Question 1

If two variable inputs are related and utilizing more of one decreases the marginal product of the other, then these inputs are:

Accepted Answer

A)  equal. 
B)  substitutes. 
C)  complementary. 
D)  variable. 
E)  constant. 
A)  equal. 
B)  substitutes. 
C)  complementary. 
D)  variable. 
E)  constant. B

Question 2

The profit-maximizing rule for employment of a variable input in a monopsonistic input market is to employ that input until its marginal revenue product is equal to its marginal cost.

Accepted Answer

A) True 
 B)False  True

Question 3

A bilateral monopoly is a market where there is only one buyer and one seller of an input.

Accepted Answer

A) True 
 B)False  True

Question 4

The following table shows worker, quantity of output, and output price information for a mechanical pencil manufacturer. The cost of materials used in each mechanical pencil $1.50.
a. Complete the following table
b. How many mechanical pencils should the firm produce to maximize profits if the wage rate is $7.50 per hour? Why?

Accepted Answer

a. @#IMG-DLM& 
b. The firm should produc

Question 5

Using the following information to complete questions 8 - 11.
Top-It-Off Inc. produces gold pen and pencil sets for executives' desks. Revenue and labor productivity data are given in the following table. The components cost $15.00. The wage rate is constant at $7.50 per hour.  
-Given the above information, how much output should the firm produce and at what price?

Accepted Answer

A)  Q = 85, P = 20 
B)  Q = 85, P = 45 
C)  Q = 75, P = 45 
D)  Q = 75, P = 60 
E)  None of the Above 
A)  Q = 85, P = 20 
B)  Q = 85, P = 45 
C)  Q = 75, P = 45 
D)  Q = 75, P = 60 
E)  None of the Above

Question 6

The marginal revenue product of input a is equal to the gross marginal revenue of input a multiplied by the marginal product of input
a.
False

Accepted Answer

A) True 
 B)False

Question 7

If two variable inputs are related and utilizing more of one increases the marginal product of the other, then these inputs are:

Accepted Answer

A)  equal. 
B)  substitutes. 
C)  complementary. 
D)  variable. 
E)  constant. 
A)  equal. 
B)  substitutes. 
C)  complementary. 
D)  variable. 
E)  constant.

Question 8

The marginal revenue received from selling one more unit of output less the cost of raw materials and intermediate products required for it is equal to the:

Accepted Answer

A)  marginal revenue product of input "a" 
B)  marginal product of input "a" 
C)  net marginal revenue of input "a" 
D)  marginal cost of input "a" 
E)  net marginal cost of input "a" 
A)  marginal revenue product of input "a" 
B)  marginal product of input "a" 
C)  net marginal revenue of input "a" 
D)  marginal cost of input "a" 
E)  net marginal cost of input "a"

Question 9

The net marginal revenue of input a is equal to the marginal revenue received from selling one more unit of output.

Accepted Answer

A) True 
 B)False

Question 10

If more than one input is variable and changes in the quantity utilized of one will affect the productivity of the other inputs then these inputs are:

Accepted Answer

A)  complementary. 
B)  related. 
C)  substitutes. 
D)  equal. 
E)  constant. 
A)  complementary. 
B)  related. 
C)  substitutes. 
D)  equal. 
E)  constant.

Question 11

The marginal revenue product of input a is equal to the marginal revenue received from selling the additional units of output the firm can produce by adding one more unit of input a multiplied by the marginal product of input
a.
False

Accepted Answer

A) True 
 B)False

Question 12

A firm has the following short run total product curve:
TPL = Q = 10.5L + 1.5L2 - .0625L3
where labor, L, is the only variable input and TPL is the total output produced per day. Assume the firm faces a fixed price of $16.00 per unit for its output. Also assume that only whole units of output are possible.
a. If the firm must pay a market-determined wage rate of $60.00 per day for each unit of labor hired, how much labor should it employ?
b. If the firm's daily fixed costs total $1000.00, what will be its total profit per day?

Accepted Answer

a. The firm should produce where MRP<sub

Question 13

Monopsony is the label we attach to a market structure that is characterized by one buyer of some particular product or service.

Accepted Answer

A) True 
 B)False

Question 14

Suppose that the total product of labor per hour) for a firm manufacturing small calculators is given by
TPL = 144L - 1.5L2.
a. Find the MPL function.
b. How many workers should the restaurant employ if the wage rate is $18.00 per hour, the average price of a calculator is $8.00, and the average cost per calculator of the raw materials is $2.00? Why?

Accepted Answer

a. MP_L = dTP_L/dL = 144 - 3L b. The firm sh

Question 15

In a monopsonistic input market the marginal cost of another unit of an input is greater than its price because it is assumed that the firm has to pay a higher price to get an additional unit of input per time period.

Accepted Answer

A) True 
 B)False

Question 16

In a monopsonistic input market, the firm buying the input knows that the price of the input will be determined by:

Accepted Answer

A)  the quantity of output that it produces. 
B)  the marginal revenue product of the input. 
C)  the net marginal revenue of the input. 
D)  the quantity that it purchases. 
E)  the marginal cost of the input. 
A)  the quantity of output that it produces. 
B)  the marginal revenue product of the input. 
C)  the net marginal revenue of the input. 
D)  the quantity that it purchases. 
E)  the marginal cost of the input.

Question 17

When the price of an input is constant:

Accepted Answer

A)  the marginal cost of the input is equal to its price. 
B)  the marginal cost of the input is increasing. 
C)  the marginal cost of the input is variable. 
D)  the marginal cost of the input is decreasing. 
E)  the marginal cost of the input decreases over the initial range of output and then becomes and remains constant. 
A)  the marginal cost of the input is equal to its price. 
B)  the marginal cost of the input is increasing. 
C)  the marginal cost of the input is variable. 
D)  the marginal cost of the input is decreasing. 
E)  the marginal cost of the input decreases over the initial range of output and then becomes and remains constant.

Question 18

If the price of an input is constant, the marginal cost of the input is equal to its price.

Accepted Answer

A) True 
 B)False

Question 19

The increase in the firm's total cost as a result of employing one more unit of input a is equal to the:

Accepted Answer

A)  marginal revenue product of input "a" 
B)  marginal product of input "a" 
C)  net marginal revenue of input "a" 
D)  marginal cost of input "a" 
E)  net marginal cost of input "a" 
A)  marginal revenue product of input "a" 
B)  marginal product of input "a" 
C)  net marginal revenue of input "a" 
D)  marginal cost of input "a" 
E)  net marginal cost of input "a"

Question 20

The marginal cost of an input is equal to the increase in the firm's total cost that results from employing one more unit of the input.

Accepted Answer

A) True 
 B)False

If two variable inputs are related and utilizing more of one decreases the marginal product of the other, then these inputs are:

The profit-maximizing rule for employment of a variable input in a monopsonistic input market is to employ that input until its marginal revenue product is equal to its marginal cost.

A bilateral monopoly is a market where there is only one buyer and one seller of an input.

The marginal revenue product of input a is equal to the gross marginal revenue of input a multiplied by the marginal product of input a. False

If two variable inputs are related and utilizing more of one increases the marginal product of the other, then these inputs are:

The marginal revenue received from selling one more unit of output less the cost of raw materials and intermediate products required for it is equal to the:

The net marginal revenue of input a is equal to the marginal revenue received from selling one more unit of output.

If more than one input is variable and changes in the quantity utilized of one will affect the productivity of the other inputs then these inputs are:

The marginal revenue product of input a is equal to the marginal revenue received from selling the additional units of output the firm can produce by adding one more unit of input a multiplied by the marginal product of input a. False

Monopsony is the label we attach to a market structure that is characterized by one buyer of some particular product or service.

In a monopsonistic input market the marginal cost of another unit of an input is greater than its price because it is assumed that the firm has to pay a higher price to get an additional unit of input per time period.

In a monopsonistic input market, the firm buying the input knows that the price of the input will be determined by:

When the price of an input is constant:

If the price of an input is constant, the marginal cost of the input is equal to its price.

The increase in the firm's total cost as a result of employing one more unit of input a is equal to the:

The marginal cost of an input is equal to the increase in the firm's total cost that results from employing one more unit of the input.

Introduction, Basic Principles, and Methodology

Revenue of the Firm

Topics in Demand Analysis and Estimation

Economic Forecasting

Production Analysis

Cost of Production

Profit Analysis of the Firm

Perfect Competition and Monopoly

Monopolistic Competition and Oligopoly

Games, Information and Strategy

Topics in Pricing and Profit Analysis

Fundamentals of Project Evaluation

Risk in Project Analysis

Economics of Public Sector Decisions

Legal and Regulatory Environment of the Firm

Filters

Exam 12: Factor Markets

If two variable inputs are related and utilizing more of one decreases the marginal product of the other, then these inputs are:

The profit-maximizing rule for employment of a variable input in a monopsonistic input market is to employ that input until its marginal revenue product is equal to its marginal cost.

A bilateral monopoly is a market where there is only one buyer and one seller of an input.

The marginal revenue product of input a is equal to the gross marginal revenue of input a multiplied by the marginal product of input a. False

If two variable inputs are related and utilizing more of one increases the marginal product of the other, then these inputs are:

The marginal revenue received from selling one more unit of output less the cost of raw materials and intermediate products required for it is equal to the:

The net marginal revenue of input a is equal to the marginal revenue received from selling one more unit of output.

If more than one input is variable and changes in the quantity utilized of one will affect the productivity of the other inputs then these inputs are:

The marginal revenue product of input a is equal to the marginal revenue received from selling the additional units of output the firm can produce by adding one more unit of input a multiplied by the marginal product of input a. False

Monopsony is the label we attach to a market structure that is characterized by one buyer of some particular product or service.

In a monopsonistic input market the marginal cost of another unit of an input is greater than its price because it is assumed that the firm has to pay a higher price to get an additional unit of input per time period.

In a monopsonistic input market, the firm buying the input knows that the price of the input will be determined by:

When the price of an input is constant:

If the price of an input is constant, the marginal cost of the input is equal to its price.

The increase in the firm's total cost as a result of employing one more unit of input a is equal to the:

The marginal cost of an input is equal to the increase in the firm's total cost that results from employing one more unit of the input.

Introduction, Basic Principles, and Methodology

Revenue of the Firm

Topics in Demand Analysis and Estimation

Economic Forecasting

Production Analysis

Cost of Production

Profit Analysis of the Firm

Perfect Competition and Monopoly

Monopolistic Competition and Oligopoly

Games, Information and Strategy

Topics in Pricing and Profit Analysis

Fundamentals of Project Evaluation

Risk in Project Analysis

Economics of Public Sector Decisions

Legal and Regulatory Environment of the Firm

Filters