Question 1

In the following graph,the price of labor is $15 per unit.Which of the following combinations of capital and labor lies on the expansion path?

Accepted Answer

A) 15K,40L 
B) 18K,40L 
C) 30K,100L 
D) 21K,60L 
E) none of the above 
A) 15K,40L 
B) 18K,40L 
C) 30K,100L 
D) 21K,60L 
E) none of the above

Question 2

Refer to the following graph.The price of labor is $3 per unit: What is the price per unit of capital?

Accepted Answer

A) $1.50 
B) $2.00 
C) $2.10 
D) $5.00 
A) $1.50 
B) $2.00 
C) $2.10 
D) $5.00

Question 3

If there are no fixed costs in the long run,how can it be said that economies of scale arise from spreading fixed costs over more units of output?

Accepted Answer

A)  Economies of scale is a short run phenomenon,and so diminishing returns is the root cause of scale economies. 
B)  It is instead the cost of quasi-fixed inputs that gets spread over more units of output which drives down average cost in the long run. 
C)  Average fixed costs decline continuously as output rises. 
D)  Long-run average cost falls because all fixed costs are sunk. 
A)  Economies of scale is a short run phenomenon,and so diminishing returns is the root cause of scale economies. 
B)  It is instead the cost of quasi-fixed inputs that gets spread over more units of output which drives down average cost in the long run. 
C)  Average fixed costs decline continuously as output rises. 
D)  Long-run average cost falls because all fixed costs are sunk.

Question 4

In the following graph,the price of capital is $100 per unit.Which of the following combinations of capital and labor lies on the expansion path?

Accepted Answer

A) 20K,60L 
B) 35K,140L 
C) 50K,200L 
D) all of the above 
E) none of the above 
A) 20K,60L 
B) 35K,140L 
C) 50K,200L 
D) all of the above 
E) none of the above

Question 5

Given the above graph,if the firm continues to produce 45 units of output and moves from point A to point B,it must be true that

Accepted Answer

A) the price of labor decreased relative to the price of capital. 
B) the price of capital decreased relative to the price of labor. 
C) the cost of producing 45 units decreased. 
D) both b and c 
E) none of these are true 
A) the price of labor decreased relative to the price of capital. 
B) the price of capital decreased relative to the price of labor. 
C) the cost of producing 45 units decreased. 
D) both b and c 
E) none of these are true

Question 6

In the following graph,the price of capital is $100 per unit; the price of labor is $25 per unit.When output is 20 units,what is AVERAGE cost?

Accepted Answer

A) $350 
B) $700 
C) $3,500 
D) $7,000 
E) none of the above 
A) $350 
B) $700 
C) $3,500 
D) $7,000 
E) none of the above

Question 7

Refer to the following figure.The price of capital is $50 per unit:   What is the marginal rate of technical substitution at each cost minimizing equilibrium point?

Accepted Answer

A) 0.80 
B) 0.40 
C) 2.50 
D) 2.00 
E) impossible to tell without marginal products 
A) 0.80 
B) 0.40 
C) 2.50 
D) 2.00 
E) impossible to tell without marginal products

Question 8

In the above graph,as you move from point B to point C,

Accepted Answer

A) output is unchanged. 
B) cost is unchanged. 
C) the amount of capital increases and the amount of labor decreases. 
D) both b and c 
E) all of the above 
A) output is unchanged. 
B) cost is unchanged. 
C) the amount of capital increases and the amount of labor decreases. 
D) both b and c 
E) all of the above

Question 9

Economies of scale exist when

Accepted Answer

A) total cost decreases as output increases. 
B) long-run average cost decreases as output increases. 
C) marginal cost decreases as output increases. 
D) fixed cost decreases as output increases. 
A) total cost decreases as output increases. 
B) long-run average cost decreases as output increases. 
C) marginal cost decreases as output increases. 
D) fixed cost decreases as output increases.

In the following graph,the price of labor is $15 per unit.Which of the following combinations of capital and labor lies on the expansion path?

Refer to the following graph.The price of labor is $3 per unit: What is the price per unit of capital?

If there are no fixed costs in the long run,how can it be said that economies of scale arise from spreading fixed costs over more units of output?

In the following graph,the price of capital is $100 per unit.Which of the following combinations of capital and labor lies on the expansion path?

Given the above graph,if the firm continues to produce 45 units of output and moves from point A to point B,it must be true that

In the following graph,the price of capital is $100 per unit; the price of labor is $25 per unit.When output is 20 units,what is AVERAGE cost?

Refer to the following figure.The price of capital is $50 per unit: What is the marginal rate of technical substitution at each cost minimizing equilibrium point?

In the above graph,as you move from point B to point C,

Economies of scale exist when

Managers,profits,and Markets

Demand,supply,and Market Equilibrium

Marginal Analysis for Optimal Decisions

Basic Estimation Techniques

Theory of Consumer Behavior

Elasticity and Demand

Demand Estimation and Forecasting

Production and Cost in the Short Run

Production and Cost Estimation

Managerial Decisions in Competitive Markets

Managerial Decisions for Firms With Market Power

Strategic Decision Making in Oligopoly Markets

Advanced Pricing Techniques

Decisions Under Risk and Uncertainty

Government Regulation of Business

Filters

Exam 9: Production and Cost in the Long Run

In the following graph,the price of labor is $15 per unit.Which of the following combinations of capital and labor lies on the expansion path?

Refer to the following graph.The price of labor is $3 per unit: What is the price per unit of capital?

If there are no fixed costs in the long run,how can it be said that economies of scale arise from spreading fixed costs over more units of output?

In the following graph,the price of capital is $100 per unit.Which of the following combinations of capital and labor lies on the expansion path?

Given the above graph,if the firm continues to produce 45 units of output and moves from point A to point B,it must be true that

In the following graph,the price of capital is $100 per unit; the price of labor is $25 per unit.When output is 20 units,what is AVERAGE cost?

Refer to the following figure.The price of capital is $50 per unit: What is the marginal rate of technical substitution at each cost minimizing equilibrium point?

In the above graph,as you move from point B to point C,

Economies of scale exist when

Managers,profits,and Markets

Demand,supply,and Market Equilibrium

Marginal Analysis for Optimal Decisions

Basic Estimation Techniques

Theory of Consumer Behavior

Elasticity and Demand

Demand Estimation and Forecasting

Production and Cost in the Short Run

Production and Cost Estimation

Managerial Decisions in Competitive Markets

Managerial Decisions for Firms With Market Power

Strategic Decision Making in Oligopoly Markets

Advanced Pricing Techniques

Decisions Under Risk and Uncertainty

Government Regulation of Business

Filters