Question 1

In the short run, the marginal cost curve crosses the average total cost curve at

Accepted Answer

A) a point just below the average fixed cost curve. 
B) the minimum point of the average total cost curve. 
C) the maximum point of the average total cost curve. 
D) the point where the average total cost curve and average variable cost curve intersect. 
A) a point just below the average fixed cost curve. 
B) the minimum point of the average total cost curve. 
C) the maximum point of the average total cost curve. 
D) the point where the average total cost curve and average variable cost curve intersect.

Question 2

The production function Q = L.5K.5 is called

Accepted Answer

A) Cobb Douglas. 
B) Leontief. 
C) Linear. 
D) none of the statements associated with this question are correct. 
A) Cobb Douglas. 
B) Leontief. 
C) Linear. 
D) none of the statements associated with this question are correct.

Question 3

If the production function is Q = K.5L.5 and capital is fixed at 9 unit, then the marginal product of labor when L = 49 is

Accepted Answer

A) 3. 
B) 9/98. 
C) 3/14. 
D) none of the statements associated with this question are correct. 
A) 3. 
B) 9/98. 
C) 3/14. 
D) none of the statements associated with this question are correct.

Question 4

The average product of capital of producing 2,991 units of output (find point B) in the above table is

Accepted Answer

A) 11.1. 
B) 21.9. 
C) 37. 
D) 73. 
A) 11.1. 
B) 21.9. 
C) 37. 
D) 73.

Question 5

Which of the following cost functions exhibits economies of scope when three (3) units of good one and two (2) units of good two are produced?

Accepted Answer

A)  C = 50 - 5Q1Q2 + 0.5Q12 + Q22. 
B)  C = 10 + 4Q1Q2 + Q12 + Q22. 
C)  C = 15 + 5Q1Q2 + 2Q1 + 4Q2. 
D)  C = 5 + Q1Q2 + Q12 Q22. 
A)  C = 50 - 5Q1Q2 + 0.5Q12 + Q22. 
B)  C = 10 + 4Q1Q2 + Q12 + Q22. 
C)  C = 15 + 5Q1Q2 + 2Q1 + 4Q2. 
D)  C = 5 + Q1Q2 + Q12 Q22.

Question 6

Given the production function Q = min {4K, 3L}, what is the average product of capital when 8 units of capital and 16 units of labor are used?

Accepted Answer

A) 16. 
B) 2. 
C) 4. 
D) 32. 
A) 16. 
B) 2. 
C) 4. 
D) 32.

Question 7

Changes in the price of an input cause:

Accepted Answer

A) Isoquants to become steeper. 
B) Slope changes in the isocost line. 
C) Parallel shifts of the isocost lines. 
D) Changes in both the isoquants and isocosts of equal magnitude. 
A) Isoquants to become steeper. 
B) Slope changes in the isocost line. 
C) Parallel shifts of the isocost lines. 
D) Changes in both the isoquants and isocosts of equal magnitude.

Question 8

For the multiproduct cost function C(Q1,Q2) = 100 + 2Q1Q2 + 4Q12, what is the marginal cost function for good one?

Accepted Answer

A) MC1 = 2Q2 + 4Q1 - Q22. 
B) MC1 = 2Q2 + 8Q1. 
C) MC1 = 100 + 2Q1Q2 + 4Q12. 
D) MC1 = 4Q12 - 2 Q22. 
A) MC1 = 2Q2 + 4Q1 - Q22. 
B) MC1 = 2Q2 + 8Q1. 
C) MC1 = 100 + 2Q1Q2 + 4Q12. 
D) MC1 = 4Q12 - 2 Q22.

Question 9

Which of the following cost functions exhibits cost complementarity?

Accepted Answer

A) -4Q1Q2 + 8Q1. 
B) -4Q2 + 8Q1. 
C) 6Q1Q2 - Q1. 
D) 4Q2Q1 + 8Q1. 
A) -4Q1Q2 + 8Q1. 
B) -4Q2 + 8Q1. 
C) 6Q1Q2 - Q1. 
D) 4Q2Q1 + 8Q1.

Question 10

You are the manager of a firm that sells output at a price of $40 per unit.You are interested in hiring a new worker who will increase your firm's output by 2,000 units per year.Several other firms also are interested in hiring this worker.
a.What is the most you should be willing to pay this worker to come to your firm?
b.What will determine whether or not you actually have to offer this much to the worker to induce him to join your firm?

Accepted Answer

a.The extra revenue you will earn by hir

Question 11

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

Question 12

What is the average total cost of producing 160 units of output?

Accepted Answer

A) 12.98. 
B) 16.31. 
C) 22.04. 
D) 19.38. 
A) 12.98. 
B) 16.31. 
C) 22.04. 
D) 19.38.

Question 13

When marginal cost curve is below an average cost curve, average cost is

Accepted Answer

A) increasing with output. 
B) declining with output. 
C) not varying with output. 
D) none of the statements associated with this question are correct. 
A) increasing with output. 
B) declining with output. 
C) not varying with output. 
D) none of the statements associated with this question are correct.

Question 14

The marginal product of capital for the Cobb-Douglas production function is given by

Accepted Answer

A) bKa Lb-1. 
B) aKa-1 Lb. 
C) aKa-1 Lb-1. 
D) bKa Lb. 
A) bKa Lb-1. 
B) aKa-1 Lb. 
C) aKa-1 Lb-1. 
D) bKa Lb.

Question 15

The recipe that defines the maximum amount of output that can be produced with K units of capital and L units of labor is the:

Accepted Answer

A) Production function. 
B) Technological constraint. 
C) Research and development schedule. 
D) Total product. 
A) Production function. 
B) Technological constraint. 
C) Research and development schedule. 
D) Total product.

Question 16

For given input prices, isocosts closer to the origin are associated with

Accepted Answer

A) lower costs. 
B) the same costs. 
C) higher costs. 
D) initially lower then higher costs. 
A) lower costs. 
B) the same costs. 
C) higher costs. 
D) initially lower then higher costs.

Question 17

When there are economies of scope between two products which are separately produced by two firms, merging into a single firm can

Accepted Answer

A) accomplish an increase in sales. 
B) accomplish a reduction in costs. 
C) lead to an increase in cost. 
D) lead to a reduction in sales. 
A) accomplish an increase in sales. 
B) accomplish a reduction in costs. 
C) lead to an increase in cost. 
D) lead to a reduction in sales.

Question 18

In order for isoquants to have a diminishing marginal rate of substitution they must be:

Accepted Answer

A) L-shaped. 
B) Straight lines. 
C) Vertical. 
D) None of the statements associated with this question are correct. 
A) L-shaped. 
B) Straight lines. 
C) Vertical. 
D) None of the statements associated with this question are correct.

Question 19

The costs of production include

Accepted Answer

A) the costs that appear on the income statements. 
B) the opportunity costs foregone by producing a given product. 
C) accounting costs. 
D) accounting costs and opportunity costs. 
A) the costs that appear on the income statements. 
B) the opportunity costs foregone by producing a given product. 
C) accounting costs. 
D) accounting costs and opportunity costs.

Question 20

Suppose the production function is Q = min {3K, L}.How much output is produced when 6 units of labor and 3 units of capital are employed?

Accepted Answer

A) 3. 
B) 6. 
C) 9. 
D) none of the statements associated with this question are correct. 
A) 3. 
B) 6. 
C) 9. 
D) none of the statements associated with this question are correct.

In the short run, the marginal cost curve crosses the average total cost curve at

The production function Q = L^.5K^.5 is called

If the production function is Q = K^.5L^.5 and capital is fixed at 9 unit, then the marginal product of labor when L = 49 is

The average product of capital of producing 2,991 units of output (find point B) in the above table is

Which of the following cost functions exhibits economies of scope when three (3) units of good one and two (2) units of good two are produced?

Given the production function Q = min {4K, 3L}, what is the average product of capital when 8 units of capital and 16 units of labor are used?

Changes in the price of an input cause:

For the multiproduct cost function C(Q₁,Q₂) = 100 + 2Q₁Q₂ + 4Q₁², what is the marginal cost function for good one?

Which of the following cost functions exhibits cost complementarity?

What is the average total cost of producing 160 units of output?

When marginal cost curve is below an average cost curve, average cost is

The marginal product of capital for the Cobb-Douglas production function is given by

The recipe that defines the maximum amount of output that can be produced with K units of capital and L units of labor is the:

For given input prices, isocosts closer to the origin are associated with

When there are economies of scope between two products which are separately produced by two firms, merging into a single firm can

In order for isoquants to have a diminishing marginal rate of substitution they must be:

The costs of production include

Suppose the production function is Q = min {3K, L}.How much output is produced when 6 units of labor and 3 units of capital are employed?

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

Exam 5: The Production Process and Costs

In the short run, the marginal cost curve crosses the average total cost curve at

The production function Q = L.5K.5 is called

If the production function is Q = K.5L.5 and capital is fixed at 9 unit, then the marginal product of labor when L = 49 is

The average product of capital of producing 2,991 units of output (find point B) in the above table is

Which of the following cost functions exhibits economies of scope when three (3) units of good one and two (2) units of good two are produced?

Given the production function Q = min {4K, 3L}, what is the average product of capital when 8 units of capital and 16 units of labor are used?

Changes in the price of an input cause:

For the multiproduct cost function C(Q1,Q2) = 100 + 2Q1Q2 + 4Q12, what is the marginal cost function for good one?

Which of the following cost functions exhibits cost complementarity?

What is the average total cost of producing 160 units of output?

When marginal cost curve is below an average cost curve, average cost is

The marginal product of capital for the Cobb-Douglas production function is given by

The recipe that defines the maximum amount of output that can be produced with K units of capital and L units of labor is the:

For given input prices, isocosts closer to the origin are associated with

When there are economies of scope between two products which are separately produced by two firms, merging into a single firm can

In order for isoquants to have a diminishing marginal rate of substitution they must be:

The costs of production include

Suppose the production function is Q = min {3K, L}.How much output is produced when 6 units of labor and 3 units of capital are employed?

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

The production function Q = L^.5K^.5 is called

If the production function is Q = K^.5L^.5 and capital is fixed at 9 unit, then the marginal product of labor when L = 49 is

For the multiproduct cost function C(Q₁,Q₂) = 100 + 2Q₁Q₂ + 4Q₁², what is the marginal cost function for good one?