Question 1

The marginal product of labour is:

Accepted Answer

A) the amount of capital that would have the same cost as an additional worker. 
B) the additional output from an additional worker. 
C) the amount of capital that one worker could replace keeping output constant. 
D) the additional cost of an additional worker. 
A) the amount of capital that would have the same cost as an additional worker. 
B) the additional output from an additional worker. 
C) the amount of capital that one worker could replace keeping output constant. 
D) the additional cost of an additional worker. B

Question 2

The cost to a cab driver of taking the day off increases when:

Accepted Answer

A) it rains. 
B) the price of gasoline rises. 
C) it is sunny. 
D) more cabs enter the business. 
A) it rains. 
B) the price of gasoline rises. 
C) it is sunny. 
D) more cabs enter the business. A

Question 3

If STC = 3q2 + 7q + 15 , then:

Accepted Answer

A) AFC = 15. 
B) SMC = 6q. 
C) VC = 3q2 + 7q. 
D) ATC = 3q + 7. 
A) AFC = 15. 
B) SMC = 6q. 
C) VC = 3q2 + 7q. 
D) ATC = 3q + 7. C

Question 4

Which of the following would be considered a sunk cost to a pharmaceutical company?

Accepted Answer

A) clinical trials 
B) the lighting costs of the pill making factory 
C) pill making machines 
D) the ingredients to make pills 
A) clinical trials 
B) the lighting costs of the pill making factory 
C) pill making machines 
D) the ingredients to make pills

Question 5

The costs that influence decisions to supply are always:

Accepted Answer

A) average costs. 
B) avoidable costs. 
C) sunk costs. 
D) costs not yet incurred. 
A) average costs. 
B) avoidable costs. 
C) sunk costs. 
D) costs not yet incurred.

Question 6

If a firm uses a fixed- proportions production technology to produce its final output:

Accepted Answer

A) the AP of the variable factor is constant. 
B) the cost curves are obtained in a similar fashion with the non- fixed- proportion technologies. 
C) it will always employ the same amount of the variable factor. 
D) the law of diminishing marginal productivity does not apply. 
A) the AP of the variable factor is constant. 
B) the cost curves are obtained in a similar fashion with the non- fixed- proportion technologies. 
C) it will always employ the same amount of the variable factor. 
D) the law of diminishing marginal productivity does not apply.

Question 7

If STC = 7q3 + 3q + 7, then AVC is:

Accepted Answer

A) 7q2 + 3 + 7/q. 
B) 7q2 + 3q + 7/q. 
C) 7q2 + 3. 
D) 7q2 + 3q. 
A) 7q2 + 3 + 7/q. 
B) 7q2 + 3q + 7/q. 
C) 7q2 + 3. 
D) 7q2 + 3q.

Question 8

The total product function of a variable input depends on:

Accepted Answer

A) fixed quantities of all other inputs. 
B) careful monitoring of finished goods. 
C) the market price of the resource. 
D) technology available at the time. 
A) fixed quantities of all other inputs. 
B) careful monitoring of finished goods. 
C) the market price of the resource. 
D) technology available at the time.

Question 9

Sam produces widgets according to the production function F(L)= 100L(1/2).
i)What is Sam's average productivity of labour?
ii)What is Sam's marginal productivity of labour?
iii)Graph APL and MPL on a diagram. Show that MPL is lower than APL for all values of L.

Accepted Answer

i)APL = 100L⁽^-^1/2) ii)MPL = 50L⁽^-^1/2) iii)

Question 10

A firm should allocate its workforce between the two plants such that the average product of workers in the two plants is the same.

Accepted Answer

A) True 
 B)False

Question 11

The higher the level of FC:

Accepted Answer

A) the lower the level of output which minimizes SMC. 
B) the lower the profit, ceteris paribus. 
C) the higher the level of output at which AFC reaches a minimum. 
D) the more likely a firm will substitute variables for fixed factors. 
A) the lower the level of output which minimizes SMC. 
B) the lower the profit, ceteris paribus. 
C) the higher the level of output at which AFC reaches a minimum. 
D) the more likely a firm will substitute variables for fixed factors.

Question 12

When a firm produces its product using the quantity of the variable resource which maximizes its average product:

Accepted Answer

A) marginal cost is minimized. 
B) average cost equals marginal cost. 
C) marginal product is also maximized. 
D) average cost is maximized. 
A) marginal cost is minimized. 
B) average cost equals marginal cost. 
C) marginal product is also maximized. 
D) average cost is maximized.

Question 13

A firm should allocate its output between the two plants such that the average cost in the two plants is the same.

Accepted Answer

A) True 
 B)False

Question 14

The diminishing marginal product of labour refers to:

Accepted Answer

A) that as more and more workers are hired holding the level of capital fixed, the additional output will decrease. 
B) a decline in our educational system. 
C) workers getting lazy with age. 
D) that as more and more workers are hired holding the level of capital fixed, the total output will decrease. 
A) that as more and more workers are hired holding the level of capital fixed, the additional output will decrease. 
B) a decline in our educational system. 
C) workers getting lazy with age. 
D) that as more and more workers are hired holding the level of capital fixed, the total output will decrease.

Question 15

Figure 6A
 
-At point B in Figure 6A, the MP and AP are equal to each other because:

Accepted Answer

A) the total product function has reached its maximum. 
B) the variable resource is most productive. 
C) the slopes of a ray from the origin and of the TP are equal. 
D) the fixed resources are no longer productive. 
A) the total product function has reached its maximum. 
B) the variable resource is most productive. 
C) the slopes of a ray from the origin and of the TP are equal. 
D) the fixed resources are no longer productive.

Question 16

The variable cost function shows the expenditure on the variable output:

Accepted Answer

A) needed for technically efficient production, given an input price. 
B) as the price of the variable input changes. 
C) as the level of the variable input employed changes. 
D) which gives the least- cost combination of inputs for an output level. 
A) needed for technically efficient production, given an input price. 
B) as the price of the variable input changes. 
C) as the level of the variable input employed changes. 
D) which gives the least- cost combination of inputs for an output level.

Question 17

Widgets are produced according to the production function: F(K,L)= 2K+L. If K = 10 how much L is needed to produce 100 widgets?

Accepted Answer

A) 70 
B) 60 
C) 80 
D) 40 
A) 70 
B) 60 
C) 80 
D) 40

Question 18

Herongate Horses produces saddles (y)using two inputs, leather (z1)and labour (z2). Herongate Horses' production function is given by: F(z1,z2)= (1/4)z1z2 . Suppose that z2 is fixed at 2.
i)Find Herongate Horses' total product function, TP(z1)when w1 = 5 and w2 = 20.
ii)Find Herongate Horses' variable cost function, VC(y). Find and graph the average variable cost function,
AVC(y).

Accepted Answer

i)TP(z₁)= z

Question 19

Suppose that the production function for a truck driver is M = 34.641M0·5G0·5 where M is miles traveled, G is gallons of gasoline, and S is speed in kilometers per hour. Which of the following is the name of this type of production function?

Accepted Answer

A) Leontief 
B) Fixed proportions 
C) Polynomial 
D) Cobb- Douglas 
A) Leontief 
B) Fixed proportions 
C) Polynomial 
D) Cobb- Douglas

Question 20

The free- disposal assumption implies that:

Accepted Answer

A) the MP of an input cannot be negative. 
B) garbage disposal is costless. 
C) excess use on an input reduces output unless more of others are used. 
D) total product always increases as quantity of a variable input. 
A) the MP of an input cannot be negative. 
B) garbage disposal is costless. 
C) excess use on an input reduces output unless more of others are used. 
D) total product always increases as quantity of a variable input.

The marginal product of labour is:

The cost to a cab driver of taking the day off increases when:

If STC = 3q²+ 7q + 15 , then:

Which of the following would be considered a sunk cost to a pharmaceutical company?

The costs that influence decisions to supply are always:

If a firm uses a fixed- proportions production technology to produce its final output:

If STC = 7q³+ 3q + 7, then AVC is:

The total product function of a variable input depends on:

Sam produces widgets according to the production function F(L)= 100L^(1/2). i)What is Sam's average productivity of labour? ii)What is Sam's marginal productivity of labour? iii)Graph APL and MPL on a diagram. Show that MPL is lower than APL for all values of L.

A firm should allocate its workforce between the two plants such that the average product of workers in the two plants is the same.

The higher the level of FC:

When a firm produces its product using the quantity of the variable resource which maximizes its average product:

A firm should allocate its output between the two plants such that the average cost in the two plants is the same.

The diminishing marginal product of labour refers to:

Figure 6A -At point B in Figure 6A, the MP and AP are equal to each other because:

The variable cost function shows the expenditure on the variable output:

Widgets are produced according to the production function: F(K,L)= 2K+L. If K = 10 how much L is needed to produce 100 widgets?

Suppose that the production function for a truck driver is M = 34.641M⁰·⁵G⁰·⁵where M is miles traveled, G is gallons of gasoline, and S is speed in kilometers per hour. Which of the following is the name of this type of production function?

The free- disposal assumption implies that:

Microeconomics: a Working Methodology

A Theory of Preferences

Demand Theory

More Demand Theory

Intertemporal Decision Making and Capital Values

Production Cost: Many Variable Inputs

The Theory of Perfect Competition

Applications of the Competitive Model

Monopoly

Input Markets and the Allocation of Resources

Labour Market Applications

Competitive General Equilibrium

Price Discrimination Monopoly Practices

Introduction to Game Theory

Game Theory and Oligopoly

Choice Making Under Uncertainty

Assymmetric Information, the Rules of the Game, and Externalities

The Theory of the Firm

Assymetric Information and Market Behaviour

Filters

Exam 6: Production Cost: One Variable Input

The marginal product of labour is:

The cost to a cab driver of taking the day off increases when:

If STC = 3q2 + 7q + 15 , then:

Which of the following would be considered a sunk cost to a pharmaceutical company?

The costs that influence decisions to supply are always:

If a firm uses a fixed- proportions production technology to produce its final output:

If STC = 7q3 + 3q + 7, then AVC is:

The total product function of a variable input depends on:

Sam produces widgets according to the production function F(L)= 100L(1/2). i)What is Sam's average productivity of labour? ii)What is Sam's marginal productivity of labour? iii)Graph APL and MPL on a diagram. Show that MPL is lower than APL for all values of L.

A firm should allocate its workforce between the two plants such that the average product of workers in the two plants is the same.

The higher the level of FC:

When a firm produces its product using the quantity of the variable resource which maximizes its average product:

A firm should allocate its output between the two plants such that the average cost in the two plants is the same.

The diminishing marginal product of labour refers to:

Figure 6A -At point B in Figure 6A, the MP and AP are equal to each other because:

The variable cost function shows the expenditure on the variable output:

Widgets are produced according to the production function: F(K,L)= 2K+L. If K = 10 how much L is needed to produce 100 widgets?

Suppose that the production function for a truck driver is M = 34.641M0·5G0·5 where M is miles traveled, G is gallons of gasoline, and S is speed in kilometers per hour. Which of the following is the name of this type of production function?

The free- disposal assumption implies that:

Microeconomics: a Working Methodology

A Theory of Preferences

Demand Theory

More Demand Theory

Intertemporal Decision Making and Capital Values

Production Cost: Many Variable Inputs

The Theory of Perfect Competition

Applications of the Competitive Model

Monopoly

Input Markets and the Allocation of Resources

Labour Market Applications

Competitive General Equilibrium

Price Discrimination Monopoly Practices

Introduction to Game Theory

Game Theory and Oligopoly

Choice Making Under Uncertainty

Assymmetric Information, the Rules of the Game, and Externalities

The Theory of the Firm

Assymetric Information and Market Behaviour

Filters

If STC = 3q²+ 7q + 15 , then:

If STC = 7q³+ 3q + 7, then AVC is:

Sam produces widgets according to the production function F(L)= 100L^(1/2). i)What is Sam's average productivity of labour? ii)What is Sam's marginal productivity of labour? iii)Graph APL and MPL on a diagram. Show that MPL is lower than APL for all values of L.

Suppose that the production function for a truck driver is M = 34.641M⁰·⁵G⁰·⁵where M is miles traveled, G is gallons of gasoline, and S is speed in kilometers per hour. Which of the following is the name of this type of production function?