Question 1

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 2

Table 7-2 shows the combinations of labor and capital that are used to produce various levels of output.  
Refer to Table 7-2.A rational producer would never operate with _____ units of labor and 2 units of capital.

Accepted Answer

A) 2 
B) 1 
C) 5 
D) 4 
A) 2 
B) 1 
C) 5 
D) 4

Question 3

Which of the following is constant along an isoquant?

Accepted Answer

A) Productivity of the variable input 
B) Output 
C) Cost 
D) Utility 
A) Productivity of the variable input 
B) Output 
C) Cost 
D) Utility

Question 4

A production function identifies the _____.

Accepted Answer

A) minimum output that a specific combination of inputs can produce 
B) maximum number of inputs that can be used to produce output 
C) highest possible output for a given combination of inputs 
D) least-cost method of producing a given level of output 
A) minimum output that a specific combination of inputs can produce 
B) maximum number of inputs that can be used to produce output 
C) highest possible output for a given combination of inputs 
D) least-cost method of producing a given level of output

Question 5

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,average 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 6

Which of the following correctly describes a production function?

Accepted Answer

A) A production function shows the minimum output that can be produced with given inputs. 
B) A production function relates employment of inputs to output. 
C) A production function identifies output-cost relationships. 
D) A production function identifies the profit maximizing level of output. 
A) A production function shows the minimum output that can be produced with given inputs. 
B) A production function relates employment of inputs to output. 
C) A production function identifies output-cost relationships. 
D) A production function identifies the profit maximizing level of output.

Question 7

A firm that is operating in a technologically inefficient way:

Accepted Answer

A) is getting the maximum output from its inputs. 
B) is making zero economic profits. 
C) is not making as much money as it potentially can. 
D) should shut down immediately to reduce its losses. 
A) is getting the maximum output from its inputs. 
B) is making zero economic profits. 
C) is not making as much money as it potentially can. 
D) should shut down immediately to reduce its losses.

Question 8

Suppose that at a point on an isoquant,the following information is true: MPL = 3 and MPK = 2.Then if K falls by 5,L must increase by:

Accepted Answer

A) 0.30. 
B) 0.67. 
C) 3.33. 
D) 1.50. 
A) 0.30. 
B) 0.67. 
C) 3.33. 
D) 1.50.

Question 9

If the marginal product of labor is 25 and the marginal product of capital 10,what is the marginal rate of technical substitution of labor for capital?

Accepted Answer

A) 0.6 
B) 1 
C) 1.5 
D) 2.5 
A) 0.6 
B) 1 
C) 1.5 
D) 2.5

Question 10

The production function exhibits increasing returns to scale when a firm can increase production by more than a proportionate increase in _____.

Accepted Answer

A) costs 
B) one input 
C) all inputs 
D) a fixed input 
A) costs 
B) one input 
C) all inputs 
D) a fixed input

Question 11

A factory that manually produces pens employs ten workers.The total output when one worker produces all the parts of a pen himself is 100 pens.When different workers focus on producing different parts of the pen,the output increases to 400 pens.In other words,_____ increases the returns from the same level of inputs.

Accepted Answer

A) increasing the capital-labor ratio/irs 
B) product diversification 
C) a piece rate wage system 
D) specialization of labor 
A) increasing the capital-labor ratio/irs 
B) product diversification 
C) a piece rate wage system 
D) specialization of labor

Question 12

Use the following figure to answer the questions :
Figure 7-2 shows the total product curve for different levels of a variable input,labor.  
-Between points O and C in Figure 7-2:

Accepted Answer

A) the marginal product of labor is falling. 
B) the average product of labor is rising. 
C) total product rises and then falls. 
D) marginal product reaches its minimum. 
A) the marginal product of labor is falling. 
B) the average product of labor is rising. 
C) total product rises and then falls. 
D) marginal product reaches its minimum.

Question 13

Diminishing marginal returns refers to the:

Accepted Answer

A) decline in the rate at which extra inputs are employed in production. 
B) fall in average product associated with a unit increase in the fixed input. 
C) decline in total product which is less than proportionate to a change in the fixed input. 
D) fall in output per unit with an incremental increase in the variable input. 
A) decline in the rate at which extra inputs are employed in production. 
B) fall in average product associated with a unit increase in the fixed input. 
C) decline in total product which is less than proportionate to a change in the fixed input. 
D) fall in output per unit with an incremental increase in the variable input.

Question 14

One important difference between indifference curves and isoquants is that:

Accepted Answer

A) indifference curves are convex while isoquants are concave to the origin. 
B) indifference curves can never intersect while isoquants can intersect. 
C) output shown on isoquants is measurable while well-being shown on indifference curves is not. 
D) indifference curves are likely to be positively sloped while isoquants are mostly negatively sloped. 
A) indifference curves are convex while isoquants are concave to the origin. 
B) indifference curves can never intersect while isoquants can intersect. 
C) output shown on isoquants is measurable while well-being shown on indifference curves is not. 
D) indifference curves are likely to be positively sloped while isoquants are mostly negatively sloped.

Question 15

Use the following figure to answer the questions : Figure 7-1 shows the total product curve for different levels of a variable input,labor. 
 
-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 16

With capital (K)on the vertical axis and labor (L)on the horizontal axis,graphically illustrate increasing,constant,and decreasing returns to scale.

Accepted Answer

@#IMG-DLM&_TB1826_00 The spacing of isoquants prov

Question 17

When the total product curve with only one variable input is increasing at a decreasing rate:

Accepted Answer

A) marginal product is positive but declining. 
B) marginal product curve is negative and decreasing. 
C) the slope of the marginal product curve is zero. 
D) marginal product is positive and increasing. 
A) marginal product is positive but declining. 
B) marginal product curve is negative and decreasing. 
C) the slope of the marginal product curve is zero. 
D) marginal product is positive and increasing.

Question 18

A carpenter hammers nails each day at work.During the first hour she can hammer 120 nails,the second hour 100 nails,the third hour 90 nails,the fourth hour 60 nails,and the fifth hour 10 nails.Her marginal product in the third hour is _____ nails.

Accepted Answer

A) 10 
B) -10 
C) 90 
D) -60 
A) 10 
B) -10 
C) 90 
D) -60

Question 19

Use the following figure to answer the questions :
Figure 7-2 shows the total product curve for different levels of a variable input,labor.  
-When the quantity of labor employed lies between points D and E in Figure 7-2:

Accepted Answer

A) marginal product reaches a maximum and then declines. 
B) marginal product reaches a maximum and then becomes negative. 
C) total product is increasing at a decreasing rate. 
D) total product is decreasing. 
A) marginal product reaches a maximum and then declines. 
B) marginal product reaches a maximum and then becomes negative. 
C) total product is increasing at a decreasing rate. 
D) total product is decreasing.

Question 20

For the following total product curves [TP1 and TP2] for a firm using labor as the only variable input in production,derive the associated marginal and average product curves [AP1,AP2,MP1,MP2] and explain the key relationships.

Accepted Answer

There are several key relationships to c

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

Table 7-2 shows the combinations of labor and capital that are used to produce various levels of output. Refer to Table 7-2.A rational producer would never operate with _____ units of labor and 2 units of capital.

Which of the following is constant along an isoquant?

A production function identifies the _____.

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,average product reaches a maximum at point _____.

Which of the following correctly describes a production function?

A firm that is operating in a technologically inefficient way:

Suppose that at a point on an isoquant,the following information is true: MP_L = 3 and MP_K = 2.Then if K falls by 5,L must increase by:

If the marginal product of labor is 25 and the marginal product of capital 10,what is the marginal rate of technical substitution of labor for capital?

The production function exhibits increasing returns to scale when a firm can increase production by more than a proportionate increase in _____.

Use the following figure to answer the questions : Figure 7-2 shows the total product curve for different levels of a variable input,labor. -Between points O and C in Figure 7-2:

Diminishing marginal returns refers to the:

One important difference between indifference curves and isoquants is that:

Use the following figure to answer the questions : Figure 7-1 shows the total product curve for different levels of a variable input,labor. -In Figure 7-1,marginal product of labor becomes negative beyond point _____.

With capital (K)on the vertical axis and labor (L)on the horizontal axis,graphically illustrate increasing,constant,and decreasing returns to scale.

When the total product curve with only one variable input is increasing at a decreasing rate:

A carpenter hammers nails each day at work.During the first hour she can hammer 120 nails,the second hour 100 nails,the third hour 90 nails,the fourth hour 60 nails,and the fifth hour 10 nails.Her marginal product in the third hour is _____ nails.

Use the following figure to answer the questions : Figure 7-2 shows the total product curve for different levels of a variable input,labor. -When the quantity of labor employed lies between points D and E in Figure 7-2:

For the following total product curves [TP₁ and TP₂] for a firm using labor as the only variable input in production,derive the associated marginal and average product curves [AP₁,AP₂,MP₁,MP₂] and explain the key relationships.

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

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

Table 7-2 shows the combinations of labor and capital that are used to produce various levels of output. Refer to Table 7-2.A rational producer would never operate with _____ units of labor and 2 units of capital.

Which of the following is constant along an isoquant?

A production function identifies the _____.

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,average product reaches a maximum at point _____.

Which of the following correctly describes a production function?

A firm that is operating in a technologically inefficient way:

Suppose that at a point on an isoquant,the following information is true: MPL = 3 and MPK = 2.Then if K falls by 5,L must increase by:

If the marginal product of labor is 25 and the marginal product of capital 10,what is the marginal rate of technical substitution of labor for capital?

The production function exhibits increasing returns to scale when a firm can increase production by more than a proportionate increase in _____.

Use the following figure to answer the questions : Figure 7-2 shows the total product curve for different levels of a variable input,labor. -Between points O and C in Figure 7-2:

Diminishing marginal returns refers to the:

One important difference between indifference curves and isoquants is that:

Use the following figure to answer the questions : Figure 7-1 shows the total product curve for different levels of a variable input,labor. -In Figure 7-1,marginal product of labor becomes negative beyond point _____.

With capital (K)on the vertical axis and labor (L)on the horizontal axis,graphically illustrate increasing,constant,and decreasing returns to scale.

When the total product curve with only one variable input is increasing at a decreasing rate:

A carpenter hammers nails each day at work.During the first hour she can hammer 120 nails,the second hour 100 nails,the third hour 90 nails,the fourth hour 60 nails,and the fifth hour 10 nails.Her marginal product in the third hour is _____ nails.

Use the following figure to answer the questions : Figure 7-2 shows the total product curve for different levels of a variable input,labor. -When the quantity of labor employed lies between points D and E in Figure 7-2:

For the following total product curves [TP1 and TP2] for a firm using labor as the only variable input in production,derive the associated marginal and average product curves [AP1,AP2,MP1,MP2] and explain the key relationships.

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: MP_L = 3 and MP_K = 2.Then if K falls by 5,L must increase by:

For the following total product curves [TP₁ and TP₂] for a firm using labor as the only variable input in production,derive the associated marginal and average product curves [AP₁,AP₂,MP₁,MP₂] and explain the key relationships.