Question 1

Suppose the wage rate is $25 per hour and the rent on capital is $50 per hour. The equation for the isocost line is given by:

Accepted Answer

A)  C = 75LK. 
B)  C = 25L + 50K. 
C)  C = 75(L + K). 
D)  C = 2K/L. 
A)  C = 75LK. 
B)  C = 25L + 50K. 
C)  C = 75(L + K). 
D)  C = 2K/L.

Question 2

Which of the following is a Cobb-Douglas production function?

Accepted Answer

A)  Q = f(K, L) 
B)  Q = 5K + 2.5L 
C)  Q = K0.50L0.75 
D)  Q = 2K/3L 
A)  Q = f(K, L) 
B)  Q = 5K + 2.5L 
C)  Q = K0.50L0.75 
D)  Q = 2K/3L

Question 3

Suppose the production function for a bakery is:
Q = 4K0.4L0.6
where Q is the number of loaves of bread produced per day, K is the number of ovens, and L is the number of workers employed. Use calculus for the following:
a. determine a function for the marginal product of labor
b. determine a function for the marginal product of capital
c. find the marginal rate of technical substitution
d. discuss how MRTSLK changes as the firm uses more labor, holding output constant

Accepted Answer

a. Marginal product of labor is the part

Question 4

Use the following to answer question:
Figure 6.17  
-(Figure 6.17) The cost-minimizing combination of capital and labor to produce 10 units of output is _____ and _____, respectively, given prices of $10 and $50, respectively. What is the total cost?

Accepted Answer

22.5; 4.5; $450
To determine the cost-mi

Question 5

Suppose the firm's production function is Q = K1/3L2/3, where the MPK =   and MPL =   .

Accepted Answer

a. Set MRTS = W/R: MP_L/MP_K= W/R @#IMG-DLM& 2K/L = 40

Question 6

You've been asked by your manager to choose between the following three production functions based on returns to scale:
Q = 10K2L1
Q = 10K0.5L0.5
Q = 10K0.25L0.5
She would like you to choose the one that exhibits increasing returns to scale and to provide evidence to support your decision.

Accepted Answer

Increasing returns to scale occur when a

Question 7

Consider the production function Q = Af(K, L). Which of the following statements is (are) TRUE?

Accepted Answer

A)  II 
B)  I, II, and III 
C)  II and III 
D)  I 
A)  II 
B)  I, II, and III 
C)  II and III 
D)  I

Question 8

Between 1994 and 2008, the share of the workforce employed in manufacturing _____ and manufacturing output _____.

Accepted Answer

A)  decreased; decreased 
B)  increased; increased 
C)  decreased; increased 
D)  increased; decreased 
A)  decreased; decreased 
B)  increased; increased 
C)  decreased; increased 
D)  increased; decreased

Question 9

The production function given by Q = 10(0.7K2 + 0.3L2)0.5 has _____ returns to scale.

Accepted Answer

A)  constant 
B)  instant 
C)  increasing 
D)  decreasing 
A)  constant 
B)  instant 
C)  increasing 
D)  decreasing

Question 10

Here is a copy of your friend's class notes on the nine basic assumptions of producer behavior:   Because your friend was half-asleep during class, she may have errors in her notes. Correct the errors in her notes where necessary.

Accepted Answer

1. The firm produces only one good.
2. N

Question 11

Using a Lagrangian equation for a firm's cost minimization problem, you can solve for all of the following EXCEPT:

Accepted Answer

A)  the optimal level of labor input. 
B)  the average cost of production. 
C)  the demand function for capital. 
D)  the equation for the expansion path. 
A)  the optimal level of labor input. 
B)  the average cost of production. 
C)  the demand function for capital. 
D)  the equation for the expansion path.

Question 12

Use the following to answer question:
Table 6.5  
-(Table 6.5) The short-run production situation for a firm is listed on this table. Complete the table.

Accepted Answer

The answer of Use the following to answer question:
Table 6.5...

Question 13

Suppose the production function for a bakery is:
Q = 4K0.4L0.6
where Q is the number of loaves of bread produced per day, K is the number of ovens, and L is the number of workers employed.
a. Suppose that the wage rate is $5 per hour and the rental rate of capital is $10 per hour. If the bakery wants to produce 4,000 loaves of bread, what is the cost-minimizing bundle of capital and labor?
b. Derive the firm's expansion path.

Accepted Answer

a. First, we set up the firm's cost mini

Question 14

The short-run production function for a firm is given by Q = 10L0.5. What is the marginal product?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 15

A firm spends $12,000 per day producing a good. The wage rate per worker is $200 per day and rental per unit of capital is $600 per day. The equation for the firm's isocost line would be _____.

Accepted Answer

The generic form of the isocos

Question 16

Use the following to answer question:
Figure 6.12  
-(Figure 6.12) A technological change is represented by the movement from point _____ to point _____.

Accepted Answer

A)  X; Z 
B)  Z; X 
C)  W; Z 
D)  Z; W 
A)  X; Z 
B)  Z; X 
C)  W; Z 
D)  Z; W

Question 17

For the production function Q(K,L) = 3K + 2L, the marginal product of labor is:

Accepted Answer

A) 2) 
B) 3) 
C)  2L. 
D)  3K. 
A) 2) 
B) 3) 
C)  2L. 
D)  3K.

Question 18

Suppose the production function for a car manufacturer is:
Q = 2K2L2
where Q is the number of cars produced, K is the number of machine hours used, and L is the number of worker hours used. Use calculus for the following:
a. to determine a function for the marginal product of labor
b. to determine a function for the marginal product of capital
c. to find the marginal rate of technical substitution
d. to discuss how MRTSLK changes as the firm uses more labor, holding output constant

Accepted Answer

a. Marginal product of labor is the part

Question 19

Use the following to answer question:
Figure 6.9  
-(Figure 6.9) Which of the following statements is (are) TRUE?

Accepted Answer

A)  I and III 
B)  II and III 
C)  I 
D)  I, II, and III 
A)  I and III 
B)  II and III 
C)  I 
D)  I, II, and III

Question 20

Use the following to answer question:
Figure 6.5  
-(Figure 6.5) Suppose a firm spends $4,000 per day producing a good. The wage rate per worker is $200 per day and rental rate per unit of capital is $500 per day. The firm's isocost line at the current expenditure level is represented by:

Accepted Answer

A)  C1. 
B)  C2. 
C)  C3. 
D)  C4. 
A)  C1. 
B)  C2. 
C)  C3. 
D)  C4.

Suppose the wage rate is $25 per hour and the rent on capital is $50 per hour. The equation for the isocost line is given by:

Which of the following is a Cobb-Douglas production function?

Use the following to answer question: Figure 6.17 -(Figure 6.17) The cost-minimizing combination of capital and labor to produce 10 units of output is _ and _, respectively, given prices of $10 and $50, respectively. What is the total cost?

Suppose the firm's production function is Q = K^1/3L^2/3, where the MPK = and MP_L = .

You've been asked by your manager to choose between the following three production functions based on returns to scale: Q = 10K²L¹ Q = 10K^0.5L^0.5 Q = 10K^0.25L^0.5 She would like you to choose the one that exhibits increasing returns to scale and to provide evidence to support your decision.

Consider the production function Q = Af(K, L). Which of the following statements is (are) TRUE?

Between 1994 and 2008, the share of the workforce employed in manufacturing _ and manufacturing output _.

The production function given by Q = 10(0.7K²+ 0.3L²)^0.5 has _____ returns to scale.

Here is a copy of your friend's class notes on the nine basic assumptions of producer behavior: Because your friend was half-asleep during class, she may have errors in her notes. Correct the errors in her notes where necessary.

Using a Lagrangian equation for a firm's cost minimization problem, you can solve for all of the following EXCEPT:

Use the following to answer question: Table 6.5 -(Table 6.5) The short-run production situation for a firm is listed on this table. Complete the table.

The short-run production function for a firm is given by Q = 10L^0.5. What is the marginal product?

A firm spends $12,000 per day producing a good. The wage rate per worker is $200 per day and rental per unit of capital is $600 per day. The equation for the firm's isocost line would be _____.

Use the following to answer question: Figure 6.12 -(Figure 6.12) A technological change is represented by the movement from point _ to point _.

For the production function Q(K,L) = 3K + 2L, the marginal product of labor is:

Use the following to answer question: Figure 6.9 -(Figure 6.9) Which of the following statements is (are) TRUE?

Use the following to answer question: Figure 6.5 -(Figure 6.5) Suppose a firm spends $4,000 per day producing a good. The wage rate per worker is $200 per day and rental rate per unit of capital is $500 per day. The firm's isocost line at the current expenditure level is represented by:

Supply and Demand

Using Supply and Demand to Analyze Markets

Consumer Behavior

Individual and Market Demand

Costs

Supply in a Competitive Market

Market Power and Monopoly

Market Power and Pricing Strategies

Imperfect Competition

Game Theory

Factor Markets

Investment, Time, and Insurance

General Equilibrium

Asymmetric Information

Externalities and Public Goods

Behavioral and Experimental Economics

Filters

Exam 6: Producer Behavior

Suppose the wage rate is $25 per hour and the rent on capital is $50 per hour. The equation for the isocost line is given by:

Which of the following is a Cobb-Douglas production function?

Use the following to answer question: Figure 6.17 -(Figure 6.17) The cost-minimizing combination of capital and labor to produce 10 units of output is _____ and _____, respectively, given prices of $10 and $50, respectively. What is the total cost?

Suppose the firm's production function is Q = K1/3L2/3, where the MPK = and MPL = .

You've been asked by your manager to choose between the following three production functions based on returns to scale: Q = 10K2L1 Q = 10K0.5L0.5 Q = 10K0.25L0.5 She would like you to choose the one that exhibits increasing returns to scale and to provide evidence to support your decision.

Consider the production function Q = Af(K, L). Which of the following statements is (are) TRUE?

Between 1994 and 2008, the share of the workforce employed in manufacturing _____ and manufacturing output _____.

The production function given by Q = 10(0.7K2 + 0.3L2)0.5 has _____ returns to scale.

Here is a copy of your friend's class notes on the nine basic assumptions of producer behavior: Because your friend was half-asleep during class, she may have errors in her notes. Correct the errors in her notes where necessary.

Using a Lagrangian equation for a firm's cost minimization problem, you can solve for all of the following EXCEPT:

Use the following to answer question: Table 6.5 -(Table 6.5) The short-run production situation for a firm is listed on this table. Complete the table.

The short-run production function for a firm is given by Q = 10L0.5. What is the marginal product?

A firm spends $12,000 per day producing a good. The wage rate per worker is $200 per day and rental per unit of capital is $600 per day. The equation for the firm's isocost line would be _____.

Use the following to answer question: Figure 6.12 -(Figure 6.12) A technological change is represented by the movement from point _____ to point _____.

For the production function Q(K,L) = 3K + 2L, the marginal product of labor is:

Use the following to answer question: Figure 6.9 -(Figure 6.9) Which of the following statements is (are) TRUE?

Use the following to answer question: Figure 6.5 -(Figure 6.5) Suppose a firm spends $4,000 per day producing a good. The wage rate per worker is $200 per day and rental rate per unit of capital is $500 per day. The firm's isocost line at the current expenditure level is represented by:

Supply and Demand

Using Supply and Demand to Analyze Markets

Consumer Behavior

Individual and Market Demand

Costs

Supply in a Competitive Market

Market Power and Monopoly

Market Power and Pricing Strategies

Imperfect Competition

Game Theory

Factor Markets

Investment, Time, and Insurance

General Equilibrium

Asymmetric Information

Externalities and Public Goods

Behavioral and Experimental Economics

Filters

Use the following to answer question: Figure 6.17 -(Figure 6.17) The cost-minimizing combination of capital and labor to produce 10 units of output is _ and _, respectively, given prices of $10 and $50, respectively. What is the total cost?

Suppose the firm's production function is Q = K^1/3L^2/3, where the MPK = and MP_L = .

You've been asked by your manager to choose between the following three production functions based on returns to scale: Q = 10K²L¹ Q = 10K^0.5L^0.5 Q = 10K^0.25L^0.5 She would like you to choose the one that exhibits increasing returns to scale and to provide evidence to support your decision.

Between 1994 and 2008, the share of the workforce employed in manufacturing _ and manufacturing output _.

The production function given by Q = 10(0.7K²+ 0.3L²)^0.5 has _____ returns to scale.

The short-run production function for a firm is given by Q = 10L^0.5. What is the marginal product?

Use the following to answer question: Figure 6.12 -(Figure 6.12) A technological change is represented by the movement from point _ to point _.