Question 1

-The above figure shows the isoquants for producing steel.When producing less than 10,000 tons there are

Accepted Answer

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

Question 2

Suppose the production function for T-shirts can be represented as q = L0.25 K0.75.Show that the production function has constant returns to scale.

Accepted Answer

When L = L₁ and K = K₁,q = q₁.Let L₂ = γL₁and

Question 3

Automobile manufacturers view the assembly-line workers as

Accepted Answer

A) capital services. 
B) labor services. 
C) materials. 
D) None of above. 
A) capital services. 
B) labor services. 
C) materials. 
D) None of above.

Question 4

Returns to scale is a concept that operates

Accepted Answer

A) only in the short run. 
B) only in the long run. 
C) in both the long run and the short run. 
D) in either the long run or the short run,but never both. 
A) only in the short run. 
B) only in the long run. 
C) in both the long run and the short run. 
D) in either the long run or the short run,but never both.

Question 5

Suppose firms A and B each make T-shirts.Firm A's production function is q = L0.5 K0.5.Firm B's production function is q = 1.2 ∗ L0.5 K0.5.If the two firms each hire the same amounts of capital and labor,compare the two firms in terms of APL and MPL.

Accepted Answer

Firm B's AP_L and MP_L w

Question 6

Ed's building company has the following production function
q = 20L - L2
where q is the number of houses built and L is the quantity of labor Ed employs.
a.Derive the MP and AP.
b.For what values of L is the MP > 0? For what values of L is the MP diminishing?
c.Draw the MP and AP on a graph.

Accepted Answer

a.MP = dq/dL = 20 - 2L;AP = 20

Question 7

Suppose the production function for T-shirts can be represented as q = L0.25 K0.75.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 8

Let the production function be q = ALaKb.The function exhibits decreasing 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 9

Suppose the production function for a certain device is q = L + K.If neutral technical change has occurred,which of the following could be the new production function?

Accepted Answer

A) q = L + 5K 
B) q = 5 ∗ (L + K) 
C) q = 5L + K 
D) All of the above are possible. 
A) q = L + 5K 
B) q = 5 ∗ (L + K) 
C) q = 5L + K 
D) All of the above are possible.

Question 10

Lectures in microeconomics can be delivered either by an instructor (labor)or a movie (capital)or any combination of both.Yet the it gets harder and harder to substitute more movies for an instructor the more movies are already used.Which graph in the above figure best represents the isoquants for lectures in microeconomics 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 11

Suppose the production function for T-shirts can be represented as q = L0.25 K0.75.Show that the isoquants for this function are convex.

Accepted Answer

The slope of the isoquant is -

Question 12

Suppose the production of VCRs can be represented by the following production function:
Q = L0.4 K0.4.Which of the following statements is TRUE?

Accepted Answer

A) The production function has decreasing returns to scale. 
B) The production function has increasing returns to scale. 
C) The production function has constant returns to scale. 
D) Returns to scale vary with the level of output. 
A) The production function has decreasing returns to scale. 
B) The production function has increasing returns to scale. 
C) The production function has constant returns to scale. 
D) Returns to scale vary with the level of output.

-The above figure shows the isoquants for producing steel.When producing less than 10,000 tons there are

Suppose the production function for T-shirts can be represented as q = L^0.25 K^0.75.Show that the production function has constant returns to scale.

Automobile manufacturers view the assembly-line workers as

Returns to scale is a concept that operates

Suppose firms A and B each make T-shirts.Firm A's production function is q = L^0.5 K^0.5.Firm B's production function is q = 1.2 ∗ L^0.5 K^0.5.If the two firms each hire the same amounts of capital and labor,compare the two firms in terms of AP_L and MP_L.

Ed's building company has the following production function q = 20L - L² where q is the number of houses built and L is the quantity of labor Ed employs. a.Derive the MP and AP. b.For what values of L is the MP > 0? For what values of L is the MP diminishing? c.Draw the MP and AP on a graph.

Suppose the production function for T-shirts can be represented as q = L^0.25 K^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.The function exhibits decreasing returns to scale if

Suppose the production function for a certain device is q = L + K.If neutral technical change has occurred,which of the following could be the new production function?

Suppose the production function for T-shirts can be represented as q = L^0.25 K^0.75.Show that the isoquants for this function are convex.

Suppose the production of VCRs can be represented by the following production function: Q = L^0.4 K^0.4.Which of the following statements is TRUE?

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

-The above figure shows the isoquants for producing steel.When producing less than 10,000 tons there are

Suppose the production function for T-shirts can be represented as q = L0.25 K0.75.Show that the production function has constant returns to scale.

Automobile manufacturers view the assembly-line workers as

Returns to scale is a concept that operates

Suppose firms A and B each make T-shirts.Firm A's production function is q = L0.5 K0.5.Firm B's production function is q = 1.2 ∗ L0.5 K0.5.If the two firms each hire the same amounts of capital and labor,compare the two firms in terms of APL and MPL.

Ed's building company has the following production function q = 20L - L2 where q is the number of houses built and L is the quantity of labor Ed employs. a.Derive the MP and AP. b.For what values of L is the MP > 0? For what values of L is the MP diminishing? c.Draw the MP and AP on a graph.

Suppose the production function for T-shirts can be represented as q = L0.25 K0.75.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.The function exhibits decreasing returns to scale if

Suppose the production function for a certain device is q = L + K.If neutral technical change has occurred,which of the following could be the new production function?

Suppose the production function for T-shirts can be represented as q = L0.25 K0.75.Show that the isoquants for this function are convex.

Suppose the production of VCRs can be represented by the following production function: Q = L0.4 K0.4.Which of the following statements is TRUE?

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

Suppose the production function for T-shirts can be represented as q = L^0.25 K^0.75.Show that the production function has constant returns to scale.

Suppose firms A and B each make T-shirts.Firm A's production function is q = L^0.5 K^0.5.Firm B's production function is q = 1.2 ∗ L^0.5 K^0.5.If the two firms each hire the same amounts of capital and labor,compare the two firms in terms of AP_L and MP_L.

Ed's building company has the following production function q = 20L - L² where q is the number of houses built and L is the quantity of labor Ed employs. a.Derive the MP and AP. b.For what values of L is the MP > 0? For what values of L is the MP diminishing? c.Draw the MP and AP on a graph.

Suppose the production function for T-shirts can be represented as q = L^0.25 K^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.The function exhibits decreasing returns to scale if

Suppose the production function for T-shirts can be represented as q = L^0.25 K^0.75.Show that the isoquants for this function are convex.

Suppose the production of VCRs can be represented by the following production function: Q = L^0.4 K^0.4.Which of the following statements is TRUE?