Question 1

The production function f(x, y)= x +y has constant returns to scale.

Accepted Answer

A) True 
 B)False

Question 2

The UJava espresso stand needs two inputs, labor and coffee beans, to produce its only output, espresso.Producing an espresso always requires the same amount of coffee beans and the same amount of time.Which of the following production functions would appropriately describe the production process at UJava, where B represents ounces of coffee beans, and L represents hours of labor?

Accepted Answer

A) Q =B0.60L0.40. 
B) Q = B/2 + L/2. 
C) Q = min(2B, 60L). 
D) Q = 0.5B + 0.5L0.5. 
E) None of the above. 
A) Q =B0.60L0.40. 
B) Q = B/2 + L/2. 
C) Q = min(2B, 60L). 
D) Q = 0.5B + 0.5L0.5. 
E) None of the above.

Question 3

For each of the following production functions, draw a diagram showing the general shape of its corresponding isoquant.Comment on the ease at which labor and capital can be substituted for one another relative to the other two production functions.
a.Q = K + L.
b.Q= K0.5L0.5.
c.Q = min(K, L).

Accepted Answer

a.Isoquants are straight lines from the

Question 4

The production function Q = 50K0.25L0.75 exhibits

Accepted Answer

A) increasing, then diminishing returns to scale. 
B) increasing returns to scale. 
C) decreasing returns to scale. 
D) constant returns to scale. 
E) negative returns to scale. 
A) increasing, then diminishing returns to scale. 
B) increasing returns to scale. 
C) decreasing returns to scale. 
D) constant returns to scale. 
E) negative returns to scale.

Question 5

A firm has a production function f(x, y)= 1.80(x0.80 + y0.80)3 whenever x > 0 and y > 0.When the amounts of both inputs are positive, this firm has

Accepted Answer

A) increasing returns to scale if x + y > 1 and decreasing returns to scale otherwise. 
B) decreasing returns to scale. 
C) constant returns to scale. 
D) increasing returns to scale. 
E) increasing returns to scale if output is less than 1 and decreasing returns to scale if output is greater than 1. 
A) increasing returns to scale if x + y > 1 and decreasing returns to scale otherwise. 
B) decreasing returns to scale. 
C) constant returns to scale. 
D) increasing returns to scale. 
E) increasing returns to scale if output is less than 1 and decreasing returns to scale if output is greater than 1.

Question 6

A production function has well-defined marginal products at every input combination.If factor x is shown on the horizontal axis and factor y is shown on the vertical axis, the slope of the isoquant through a point (x*, y*)is the negative of the ratio of the marginal product of x to the marginal product of y.

Accepted Answer

A) True 
 B)False

Question 7

The production function f(x, y)= x2/3+ y2/3 has increasing returns to scale.

Accepted Answer

A) True 
 B)False

Question 8

A firm has the production function f(x, y)= x.5 + y, where x is the amount of factor x it uses and y is the amount of factor y.On a diagram we put x on the horizontal axis and y on the vertical axis.We draw some isoquants.Now we draw a straight line on the graph and we notice that the slopes of all the isoquants that it meets have the same slope at the point where they meet this line.The straight line we drew was

Accepted Answer

A) vertical. 
B) horizontal. 
C) diagonal through the origin with slope 0.5. 
D) diagonal with slope 2. 
E) diagonal with slope greater than 2. 
A) vertical. 
B) horizontal. 
C) diagonal through the origin with slope 0.5. 
D) diagonal with slope 2. 
E) diagonal with slope greater than 2.

Question 9

If a firm moves from one point on a production isoquant to another point on the same isoquant, which of the following will certainly not happen?

Accepted Answer

A) A change in the level of output 
B) A change in the ratio in which the inputs are combined 
C) A change in the marginal products of the inputs 
D) A change in the rate of technical substitution 
E) A change in profitability 
A) A change in the level of output 
B) A change in the ratio in which the inputs are combined 
C) A change in the marginal products of the inputs 
D) A change in the rate of technical substitution 
E) A change in profitability

Question 10

A firm has the production function f(x1, x2)= x0.801x0.202.The isoquant on which output is 702/10 has the equation

Accepted Answer

A) x2 =70x51. 
B) x1/x2 = 4. 
C) x2 = 70x-41. 
D) x2 = 70x-0.201. 
E) x1 = 0.20x-0.802. 
A) x2 =70x51. 
B) x1/x2 = 4. 
C) x2 = 70x-41. 
D) x2 = 70x-0.201. 
E) x1 = 0.20x-0.802.

Question 11

A firm has the production function f(x, y)= x0.90y0.80.This firm has

Accepted Answer

A) constant returns to scale. 
B) decreasing returns to scale and diminishing marginal products for factor x. 
C) decreasing returns to scale and increasing marginal product for factor x. 
D) increasing returns to scale and decreasing marginal product of factor x. 
E) None of the above. 
A) constant returns to scale. 
B) decreasing returns to scale and diminishing marginal products for factor x. 
C) decreasing returns to scale and increasing marginal product for factor x. 
D) increasing returns to scale and decreasing marginal product of factor x. 
E) None of the above.

Question 12

For each of the following production functions, comment on the ability to substitute capital for labor.
a.Q = K + L.
b.Q = K0.5L0.5.
c.Q = min(K, L).

Accepted Answer

a.Perfect substituta

Exam 17: Technology-Part A

The production function f(x, y)= x +y has constant returns to scale.

For each of the following production functions, draw a diagram showing the general shape of its corresponding isoquant.Comment on the ease at which labor and capital can be substituted for one another relative to the other two production functions. a.Q = K + L. b.Q= K0.5L0.5. c.Q = min(K, L).

The production function Q = 50K0.25L0.75 exhibits

A firm has a production function f(x, y)= 1.80(x0.80 + y0.80)3 whenever x > 0 and y > 0.When the amounts of both inputs are positive, this firm has

The production function f(x, y)= x2/3+ y2/3 has increasing returns to scale.

If a firm moves from one point on a production isoquant to another point on the same isoquant, which of the following will certainly not happen?

A firm has the production function f(x1, x2)= x0.801x0.202.The isoquant on which output is 702/10 has the equation

A firm has the production function f(x, y)= x0.90y0.80.This firm has

For each of the following production functions, comment on the ability to substitute capital for labor. a.Q = K + L. b.Q = K0.5L0.5. c.Q = min(K, L).

Budget Constraint-Part A

Budget Constraint-Part B

Preferences-Part A

Preferences-Part B

Utility-Part A

Utility-Part B

Choice-Part A

Choice-Part B

Demand-Part A

Demand-Part B

Revealed Preference-Part A

Revealed Preference-Part B

Slutsky Equation-Part A

Slutsky Equation-Part B

Buying and Selling-Part A

Buying and Selling-Part B

Intertemporal Choice-Part A

Intertemporal Choice-Part B

Asset Markets-Part A

Asset Markets-Part B

Uncertainty-Part A

Uncertainty-Part B

Risky Assets-Part A

Risky Assets-Part B

Consumers Surplus-Part A

Consumers Surplus-Part B

Market Demand-Part A

Market Demand-Part B

Equilibrium-Part A

Equilibrium-Part B

Auctions-Part A

Auctions-Part B

Technology-Part B

Profit Maximization-Part A

Profit Maximization-Part B

Cost Minimization-Part A

Cost Minimization-Part B

Cost Curves-Part A

Cost Curves-Part B

Firm Supply-Part A

Firm Supply-Part B

Industry Supply-Part A

Industry Supply-Part B

Monopoly-Part A

Monopoly-Part B

Monopoly Behavior-Part A

Monopoly Behavior-Part B

Factor Markets-Part A

Factor Markets-Part B

Oligopoly-Part A

Oligopoly-Part B

Game Theory-Part A

Game Theory-Part B

Game Applications-Part A

Game Applications-Part B

Behavioral Economics

Exchange-Part A

Exchange-Part B

Production-Part A

Production-Part B

Welfare-Part A

Welfare-Part B

Externalities-Part A

Externalities-Part B

Information Technology-Part A

Information Technology-Part B

Public Goods-Part A

Public Goods-Part B

Asymmetric Information-Part A

Asymmetric Information-Part B

For each of the following production functions, draw a diagram showing the general shape of its corresponding isoquant.Comment on the ease at which labor and capital can be substituted for one another relative to the other two production functions. a.Q = K + L. b.Q= K^0.5L^0.5. c.Q = min(K, L).

The production function Q = 50K^0.25L^0.75 exhibits

A firm has a production function f(x, y)= 1.80(x^0.80 + y^0.80)³ whenever x > 0 and y > 0.When the amounts of both inputs are positive, this firm has

The production function f(x, y)= x^2/3+ y^2/3 has increasing returns to scale.

A firm has the production function f(x₁, x₂)= x^0.80₁x^0.20₂.The isoquant on which output is 70^2/10 has the equation

A firm has the production function f(x, y)= x^0.90y^0.80.This firm has

For each of the following production functions, comment on the ability to substitute capital for labor. a.Q = K + L. b.Q = K^0.5L^0.5. c.Q = min(K, L).