Question 1

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 2

The slope of the total product curve always equals

Accepted Answer

A)  the ratio of the marginal product and the average product. 
B)  the change in input divided by the change in output. 
C)  the average product of the input. 
D)  the marginal product of the input. 
A)  the ratio of the marginal product and the average product. 
B)  the change in input divided by the change in output. 
C)  the average product of the input. 
D)  the marginal product of the input.

Question 3

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 4

-Which graph in the above figure represents the isoquants where,as the amount of labor used increases and the amount of capital used decreases,the marginal product of labor rises 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 5

If a technological change occurs such that the production function shifts from q = 10K0.5 L0.5 to q = 10.5K0.3 L0.5,then the technological change is

Accepted Answer

A)  both neutral and non-neutral. 
B)  neutral. 
C)  non-neutral. 
D)  Not enough information given. 
A)  both neutral and non-neutral. 
B)  neutral. 
C)  non-neutral. 
D)  Not enough information given.

Question 6

Suppose the production of mp3 players can be represented by the following production function: q = L0.4K0.4. The firm currently produces q1 units.If all inputs doubled,the new level of output will equal

Accepted Answer

A)  20.4 q1. 
B)  20.8 q1. 
C)  0.8 q1. 
D)  1.6 q1. 
A)  20.4 q1. 
B)  20.8 q1. 
C)  0.8 q1. 
D)  1.6 q1.

Question 7

Describe the relationship between marginal productivity and average productivity.Use calculus or a graph to support your answer.

Accepted Answer

AP = Q(L)/L.dAP/dL = ([L ∗ MP]

Question 8

Efficient production occurs if a firm

Accepted Answer

A)  cannot produce its current level of output with fewer inputs. 
B)  given the quantity of inputs, cannot produce more output. 
C)  maximizes profit. 
D)  All of the above. 
A)  cannot produce its current level of output with fewer inputs. 
B)  given the quantity of inputs, cannot produce more output. 
C)  maximizes profit. 
D)  All of the above.

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

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.

Question 11

Explain why labor might not always be a variable input.

Accepted Answer

In the real world,units of labor are not

Question 12

-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 13

Technological efficiency is

Accepted Answer

A)  a necessary and sufficient condition for profit maximization. 
B)  a sufficient but not necessary condition for profit maximization. 
C)  a necessary but not sufficient condition for profit maximization. 
D)  a theoretical construct with little connection to the real world. 
A)  a necessary and sufficient condition for profit maximization. 
B)  a sufficient but not necessary condition for profit maximization. 
C)  a necessary but not sufficient condition for profit maximization. 
D)  a theoretical construct with little connection to the real world.

Question 14

An organization that converts inputs (like Labor,Capital etc.)into output can be a

Accepted Answer

A)  firm. 
B)  sole proprietorship. 
C)  corporation. 
D)  All of the above. 
A)  firm. 
B)  sole proprietorship. 
C)  corporation. 
D)  All of the above.

Question 15

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 16

If a farmer produces 1000 bushels of corn using ten acres of land and one tractor and is able to produce 2000 bushels of corn using twenty acres of land and one tractor,the farmer has

Accepted Answer

A)  increasing returns to scale. 
B)  constant returns to scale. 
C)  decreasing returns to scale. 
D)  no returns to scale. 
A)  increasing returns to scale. 
B)  constant returns to scale. 
C)  decreasing returns to scale. 
D)  no returns to scale.

Question 17

Suppose the production function for T-shirts can be represented as q = L0.25K0.75.When K = 1 and
q = 2,what is the slope of the isoquant? If there is insufficient information to answer the question,describe what information is needed.

Accepted Answer

Since the slope of the isoquan

Question 18

Let the production function be q = ALaKb.Returns to scale are equal to

Accepted Answer

A)  a ∗ b. 
B)  a + b. 
C)  La + Kb. 
D)  A ∗ L. 
A)  a ∗ b. 
B)  a + b. 
C)  La + Kb. 
D)  A ∗ L.

Question 19

Explain how firms that each produce as efficiently as they can may not be equally productive.

Accepted Answer

Firm-specific characteristics

Question 20

Unlike indifference curves,isoquants can intersect.

Accepted Answer

A) True 
 B)False

In the long run,all factors of production are

The slope of the total product curve always equals

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

-Which graph in the above figure represents the isoquants where,as the amount of labor used increases and the amount of capital used decreases,the marginal product of labor rises when capital per day is on the vertical axis and labor per day is on the horizontal axis?

If a technological change occurs such that the production function shifts from q = 10K^0.5 L^0.5 to q = 10.5K^0.3 L^0.5,then the technological change is

Suppose the production of mp3 players can be represented by the following production function: q = L^0.4K^0.4.The firm currently produces q₁ units.If all inputs doubled,the new level of output will equal

Describe the relationship between marginal productivity and average productivity.Use calculus or a graph to support your answer.

Efficient production occurs if a firm

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

Explain why labor might not always be a variable input.

-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?

Technological efficiency is

An organization that converts inputs (like Labor,Capital etc.)into output can be a

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

If a farmer produces 1000 bushels of corn using ten acres of land and one tractor and is able to produce 2000 bushels of corn using twenty acres of land and one tractor,the farmer has

Suppose the production function for T-shirts can be represented as q = L^0.25K^0.75.When K = 1 and q = 2,what is the slope of the isoquant? If there is insufficient information to answer the question,describe what information is needed.

Let the production function be q = AL^aK^b.Returns to scale are equal to

Explain how firms that each produce as efficiently as they can may not be equally productive.

Unlike indifference curves,isoquants can intersect.

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

In the long run,all factors of production are

The slope of the total product curve always equals

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

-Which graph in the above figure represents the isoquants where,as the amount of labor used increases and the amount of capital used decreases,the marginal product of labor rises when capital per day is on the vertical axis and labor per day is on the horizontal axis?

If a technological change occurs such that the production function shifts from q = 10K0.5 L0.5 to q = 10.5K0.3 L0.5,then the technological change is

Suppose the production of mp3 players can be represented by the following production function: q = L0.4K0.4. The firm currently produces q1 units.If all inputs doubled,the new level of output will equal

Describe the relationship between marginal productivity and average productivity.Use calculus or a graph to support your answer.

Efficient production occurs if a firm

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

Explain why labor might not always be a variable input.

-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?

Technological efficiency is

An organization that converts inputs (like Labor,Capital etc.)into output can be a

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

If a farmer produces 1000 bushels of corn using ten acres of land and one tractor and is able to produce 2000 bushels of corn using twenty acres of land and one tractor,the farmer has

Suppose the production function for T-shirts can be represented as q = L0.25K0.75.When K = 1 and q = 2,what is the slope of the isoquant? If there is insufficient information to answer the question,describe what information is needed.

Let the production function be q = ALaKb.Returns to scale are equal to

Explain how firms that each produce as efficiently as they can may not be equally productive.

Unlike indifference curves,isoquants can intersect.

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?

If a technological change occurs such that the production function shifts from q = 10K^0.5 L^0.5 to q = 10.5K^0.3 L^0.5,then the technological change is

Suppose the production of mp3 players can be represented by the following production function: q = L^0.4K^0.4.The firm currently produces q₁ units.If all inputs doubled,the new level of output will equal

Suppose the production function for T-shirts can be represented as q = L^0.25K^0.75.When K = 1 and q = 2,what is the slope of the isoquant? If there is insufficient information to answer the question,describe what information is needed.

Let the production function be q = AL^aK^b.Returns to scale are equal to