Question 1

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 2

The law of diminishing marginal returns _____.

Accepted Answer

A) is relevant in the short run. 
B) assumes all the inputs are fixed 
C) is applicable to fixed and variable inputs 
D) applies when all inputs are increased 
A) is relevant in the short run. 
B) assumes all the inputs are fixed 
C) is applicable to fixed and variable inputs 
D) applies when all inputs are increased

Question 3

Use the following table to answer the questions :
Table 7-4 shows the shows the quantities of labor and capital required to produce various levels of output.
 
-Refer to Table 7-4.When the firm expands from 6 units of capital and 2 units of labor
To 12 units of capital and 4 units of labor,the production function exhibits:

Accepted Answer

A) increasing returns to scale. 
B) constant returns to scale. 
C) decreasing returns to scale. 
D) diminishing marginal returns. 
A) increasing returns to scale. 
B) constant returns to scale. 
C) decreasing returns to scale. 
D) diminishing marginal returns.

Question 4

Estimation of a production function from the linear equation Q = a + bL + cK,assumes that the law of diminishing returns _____.

Accepted Answer

A) applies to labor only 
B) applies to capital only 
C) applies to both capital and labor 
D) does not apply to either input 
A) applies to labor only 
B) applies to capital only 
C) applies to both capital and labor 
D) does not apply to either input

Question 5

In the long run,_____.

Accepted Answer

A) the marginal cost of each input differs by the ratio of their prices 
B) all inputs to production are fixed 
C) the marginal cost of each input equals the ratio of their prices 
D) all inputs to production are variable 
A) the marginal cost of each input differs by the ratio of their prices 
B) all inputs to production are fixed 
C) the marginal cost of each input equals the ratio of their prices 
D) all inputs to production are variable

Question 6

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 7

Draw isoquants for the following:
a)Tree Fellas Ltd.is a logging firm where the labor input is loggers and capital refers to chainsaws.The output produced is measured in terms of number of trees felled.One logger uses one chainsaw;a logger without a chainsaw will not contribute to output and neither will a chainsaw without a logger.
b)Porch & Co.is a newspaper distributing agency that has to deliver a total of 1,000 newspapers a week using two inputs: paperboys (labor)and newspaper vending machines (capital).If the firm hires an extra vending machine,it can replace one paperboy and still deliver the same number of newspapers.

Accepted Answer

a)The inputs used in the felling of tree

Question 8

A technologically efficient level of output is the _____.

Accepted Answer

A) maximum output possible from the least amount of inputs 
B) level of output produced using the latest technology available 
C) cost-minimizing level of output 
D) maximum output available from a given set of inputs 
A) maximum output possible from the least amount of inputs 
B) level of output produced using the latest technology available 
C) cost-minimizing level of output 
D) maximum output available from a given set of inputs

Question 9

The slope of the total product curve measures the _____ of the input.

Accepted Answer

A) marginal product 
B) average product 
C) total product 
D) cost 
A) marginal product 
B) average product 
C) total product 
D) cost

Question 10

An isoquant shows _____.

Accepted Answer

A) the different quantities of output that can be produced with different quantities of inputs 
B) the combination of inputs that can be used to produce a fixed quantity of output 
C) the different quantities of output that can be produce with fixed quantities of inputs 
D) the combination of inputs than can be used to produce different quantities of output 
A) the different quantities of output that can be produced with different quantities of inputs 
B) the combination of inputs that can be used to produce a fixed quantity of output 
C) the different quantities of output that can be produce with fixed quantities of inputs 
D) the combination of inputs than can be used to produce different quantities of output

Question 11

According to the law of diminishing marginal returns:

Accepted Answer

A) when the amount of some input is increased by equal increments,holding other inputs constant,the resulting increments in output will be negative. 
B) when all inputs are increased proportionately,output eventually will decrease at a smaller rate. 
C) when the amount of some input is increased at equal increments,holding other inputs constant,the resulting increments in output will eventually decrease. 
D) firms will not operate on the portion of the total product curve where marginal product is declining. 
A) when the amount of some input is increased by equal increments,holding other inputs constant,the resulting increments in output will be negative. 
B) when all inputs are increased proportionately,output eventually will decrease at a smaller rate. 
C) when the amount of some input is increased at equal increments,holding other inputs constant,the resulting increments in output will eventually decrease. 
D) firms will not operate on the portion of the total product curve where marginal product is declining.

Question 12

Which of the following statements is true of the relationship between marginal product and average product of labor?

Accepted Answer

A) When the marginal product of labor is decreasing,the average product of labor must also be decreasing. 
B) When the average product of labor is increasing,the marginal product of labor must also be increasing. 
C) When the marginal and average products of labor are equal,the marginal product is at its minimum. 
D) When the average product of labor is decreasing,average product must be greater than marginal product. 
A) When the marginal product of labor is decreasing,the average product of labor must also be decreasing. 
B) When the average product of labor is increasing,the marginal product of labor must also be increasing. 
C) When the marginal and average products of labor are equal,the marginal product is at its minimum. 
D) When the average product of labor is decreasing,average product must be greater than marginal product.

Question 13

Use the following figure to answer the questions : Figure 7-1 shows the total product curve for different levels of a variable input,labor. 
 
-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 14

Use the following figure to answer the questions :
Figure 7-2 shows the total product curve for different levels of a variable input,labor.  
-In Figure 7-2,marginal product reaches a maximum at point _____.

Accepted Answer

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

Question 15

Table 7-2 shows the combinations of labor and capital that are used to produce various levels of output  
Refer to Table 7-2.Based on the input-usage ratio,we can say that the firm is operating _____.

Accepted Answer

A) at an economic loss 
B) in the short-run 
C) in a constant-cost industry 
D) in the long-run 
A) at an economic loss 
B) in the short-run 
C) in a constant-cost industry 
D) in the long-run

Question 16

What factors give rise to increasing returns to scale and decreasing returns to scale?

Accepted Answer

First,when a firm is producing a large q

Question 17

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 18

The fact that limited use of caffeine can improve mental alertness and help performance,while excessive use of caffeine can cause anxiety and trembling shows _____.

Accepted Answer

A) that coffee is an inferior good 
B) the law of diminishing marginal returns with respect to test performance 
C) the law of returns to scale with respect to test performance 
D) decreasing returns to scale in coffee production 
A) that coffee is an inferior good 
B) the law of diminishing marginal returns with respect to test performance 
C) the law of returns to scale with respect to test performance 
D) decreasing returns to scale in coffee production

Question 19

When the marginal and average products of labor are equal:

Accepted Answer

A) marginal product must be at its maximum. 
B) marginal product must be at a minimum. 
C) average product must be at its maximum. 
D) average product must be increasing. 
A) marginal product must be at its maximum. 
B) marginal product must be at a minimum. 
C) average product must be at its maximum. 
D) average product must be increasing.

Question 20

A carpenter hammers nails each day at work.The average number of nails hammered over the first three hours is 50,and the marginal product of the fourth and fifth hours of work is 40 and 20 nails,respectively.The total output after five hours work is _____ nails.

Accepted Answer

A) 150 
B) 110 
C) 210 
D) 60 
A) 150 
B) 110 
C) 210 
D) 60

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

The law of diminishing marginal returns _____.

Estimation of a production function from the linear equation Q = a + bL + cK,assumes that the law of diminishing returns _____.

In the long run,_____.

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.

A technologically efficient level of output is the _____.

The slope of the total product curve measures the _____ of the input.

An isoquant shows _____.

According to the law of diminishing marginal returns:

Which of the following statements is true of the relationship between marginal product and average product of labor?

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

Use the following figure to answer the questions : Figure 7-2 shows the total product curve for different levels of a variable input,labor. -In Figure 7-2,marginal product reaches a maximum at point _____.

Table 7-2 shows the combinations of labor and capital that are used to produce various levels of output Refer to Table 7-2.Based on the input-usage ratio,we can say that the firm is operating _____.

What factors give rise to increasing returns to scale and decreasing returns to scale?

The long-run refers to:

The fact that limited use of caffeine can improve mental alertness and help performance,while excessive use of caffeine can cause anxiety and trembling shows _____.

When the marginal and average products of labor are equal:

A carpenter hammers nails each day at work.The average number of nails hammered over the first three hours is 50,and the marginal product of the fourth and fifth hours of work is 40 and 20 nails,respectively.The total output after five hours work is _____ nails.

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

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

The law of diminishing marginal returns _____.

Estimation of a production function from the linear equation Q = a + bL + cK,assumes that the law of diminishing returns _____.

In the long run,_____.

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.

A technologically efficient level of output is the _____.

The slope of the total product curve measures the _____ of the input.

An isoquant shows _____.

According to the law of diminishing marginal returns:

Which of the following statements is true of the relationship between marginal product and average product of labor?

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

Use the following figure to answer the questions : Figure 7-2 shows the total product curve for different levels of a variable input,labor. -In Figure 7-2,marginal product reaches a maximum at point _____.

Table 7-2 shows the combinations of labor and capital that are used to produce various levels of output Refer to Table 7-2.Based on the input-usage ratio,we can say that the firm is operating _____.

What factors give rise to increasing returns to scale and decreasing returns to scale?

The long-run refers to:

The fact that limited use of caffeine can improve mental alertness and help performance,while excessive use of caffeine can cause anxiety and trembling shows _____.

When the marginal and average products of labor are equal:

A carpenter hammers nails each day at work.The average number of nails hammered over the first three hours is 50,and the marginal product of the fourth and fifth hours of work is 40 and 20 nails,respectively.The total output after five hours work is _____ nails.

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