Question 1

If the marginal product of labor is constant for all levels of output,then the average product of labor

Accepted Answer

A) is constant. 
B) equals the marginal product of labor. 
C) Both A and B above. 
D) Either A or B above but not both. 
A) is constant. 
B) equals the marginal product of labor. 
C) Both A and B above. 
D) Either A or B above but not both.

Question 2

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 3

A firm operating with diminishing total returns cannot be profit maximizing.

Accepted Answer

A) True 
 B)False

Question 4

Were it not for the law of diminishing marginal returns,we could grow the world's food supply from a flowerpot.

Accepted Answer

A) True 
 B)False

Question 5

Let the production function be q = ALaKb.The function exhibits increasing returns to scale if

Accepted Answer

A) a + b = 1. B) a + b > 1. C) a + b < 1. D) Cannot be determined with the information given. A) a + b = 1. B) a + b > 1. C) a + b < 1. D) Cannot be determined with the information given.

Question 6

Total product is maximized where

Accepted Answer

A) average product is maximized. 
B) marginal product is maximized. 
C) average product is equal to 0. 
D) marginal product is equal to 0. 
A) average product is maximized. 
B) marginal product is maximized. 
C) average product is equal to 0. 
D) marginal product is equal to 0.

Question 7

The returns to scale of the production function Q = 50 L0.4 K0.2 are

Accepted Answer

A) 50. 
B) .6. 
C) .8. 
D) 500.6. 
A) 50. 
B) .6. 
C) .8. 
D) 500.6.

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

For what values of a and b will the following production function exhibit increasing,decreasing or constant returns to scale?
q = (La + Ka)1/b

Accepted Answer

Let q = f(L,K).Then
f(2L,2K)=

Question 10

-The above figure shows the isoquants for producing steel.When producing between 10,000 and 20,000 tons there are

Accepted Answer

A) increasing returns to scale. 
B) decreasing returns to scale. 
C) constant returns to scale. 
D) economies of scale. 
A) increasing returns to scale. 
B) decreasing returns to scale. 
C) constant returns to scale. 
D) economies of scale.

Question 11

Homer's Donut Shoppe has the production function q = 10L +20L2 - 5L3.The average product of labor is

Accepted Answer

A) AP = 10 + 20L - 5L2 
B) AP = 10 + 40L - 15L2 
C) AP = 10L 
D) AP = 10 + 20L 
A) AP = 10 + 20L - 5L2 
B) AP = 10 + 40L - 15L2 
C) AP = 10L 
D) AP = 10 + 20L

Question 12

Returns to scale refers to the change in output when

Accepted Answer

A) all inputs increase proportionately. 
B) labor increases holding all other inputs fixed. 
C) capital equipment is doubled. 
D) specialization improves. 
A) all inputs increase proportionately. 
B) labor increases holding all other inputs fixed. 
C) capital equipment is doubled. 
D) specialization improves.

Question 13

The average product of labor is

Accepted Answer

A) the change in total product resulting from an extra unit of labor,holding other factors constant. 
B) the ratio of output to the number of workers used to produce that output. 
C) the amount of output that can be produced by a given amount of labor. 
D) equal to the marginal product of labor when the average product is increasing. 
A) the change in total product resulting from an extra unit of labor,holding other factors constant. 
B) the ratio of output to the number of workers used to produce that output. 
C) the amount of output that can be produced by a given amount of labor. 
D) equal to the marginal product of labor when the average product is increasing.

Question 14

Economists typically assume that the owners of firms wish to

Accepted Answer

A) produce efficiently. 
B) maximize sales revenues. 
C) maximize profits. 
D) All of the above. 
A) produce efficiently. 
B) maximize sales revenues. 
C) maximize profits. 
D) All of the above.

Question 15

Which of the following statements best summarizes the law of diminishing marginal returns?

Accepted Answer

A) In the short run,as more labor is hired,output diminishes. 
B) In the short run,as more labor is hired,output increases at a diminishing rate. 
C) In the short run,the amount of labor a firm will hire diminishes as output increases. 
D) As more labor is hired,the length of time that defines the short run diminishes. 
A) In the short run,as more labor is hired,output diminishes. 
B) In the short run,as more labor is hired,output increases at a diminishing rate. 
C) In the short run,the amount of labor a firm will hire diminishes as output increases. 
D) As more labor is hired,the length of time that defines the short run diminishes.

Question 16

What do we mean by efficient production?

Accepted Answer

Efficient production implies t

Question 17

Find the Marginal Rate of Technical Substitution for the following production functions:
a.q = L0.5 K0.5
b.q = L0.5 + K0.5
c.q = min{K,L}
d.q = L + K

Accepted Answer

a.K/L
b.K/L
c.- infi

Question 18

Isoquants that are downward-sloping straight lines imply that the inputs

Accepted Answer

A) are perfect substitutes. 
B) are imperfect substitutes. 
C) cannot be used together. 
D) must be used together in a certain proportion. 
A) are perfect substitutes. 
B) are imperfect substitutes. 
C) cannot be used together. 
D) must be used together in a certain proportion.

Question 19

An isoquant represents levels of capital and labor that

Accepted Answer

A) have constant marginal productivity. 
B) yield the same level of output. 
C) incur the same total cost. 
D) All of the above. 
A) have constant marginal productivity. 
B) yield the same level of output. 
C) incur the same total cost. 
D) All of the above.

Question 20

If marginal productivity is increasing,then total product is

Accepted Answer

A) increasing at an increasing speed. 
B) increasing at a constant speed. 
C) increasing at a decreasing speed. 
D) decreasing at an increasing speed. 
A) increasing at an increasing speed. 
B) increasing at a constant speed. 
C) increasing at a decreasing speed. 
D) decreasing at an increasing speed.

If the marginal product of labor is constant for all levels of output,then the average product of labor

In the long run,all factors of production are

A firm operating with diminishing total returns cannot be profit maximizing.

Were it not for the law of diminishing marginal returns,we could grow the world's food supply from a flowerpot.

Let the production function be q = AL^aK^b.The function exhibits increasing returns to scale if

Total product is maximized where

The returns to scale of the production function Q = 50 L^0.4 K^0.2 are

Efficient production occurs if a firm

For what values of a and b will the following production function exhibit increasing,decreasing or constant returns to scale? q = (L^a + K^a)^1/^b

-The above figure shows the isoquants for producing steel.When producing between 10,000 and 20,000 tons there are

Homer's Donut Shoppe has the production function q = 10L +20L²- 5L³.The average product of labor is

Returns to scale refers to the change in output when

The average product of labor is

Economists typically assume that the owners of firms wish to

Which of the following statements best summarizes the law of diminishing marginal returns?

What do we mean by efficient production?

Find the Marginal Rate of Technical Substitution for the following production functions: a.q = L^0.5K^0.5 b.q = L^0.5 + K^0.5 c.q = min{K,L} d.q = L + K

Isoquants that are downward-sloping straight lines imply that the inputs

An isoquant represents levels of capital and labor that

If marginal productivity is increasing,then total product is

Introduction

Supply and Demand

A Consumers Constrained Choice

Demand

Consumer Welfare and Policy Analysis

Costs

Competitive Firms and Markets

Properties and Applications of the Competitive Model

General Equilibrium and Economic Welfare

Monopoly and Monopsony

Pricing and Advertising

Game Theory

Oligopoly and Monopolistic Competition

Factor Markets

Uncertainty

Property Rights, Externalities, Rivalry, and Exclusion

Asymmetric Information

Contracts and Moral Hazards

Filters

Exam 6: Firms and Production

If the marginal product of labor is constant for all levels of output,then the average product of labor

In the long run,all factors of production are

A firm operating with diminishing total returns cannot be profit maximizing.

Were it not for the law of diminishing marginal returns,we could grow the world's food supply from a flowerpot.

Let the production function be q = ALaKb.The function exhibits increasing returns to scale if

Total product is maximized where

The returns to scale of the production function Q = 50 L0.4 K0.2 are

Efficient production occurs if a firm

For what values of a and b will the following production function exhibit increasing,decreasing or constant returns to scale? q = (La + Ka)1/b

-The above figure shows the isoquants for producing steel.When producing between 10,000 and 20,000 tons there are

Homer's Donut Shoppe has the production function q = 10L +20L2 - 5L3.The average product of labor is

Returns to scale refers to the change in output when

The average product of labor is

Economists typically assume that the owners of firms wish to

Which of the following statements best summarizes the law of diminishing marginal returns?

What do we mean by efficient production?

Find the Marginal Rate of Technical Substitution for the following production functions: a.q = L0.5 K0.5 b.q = L0.5 + K0.5 c.q = min{K,L} d.q = L + K

Isoquants that are downward-sloping straight lines imply that the inputs

An isoquant represents levels of capital and labor that

If marginal productivity is increasing,then total product is

Introduction

Supply and Demand

A Consumers Constrained Choice

Demand

Consumer Welfare and Policy Analysis

Costs

Competitive Firms and Markets

Properties and Applications of the Competitive Model

General Equilibrium and Economic Welfare

Monopoly and Monopsony

Pricing and Advertising

Game Theory

Oligopoly and Monopolistic Competition

Factor Markets

Uncertainty

Property Rights, Externalities, Rivalry, and Exclusion

Asymmetric Information

Contracts and Moral Hazards

Filters

Let the production function be q = AL^aK^b.The function exhibits increasing returns to scale if

The returns to scale of the production function Q = 50 L^0.4 K^0.2 are

For what values of a and b will the following production function exhibit increasing,decreasing or constant returns to scale? q = (L^a + K^a)^1/^b

Homer's Donut Shoppe has the production function q = 10L +20L²- 5L³.The average product of labor is

Find the Marginal Rate of Technical Substitution for the following production functions: a.q = L^0.5K^0.5 b.q = L^0.5 + K^0.5 c.q = min{K,L} d.q = L + K