other inputs constant. 
B)  the extra output produced by employing one more unit of capital while allowing other inputs to vary. 
C)  the ratio of total output produced to the quantity of capital employed. 
D)  the ratio of total capital employed to the total output produced. 
A)  the extra output produced by employing one more unit of capital while holding other inputs constant. 
B)  the extra output produced by employing one more unit of capital while allowing other inputs to vary. 
C)  the ratio of total output produced to the quantity of capital employed. 
D)  the ratio of total capital employed to the total output produced.

Question 5

When isoquants get progressively closer together there is

Accepted Answer

A)  increasing returns to scale 
B)  decreasing returns to scale 
C)  constant returns to scale 
D)  not enough information to determine 
A)  increasing returns to scale 
B)  decreasing returns to scale 
C)  constant returns to scale 
D)  not enough information to determine

Question 6

The marginal rate of technical substitution of labor for capital measures

Accepted Answer

A)  the amount by which capital input can be reduced while holding quantity produced constant when one more unit of labor is used. 
B)  the amount by which labor input can be reduced while holding quantity produced constant when one more unit of capital is used. 
C)  the ratio of total labor to total capital. 
D)  the ratio of total capital to total labor. 
A)  the amount by which capital input can be reduced while holding quantity produced constant when one more unit of labor is used. 
B)  the amount by which labor input can be reduced while holding quantity produced constant when one more unit of capital is used. 
C)  the ratio of total labor to total capital. 
D)  the ratio of total capital to total labor.

Question 7

A production function may exhibit

Accepted Answer

A)  constant returns to scale and diminishing marginal productivities to all inputs. 
B)  constant returns to scale and diminishing marginal productivities to all but one input, but at least one input must have a constant marginal productivity. 
C)  constant returns to scale and diminishing marginal productivity to at most one input. 
D)  constant returns to scale and diminishing marginal productivities for no inputs. 
A)  constant returns to scale and diminishing marginal productivities to all inputs. 
B)  constant returns to scale and diminishing marginal productivities to all but one input, but at least one input must have a constant marginal productivity. 
C)  constant returns to scale and diminishing marginal productivity to at most one input. 
D)  constant returns to scale and diminishing marginal productivities for no inputs.

Question 8

If more and more labor is employed while keeping all other inputs constant,the marginal physical productivity of labor

Accepted Answer

A)  will eventually increase. 
B)  will eventually decrease. 
C)  will eventually remain constant. 
D)  cannot tell from the information provided. 
A)  will eventually increase. 
B)  will eventually decrease. 
C)  will eventually remain constant. 
D)  cannot tell from the information provided.

Question 9

As a result of doubling all its inputs,if a firm can more than double its output,its production function exhibits

Accepted Answer

A)  constant returns to scale. 
B)  increasing returns to scale. 
C)  decreasing returns to scale. 
D)  increasing marginal productivity to at least one input. 
A)  constant returns to scale. 
B)  increasing returns to scale. 
C)  decreasing returns to scale. 
D)  increasing marginal productivity to at least one input.

Question 10

If Q = K1/3L2 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 11

If Q = K1/3L2 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 12

In a two-input model you can tell that a non-optimal short-run production decision is being made if

Accepted Answer

A)  all decisions in the short run are nonoptimal 
B)  all decisions in the short run are optimal 
C)  the rate of technical substitution is equal to the ratio of the input prices 
D)  the rate of technical substitution is not equal to the ratio of the input prices 
A)  all decisions in the short run are nonoptimal 
B)  all decisions in the short run are optimal 
C)  the rate of technical substitution is equal to the ratio of the input prices 
D)  the rate of technical substitution is not equal to the ratio of the input prices

When isoquants get progressively further apart there is

A firm's rate of technical substitution is represented graphically by

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

The average productivity of capital is defined as

When isoquants get progressively closer together there is

The marginal rate of technical substitution of labor for capital measures

A production function may exhibit

If more and more labor is employed while keeping all other inputs constant,the marginal physical productivity of labor

As a result of doubling all its inputs,if a firm can more than double its output,its production function exhibits

If Q = K^1/3L² the MP_L is

If Q = K^1/3L² the MP_K is

In a two-input model you can tell that a non-optimal short-run production decision is being made if

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

When isoquants get progressively further apart there is

A firm's rate of technical substitution is represented graphically by

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

The average productivity of capital is defined as

When isoquants get progressively closer together there is

The marginal rate of technical substitution of labor for capital measures

A production function may exhibit

If more and more labor is employed while keeping all other inputs constant,the marginal physical productivity of labor

As a result of doubling all its inputs,if a firm can more than double its output,its production function exhibits

If Q = K1/3L2 the MPL is

If Q = K1/3L2 the MPK is

In a two-input model you can tell that a non-optimal short-run production decision is being made if

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 Q = K^1/2L^1/2 the MP_K is

If Q = K^1/3L² the MP_L is

If Q = K^1/3L² the MP_K is