Question 1

For the cost function C(Q) = 50 + 4Q + 2Q2, the total variable cost of producing 7 units of output is

Accepted Answer

A) 32. 
B) 102. 
C) 126. 
D) none of the statements associated with this question are correct. 
A) 32. 
B) 102. 
C) 126. 
D) none of the statements associated with this question are correct.

Question 2

The production function in the above table exhibits negative marginal returns to capital over what output range?

Accepted Answer

A) Between 0 and 1,524. 
B) Between 0 and 2,991. 
C) Between 2,391 and 3,048. 
D) Between 3,016 and 2,945. 
A) Between 0 and 1,524. 
B) Between 0 and 2,991. 
C) Between 2,391 and 3,048. 
D) Between 3,016 and 2,945.

Question 3

Standard Enterprises produces an output that it sells in a highly competitive market at a price of $100 per unit.Its inputs include two machines (which cost the firm $50 each) and workers, who can be hired on an as-needed basis in a labor market at a cost of $2,800 per worker.Based on the following production data, how many workers should the firm employ to maximize its profits?

Accepted Answer

@#IMG-DLM& The relevant production data is as foll

Question 4

Suppose the production function is Q = min {K, 2L}.How much output is produced when 4 units of labor and 9 units of capital are employed?

Accepted Answer

A) 2. 
B) 4. 
C) 8. 
D) 9. 
A) 2. 
B) 4. 
C) 8. 
D) 9.

Question 5

Which of the following profit functions exhibits a Cobb-Douglas production function?

Accepted Answer

A) $\pi$  = P x K0.75L0.50 - 20L - 35K. 
B) $\pi$  = P x min(2L, 5K) - 20L - 35K. 
C) $\pi$  = P x (3K + 4L) - 20L - 35K. 
D) $\pi$  = P x (3K0.5 + 4L0.5) 1/0.2 - 20L - 35K. 
A) $\pi$  = P x K0.75L0.50 - 20L - 35K. 
B) $\pi$  = P x min(2L, 5K) - 20L - 35K. 
C) $\pi$  = P x (3K + 4L) - 20L - 35K. 
D) $\pi$  = P x (3K0.5 + 4L0.5) 1/0.2 - 20L - 35K.

Question 6

Which of the following relations is the slope along a given isoquant?

Accepted Answer

A) dQ = {$\partial$(K,L) / $\partial$K} dK + {$\partial$F(K,L) / $\partial$L} dL, where dQ > 0. 
B) 0 = {$\partial$F(K,L) / $\partial$L} dK + {$\partial$F(K,L) / $\partial$K} dL. 
C) 0 = {$\partial$F(K,L) / $\partial$K} dK + {$\partial$F(K,L) / $\partial$L} dL. 
D) dQ = {$\partial$F(K,L) / $\partial$K} dL + {$\partial$F(K,L) / $\partial$L} dK, where dQ > 0. 
A) dQ = {$\partial$(K,L) / $\partial$K} dK + {$\partial$F(K,L) / $\partial$L} dL, where dQ > 0. 
B) 0 = {$\partial$F(K,L) / $\partial$L} dK + {$\partial$F(K,L) / $\partial$K} dL. 
C) 0 = {$\partial$F(K,L) / $\partial$K} dK + {$\partial$F(K,L) / $\partial$L} dL. 
D) dQ = {$\partial$F(K,L) / $\partial$K} dL + {$\partial$F(K,L) / $\partial$L} dK, where dQ > 0.

Question 7

Suppose that production for good X is characterized by the following production function, Q = K0.5L0.5, where K is the fixed input in the short run.If the per-unit rental rate of capital, r, is $25 and the per-unit wage, w, is $15, then the average total cost of using 81 units of capital and 9 units of labor is

Accepted Answer

A) $5. 
B) $75. 
C) $80. 
D) there is insufficient information to determine the average total costs. 
A) $5. 
B) $75. 
C) $80. 
D) there is insufficient information to determine the average total costs.

Question 8

The Cobb-Douglas production function is

Accepted Answer

A) Q = aK + bL. 
B) Q = min {bK, cL}. 
C) Q = max {bK, cL}. 
D) Q = KaLb. 
A) Q = aK + bL. 
B) Q = min {bK, cL}. 
C) Q = max {bK, cL}. 
D) Q = KaLb.

Question 9

For the cost function C(Q) = 100 + 2Q + 3Q2, the marginal cost of producing 2 units of output is

Accepted Answer

A) 2. 
B) 3. 
C) 12. 
D) 14. 
A) 2. 
B) 3. 
C) 12. 
D) 14.

Question 10

Given the following table, how many workers should be hired to maximize profits?

Accepted Answer

A) 1. 
B) 2. 
C) 3. 
D) 4. 
A) 1. 
B) 2. 
C) 3. 
D) 4.

Question 11

Suppose the marginal product of labor is 8 and the marginal product of capital is 2.If the wage rate is $4 and the price of capital is $2, then in order to minimize costs the firm should use

Accepted Answer

A) more capital and less labor. 
B) more labor and less capital. 
C) three times more capital than labor. 
D) none of the statements associated with this question are correct. 
A) more capital and less labor. 
B) more labor and less capital. 
C) three times more capital than labor. 
D) none of the statements associated with this question are correct.

Question 12

Suppose the marginal product of labor is 10 and the marginal product of capital is 8.If the wage rate is $5 and the price of capital is $2, then in order to minimize costs the firm should use

Accepted Answer

A) more capital and less labor. 
B) more labor and less capital. 
C) equal amounts of labor and capital. 
D) none of the statements associated with this question are correct. 
A) more capital and less labor. 
B) more labor and less capital. 
C) equal amounts of labor and capital. 
D) none of the statements associated with this question are correct.

Question 13

As long as marginal product is increasing, marginal product is

Accepted Answer

A) less than average product. 
B) greater than average product. 
C) equal to average output. 
D) equal to total product. 
A) less than average product. 
B) greater than average product. 
C) equal to average output. 
D) equal to total product.

Question 14

If the production function is Q = K.5L.5 and capital is fixed at 1 unit, then the average product of labor when L = 36 is

Accepted Answer

A) 1/3. 
B) 1/6. 
C) 2/3. 
D) none of the statements associated with this question are correct. 
A) 1/3. 
B) 1/6. 
C) 2/3. 
D) none of the statements associated with this question are correct.

Question 15

Whenever an isoquant exhibits a diminishing marginal rate of technical substitution, the corresponding isoquants are

Accepted Answer

A) convex to the origin. 
B) concave to the origin. 
C) L-shaped. 
D) linear. 
A) convex to the origin. 
B) concave to the origin. 
C) L-shaped. 
D) linear.

Question 16

Suppose the production function is given by Q = K1/2L1/2, and that Q = 30 and K = 25.How much labor is employed by the firm?

Accepted Answer

A) 49. 
B) 6. 
C) 36. 
D) 25. 
A) 49. 
B) 6. 
C) 36. 
D) 25.

Question 17

Which of the following cost functions exhibits economies of scope over the specified output range?

Accepted Answer

A) C(Q1,Q2) = 2 - 0.5Q1Q2 - (Q1)2 + (Q2)2, for all Q1 > 0 and Q2 > 0. 
B) C(Q1,Q2) = 2 - 3Q1Q2 - (Q1)2 + (Q2)2, for all Q1 > 0 and Q2 > 0. 
C) C(Q1,Q2) = 2 - 0.5Q1Q2 - (Q1)2 + (Q2)2, for all Q1 2 1,Q2) = 2 - 3Q1Q2 - (Q1)2 + (Q2)2, for all Q1 > 4 and Q2 > 4. 
A) C(Q1,Q2) = 2 - 0.5Q1Q2 - (Q1)2 + (Q2)2, for all Q1 > 0 and Q2 > 0. 
B) C(Q1,Q2) = 2 - 3Q1Q2 - (Q1)2 + (Q2)2, for all Q1 > 0 and Q2 > 0. 
C) C(Q1,Q2) = 2 - 0.5Q1Q2 - (Q1)2 + (Q2)2, for all Q1 2 1,Q2) = 2 - 3Q1Q2 - (Q1)2 + (Q2)2, for all Q1 > 4 and Q2 > 4.

Question 18

What is the average variable cost of producing 50 units of output?

Accepted Answer

A) 21. 
B) 34. 
C) 14. 
D) 20. 
A) 21. 
B) 34. 
C) 14. 
D) 20.

Question 19

The value of marginal product of an input is the value of the

Accepted Answer

A) total output produced by total inputs. 
B) average output produced by inputs. 
C) output produced by the last unit of an input. 
D) output produced by the first unit of an input. 
A) total output produced by total inputs. 
B) average output produced by inputs. 
C) output produced by the last unit of an input. 
D) output produced by the first unit of an input.

Question 20

If a firm's production function is Leontief and the price of capital goes down the

Accepted Answer

A) firm must use less labor in order to minimize the cost of producing a given level of output. 
B) firm must use more capital in order to minimize the cost of producing a given level of output. 
C) firm must use less capital in order to minimize the cost of producing a given level of output. 
D) cost minimizing combination of capital and labor does not change. 
A) firm must use less labor in order to minimize the cost of producing a given level of output. 
B) firm must use more capital in order to minimize the cost of producing a given level of output. 
C) firm must use less capital in order to minimize the cost of producing a given level of output. 
D) cost minimizing combination of capital and labor does not change.

For the cost function C(Q) = 50 + 4Q + 2Q², the total variable cost of producing 7 units of output is

The production function in the above table exhibits negative marginal returns to capital over what output range?

Suppose the production function is Q = min {K, 2L}.How much output is produced when 4 units of labor and 9 units of capital are employed?

Which of the following profit functions exhibits a Cobb-Douglas production function?

Which of the following relations is the slope along a given isoquant?

The Cobb-Douglas production function is

For the cost function C(Q) = 100 + 2Q + 3Q², the marginal cost of producing 2 units of output is

Given the following table, how many workers should be hired to maximize profits?

Suppose the marginal product of labor is 8 and the marginal product of capital is 2.If the wage rate is $4 and the price of capital is $2, then in order to minimize costs the firm should use

Suppose the marginal product of labor is 10 and the marginal product of capital is 8.If the wage rate is $5 and the price of capital is $2, then in order to minimize costs the firm should use

As long as marginal product is increasing, marginal product is

If the production function is Q = K^.5L^.5 and capital is fixed at 1 unit, then the average product of labor when L = 36 is

Whenever an isoquant exhibits a diminishing marginal rate of technical substitution, the corresponding isoquants are

Suppose the production function is given by Q = K^1/2L^1/2, and that Q = 30 and K = 25.How much labor is employed by the firm?

Which of the following cost functions exhibits economies of scope over the specified output range?

What is the average variable cost of producing 50 units of output?

The value of marginal product of an input is the value of the

If a firm's production function is Leontief and the price of capital goes down the

The Fundamentals of Managerial Economics

Market Forces: Demand and Supply

Quantitative Demand Analysis

The Theory of Individual Behavior

The Organization of the Firm

The Nature of Industry

Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets

Basic Oligopoly Models

Game Theory: Inside Oligopoly

Pricing Strategies for Firms With Market Power

The Economics of Information

Advanced Topics in Business Strategy

A Managers Guide to Government in the Marketplace

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Exam 5: The Production Process and Costs

For the cost function C(Q) = 50 + 4Q + 2Q2, the total variable cost of producing 7 units of output is

The production function in the above table exhibits negative marginal returns to capital over what output range?

Suppose the production function is Q = min {K, 2L}.How much output is produced when 4 units of labor and 9 units of capital are employed?

Which of the following profit functions exhibits a Cobb-Douglas production function?

Which of the following relations is the slope along a given isoquant?

The Cobb-Douglas production function is

For the cost function C(Q) = 100 + 2Q + 3Q2, the marginal cost of producing 2 units of output is

Given the following table, how many workers should be hired to maximize profits?

Suppose the marginal product of labor is 8 and the marginal product of capital is 2.If the wage rate is $4 and the price of capital is $2, then in order to minimize costs the firm should use

Suppose the marginal product of labor is 10 and the marginal product of capital is 8.If the wage rate is $5 and the price of capital is $2, then in order to minimize costs the firm should use

As long as marginal product is increasing, marginal product is

If the production function is Q = K.5L.5 and capital is fixed at 1 unit, then the average product of labor when L = 36 is

Whenever an isoquant exhibits a diminishing marginal rate of technical substitution, the corresponding isoquants are

Suppose the production function is given by Q = K1/2L1/2, and that Q = 30 and K = 25.How much labor is employed by the firm?

Which of the following cost functions exhibits economies of scope over the specified output range?

What is the average variable cost of producing 50 units of output?

The value of marginal product of an input is the value of the

If a firm's production function is Leontief and the price of capital goes down the

The Fundamentals of Managerial Economics

Market Forces: Demand and Supply

Quantitative Demand Analysis

The Theory of Individual Behavior

The Organization of the Firm

The Nature of Industry

Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets

Basic Oligopoly Models

Game Theory: Inside Oligopoly

Pricing Strategies for Firms With Market Power

The Economics of Information

Advanced Topics in Business Strategy

A Managers Guide to Government in the Marketplace

Filters

For the cost function C(Q) = 50 + 4Q + 2Q², the total variable cost of producing 7 units of output is

For the cost function C(Q) = 100 + 2Q + 3Q², the marginal cost of producing 2 units of output is

If the production function is Q = K^.5L^.5 and capital is fixed at 1 unit, then the average product of labor when L = 36 is

Suppose the production function is given by Q = K^1/2L^1/2, and that Q = 30 and K = 25.How much labor is employed by the firm?