Exam 5: The Production Process and Costs

Standard Enterprises produces an output that it sells in a highly competitive market at a price of $100 per unit. Its inputs include two machines (which cost the firm $50 each) and workers, who can be hired on an as-needed basis in a labor market at a cost of $2,800 per worker. Based on the following production data, how many workers should the firm employ to maximize its profits?

The creation of a new product is referred to as:

Which of the following conditions is true when a producer minimizes the cost of producing a given level of output?

The production function in the table below exhibits negative marginal returns to capital over what output range?

For the multiproduct cost function C(Q₁, Q₂) = 100 + 2Q₁Q₂ + 4Q₁², what is the marginal cost function for good one?

Given the production function Q = min{4K, 3L}, what is the average product of capital when 8 units of capital and 16 units of labor are used?

Which of the following profit functions exhibits a Cobb-Douglas production function?

The inputs that a manager uses to alter production are referred to as:

Sunk costs are those costs that:

The Leontief production function:

Changes in the price of an input cause:

Suppose the production function is given by Q = 3K + 4L. What is the marginal product of capital when 5 units of capital and 10 units of labor are employed?

Suppose the production function is given by Q = 3K + 4L. What is the marginal product of capital when 10 units of capital and 10 units of labor are employed?

Suppose the cost function is C(Q) = 50 + Q - 10Q² + 2Q³. What are the fixed costs?

Fixed costs exist only in:

The following table summarizes the short-run production function for your firm. Your product sells for $5 per unit, labor costs $5 per unit, and the rental price of capital is $20 per unit. Complete the following table, and then answer the accompanying questions. a. Which inputs are fixed inputs? Which are the variable inputs? b. How much are your fixed costs? c. What is the variable cost of producing 20 units of output? d. How many units of the variable input should be used to maximize profits? e. What are your maximum profits? f. Over what range of variable input usage do increasing marginal returns exist? g. Over what range of variable input usage do decreasing marginal returns exist? h. Over what range of variable input usage do negative marginal returns exist?

According to the table below, what is the average total cost of producing 160 units of output?

The value of marginal product of an input is the value of the:

The marginal product of capital for the Cobb-Douglas production function is given by:

The Leontief production function implies: