Question 1

If isoquants are drawn as straight lines,it implies that:

Accepted Answer

A) the two inputs are perfect substitutes for each other. 
B) the MRTS is decreasing. 
C) that the inputs must be used in fixed proportions. 
D) the MRTS is zero. 
A) the two inputs are perfect substitutes for each other. 
B) the MRTS is decreasing. 
C) that the inputs must be used in fixed proportions. 
D) the MRTS is zero.

Question 2

If a firm doubles its usage of all inputs and output less than doubles,the production function is said to exhibit:

Accepted Answer

A) increasing returns to scale. 
B) decreasing returns to scale. 
C) constant returns to scale. 
D) decreasing marginal returns to a fixed factor of production. 
A) increasing returns to scale. 
B) decreasing returns to scale. 
C) constant returns to scale. 
D) decreasing marginal returns to a fixed factor of production.

Question 3

If the average product of labor is 150 bushels of wheat when three workers farm an acre of land and the marginal product of the fourth worker is 75 bushels,then the total output with four workers is _____ bushels.

Accepted Answer

A) 225 
B) 50 
C) 525 
D) 675 
A) 225 
B) 50 
C) 525 
D) 675

Question 4

The long-run refers to:

Accepted Answer

A) a time period of one year or more. 
B) the time period in which all inputs are variable. 
C) the time period in which it is too costly to change the usage of at least one input. 
D) a time period when marginal returns are diminishing. 
A) a time period of one year or more. 
B) the time period in which all inputs are variable. 
C) the time period in which it is too costly to change the usage of at least one input. 
D) a time period when marginal returns are diminishing.

Question 5

The ratio of the change in total product to the change in total quantity of the input being used is _____.

Accepted Answer

A) equal to marginal product 
B) constant as employment levels of the input vary 
C) equal to average product 
D) equal to the marginal rate of technical substitution 
A) equal to marginal product 
B) constant as employment levels of the input vary 
C) equal to average product 
D) equal to the marginal rate of technical substitution

Question 6

Figure 7-2 shows the total product curve for different levels of a variable input,labor.
Figure 7-2  
-Let point A be the inflection point.When the quantity of labor employed is between A and D in Figure 7-2:

Accepted Answer

A) marginal product is negative. 
B) marginal product is decreasing. 
C) average product is increasing. 
D) marginal product is increasing at a decreasing rate. 
A) marginal product is negative. 
B) marginal product is decreasing. 
C) average product is increasing. 
D) marginal product is increasing at a decreasing rate.

Question 7

If total product is increasing at a decreasing rate,then marginal product is _____.

Accepted Answer

A) below average product at all levels of output 
B) above average product at all levels of output 
C) declining faster than average product 
D) increasing at a decreasing rate 
A) below average product at all levels of output 
B) above average product at all levels of output 
C) declining faster than average product 
D) increasing at a decreasing rate

Question 8

Figure 7-1 shows the total product curve for different levels of a variable input,labor.
Figure 7-1  
-In Figure 7-1,marginal product of labor becomes negative beyond point _____.

Accepted Answer

A) A 
B) B 
C) C 
D) D 
A) A 
B) B 
C) C 
D) D

Question 9

Table 7-4 shows the quantities of labor and capital required to produce various levels of output.
Table 7-4 $$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Amount of } \
\text { Capital }
\end{array} & \begin{array} { c } 
\text { Amount of } \
\text { Labor }
\end{array} & \text { Total Product } \
\hline 5 & 1 & 10 \
\hline 5 & 2 & 24 \
\hline 5 & 3 & 42 \
\hline 5 & 4 & 56 \
\hline 5 & 5 & 66 \
\hline 5 & 6 & 74 \
\hline 5 & 7 & 80 \
\hline
\end{array}$$
-Refer to Table 7-4.What is the marginal product of the fourth worker?

Accepted Answer

A) 10 
B) 14 
C) 42 
D) 56 
A) 10 
B) 14 
C) 42 
D) 56

Question 10

If isoquants are drawn as right angles,it implies:

Accepted Answer

A) that the two inputs are perfect substitutes for each other. 
B) that the MRTS is constant. 
C) that the inputs must be used in fixed proportions. 
D) the isoquants can be intersecting. 
A) that the two inputs are perfect substitutes for each other. 
B) that the MRTS is constant. 
C) that the inputs must be used in fixed proportions. 
D) the isoquants can be intersecting.

Question 11

A production isoquant identifies _____.

Accepted Answer

A) the maximum output possible,given a fixed budget 
B) the different combinations of goods that can be produced,given fixed amounts of inputs 
C) the different combinations of inputs that can be used to produce a fixed rate of output 
D) the cost of producing a given output 
A) the maximum output possible,given a fixed budget 
B) the different combinations of goods that can be produced,given fixed amounts of inputs 
C) the different combinations of inputs that can be used to produce a fixed rate of output 
D) the cost of producing a given output

Question 12

Which of the following is a feature of an isoquant?

Accepted Answer

A) Isoquants are concave to the origin. 
B) Isoquants are nonintersecting. 
C) Isoquants lying farther to the northeast identify lower levels of output. 
D) Producers prefer higher points on an isoquant. 
A) Isoquants are concave to the origin. 
B) Isoquants are nonintersecting. 
C) Isoquants lying farther to the northeast identify lower levels of output. 
D) Producers prefer higher points on an isoquant.

Question 13

A production function embodies increasing,constant,and decreasing returns to scale:

Accepted Answer

A) when the proportion of capital to labor used in production is constant. 
B) at low output levels. 
C) in the short-run. 
D) at various points on an isoquant. 
A) when the proportion of capital to labor used in production is constant. 
B) at low output levels. 
C) in the short-run. 
D) at various points on an isoquant.

Question 14

Table 7-3 shows the combinations of labor and capital required to produce various level of output.
Table 7-3  
-Refer to Table 7-3.Assume that labor remains fixed while capital is the only variable input used in production.If the firm is currently producing 26 units of output using three units of labor,what is the marginal product of capital at this point?

Accepted Answer

A) 2 
B) 4 
C) 6 
D) 8 
A) 2 
B) 4 
C) 6 
D) 8

Question 15

Figure 7-2 shows the total product curve for different levels of a variable input,labor.
Figure 7-2  
-In Figure 7-2,at point C _____.

Accepted Answer

A) average product equals marginal product 
B) marginal product is at a maximum 
C) total product is increasing at an increasing rate 
D) average product is declining but positive 
A) average product equals marginal product 
B) marginal product is at a maximum 
C) total product is increasing at an increasing rate 
D) average product is declining but positive

Question 16

Suppose that at a point on an isoquant,the following information is true: L increases by 5;K falls by 3;MPL = 4,then MPK must be:

Accepted Answer

A) 3.33. 
B) 0.67. 
C) 1.67. 
D) 6.67. 
A) 3.33. 
B) 0.67. 
C) 1.67. 
D) 6.67.

Question 17

Which of the following is true of fixed costs?

Accepted Answer

A) Fixed costs can be changed,but it is extremely costly to do so in a short period of time. 
B) Fixed costs cannot be changed in the long-run. 
C) Fixed costs can be changed,but only in the short run. 
D) Fixed costs cannot be changed in the short-run,because most firms experience constant returns to scale in the short run. 
A) Fixed costs can be changed,but it is extremely costly to do so in a short period of time. 
B) Fixed costs cannot be changed in the long-run. 
C) Fixed costs can be changed,but only in the short run. 
D) Fixed costs cannot be changed in the short-run,because most firms experience constant returns to scale in the short run.

Question 18

The ratio of total product to the total quantity of the input being used is _____.

Accepted Answer

A) equal to marginal product 
B) constant as the levels of the input vary 
C) equal to average product 
D) equal to the marginal rate of technical substitution 
A) equal to marginal product 
B) constant as the levels of the input vary 
C) equal to average product 
D) equal to the marginal rate of technical substitution

Question 19

Figure 7-1 shows the total product curve for different levels of a variable input,labor.
Figure 7-1  
-Refer to Figure 7-1.A firm would choose to operate between points C and D because:

Accepted Answer

A) marginal product has already reached a maximum. 
B) average product is rising over that range. 
C) marginal product and average product are positive,but falling. 
D) marginal product and average product are rising. 
A) marginal product has already reached a maximum. 
B) average product is rising over that range. 
C) marginal product and average product are positive,but falling. 
D) marginal product and average product are rising.

Question 20

Which of the following contributes to the increasing returns to scale in production as a firm expands capacity?

Accepted Answer

A) Specialization of labor 
B) Increase in average cost and decrease in output 
C) Increase labor while keeping capital constant 
D) Increase in marginal utility 
A) Specialization of labor 
B) Increase in average cost and decrease in output 
C) Increase labor while keeping capital constant 
D) Increase in marginal utility

If isoquants are drawn as straight lines,it implies that:

If a firm doubles its usage of all inputs and output less than doubles,the production function is said to exhibit:

If the average product of labor is 150 bushels of wheat when three workers farm an acre of land and the marginal product of the fourth worker is 75 bushels,then the total output with four workers is _____ bushels.

The long-run refers to:

The ratio of the change in total product to the change in total quantity of the input being used is _____.

Figure 7-2 shows the total product curve for different levels of a variable input,labor. Figure 7-2 -Let point A be the inflection point.When the quantity of labor employed is between A and D in Figure 7-2:

If total product is increasing at a decreasing rate,then marginal product is _____.

Figure 7-1 shows the total product curve for different levels of a variable input,labor. Figure 7-1 -In Figure 7-1,marginal product of labor becomes negative beyond point _____.

Table 7-4 shows the quantities of labor and capital required to produce various levels of output. Table 7-4 Amount of Capital Amount of Labor Total Product 5 1 10 5 2 24 5 3 42 5 4 56 5 5 66 5 6 74 5 7 80 -Refer to Table 7-4.What is the marginal product of the fourth worker?

If isoquants are drawn as right angles,it implies:

A production isoquant identifies _____.

Which of the following is a feature of an isoquant?

A production function embodies increasing,constant,and decreasing returns to scale:

Figure 7-2 shows the total product curve for different levels of a variable input,labor. Figure 7-2 -In Figure 7-2,at point C _____.

Suppose that at a point on an isoquant,the following information is true: L increases by 5;K falls by 3;MP_L = 4,then MP_K must be:

Which of the following is true of fixed costs?

The ratio of total product to the total quantity of the input being used is _____.

Figure 7-1 shows the total product curve for different levels of a variable input,labor. Figure 7-1 -Refer to Figure 7-1.A firm would choose to operate between points C and D because:

Which of the following contributes to the increasing returns to scale in production as a firm expands capacity?

An Introduction to Microeconomics

Supply and Demand

The Theory of Consumer Choice

Individual and Market Demand

Using Consumer Choice Theory

Exchange, Efficiency, and Prices

The Cost of Production

Profit Maximization in Perfectly Competitive Markets

Using the Competitive Model

Monopoly

Product Pricing With Monopoly Power

Monopolistic Competition and Oligopoly

Game Theory and the Economics of Information

Using Noncompetitive Market Models

Employment and Pricing of Inputs

Wages, Rent, Interest, and Profit

Using Input Market Analysis

General Equilibrium Analysis and Economic Efficiency

Public Goods and Externalities

Filters

Exam 7: Production

If isoquants are drawn as straight lines,it implies that:

If a firm doubles its usage of all inputs and output less than doubles,the production function is said to exhibit:

If the average product of labor is 150 bushels of wheat when three workers farm an acre of land and the marginal product of the fourth worker is 75 bushels,then the total output with four workers is _____ bushels.

The long-run refers to:

The ratio of the change in total product to the change in total quantity of the input being used is _____.

Figure 7-2 shows the total product curve for different levels of a variable input,labor. Figure 7-2 -Let point A be the inflection point.When the quantity of labor employed is between A and D in Figure 7-2:

If total product is increasing at a decreasing rate,then marginal product is _____.

Figure 7-1 shows the total product curve for different levels of a variable input,labor. Figure 7-1 -In Figure 7-1,marginal product of labor becomes negative beyond point _____.

Table 7-4 shows the quantities of labor and capital required to produce various levels of output. Table 7-4 Amount of Capital Amount of Labor Total Product 5 1 10 5 2 24 5 3 42 5 4 56 5 5 66 5 6 74 5 7 80 -Refer to Table 7-4.What is the marginal product of the fourth worker?

If isoquants are drawn as right angles,it implies:

A production isoquant identifies _____.

Which of the following is a feature of an isoquant?

A production function embodies increasing,constant,and decreasing returns to scale:

Figure 7-2 shows the total product curve for different levels of a variable input,labor. Figure 7-2 -In Figure 7-2,at point C _____.

Suppose that at a point on an isoquant,the following information is true: L increases by 5;K falls by 3;MPL = 4,then MPK must be:

Which of the following is true of fixed costs?

The ratio of total product to the total quantity of the input being used is _____.

Figure 7-1 shows the total product curve for different levels of a variable input,labor. Figure 7-1 -Refer to Figure 7-1.A firm would choose to operate between points C and D because:

Which of the following contributes to the increasing returns to scale in production as a firm expands capacity?

An Introduction to Microeconomics

Supply and Demand

The Theory of Consumer Choice

Individual and Market Demand

Using Consumer Choice Theory

Exchange, Efficiency, and Prices

The Cost of Production

Profit Maximization in Perfectly Competitive Markets

Using the Competitive Model

Monopoly

Product Pricing With Monopoly Power

Monopolistic Competition and Oligopoly

Game Theory and the Economics of Information

Using Noncompetitive Market Models

Employment and Pricing of Inputs

Wages, Rent, Interest, and Profit

Using Input Market Analysis

General Equilibrium Analysis and Economic Efficiency

Public Goods and Externalities

Filters

Suppose that at a point on an isoquant,the following information is true: L increases by 5;K falls by 3;MP_L = 4,then MP_K must be: