Question 1

The marginal rate of technical substitution always equals

Accepted Answer

A) the slope of the total product curve. 
B) minus the ratio of the marginal products of inputs. 
C) the change in output due to a change in the amount of one input. 
D) the distance between two isoquants. 
A) the slope of the total product curve. 
B) minus the ratio of the marginal products of inputs. 
C) the change in output due to a change in the amount of one input. 
D) the distance between two isoquants. B

Question 2

The law of diminishing marginal returns

Accepted Answer

A) implies that the marginal product of labor must fall. 
B) requires using superior technology to increase output. 
C) means that total output will always fall. 
D) None of the above. 
A) implies that the marginal product of labor must fall. 
B) requires using superior technology to increase output. 
C) means that total output will always fall. 
D) None of the above. A

Question 3

-According to the table above, which of the following exhibit decreasing returns to scale?

Accepted Answer

A) tobacco products and clothing, but not furniture 
B) transportation equipment and food, but not paper products 
C) transportation equipment, food, and paper products 
D) furniture and electronic equipment, but not tobacco products 
A) tobacco products and clothing, but not furniture 
B) transportation equipment and food, but not paper products 
C) transportation equipment, food, and paper products 
D) furniture and electronic equipment, but not tobacco products B

Question 4

If a Cobb-Douglas production function has alpha = 0.34 and beta = 0.42, then a 1% increase in inputs results in a(n)________ change in output.

Accepted Answer

A) 0.8% 
B) 8% 
C) 0.76% 
D) -0.76% 
A) 0.8% 
B) 8% 
C) 0.76% 
D) -0.76%

Question 5

If a firm triples inputs and produces twice the output, then there are

Accepted Answer

A) constant returns to scale. 
B) no returns to scale. 
C) decreasing returns to scale. 
D) increasing returns to scale. 
A) constant returns to scale. 
B) no returns to scale. 
C) decreasing returns to scale. 
D) increasing returns to scale.

Question 6

To say that isoquants are convex is to say that

Accepted Answer

A) the marginal rate of technical substitution falls as labor increases. 
B) capital and labor are perfect substitutes. 
C) labor, but not capital, is subject to the law of diminishing marginal returns. 
D) there are constant returns to scale. 
A) the marginal rate of technical substitution falls as labor increases. 
B) capital and labor are perfect substitutes. 
C) labor, but not capital, is subject to the law of diminishing marginal returns. 
D) there are constant returns to scale.

Question 7

-The above figure shows the isoquants for producing steel. When producing more than 20,000 tons, there are

Accepted Answer

A) increasing returns to scale. 
B) decreasing returns to scale. 
C) constant returns to scale. 
D) economies of scale. 
A) increasing returns to scale. 
B) decreasing returns to scale. 
C) constant returns to scale. 
D) economies of scale.

Question 8

During the "computer revolution" of the 1980s and 1990s, many firms replaced old technology with new technology. What might explain why firms don't change technology as quickly today?

Accepted Answer

The marginal rate of technical substitut

Question 9

In the long run, all factors of production are

Accepted Answer

A) variable. 
B) fixed. 
C) materials. 
D) rented. 
A) variable. 
B) fixed. 
C) materials. 
D) rented.

Question 10

Joey's lawncutting service recently traded in its push mowers for gasoline-powered mowers. Joey still requires one worker per lawnmower; however, more grass is now cut in the same amount of time as before. This is an example of

Accepted Answer

A) labor-saving technical change. 
B) non-neutral technical change. 
C) neutral technical change. 
D) organizational change. 
A) labor-saving technical change. 
B) non-neutral technical change. 
C) neutral technical change. 
D) organizational change.

Question 11

Which of the following is an example of a production function with fixed proportions?

Accepted Answer

A) putting orange juice into cartons 
B) mowing lawns 
C) cutting hair 
D) teaching economics 
A) putting orange juice into cartons 
B) mowing lawns 
C) cutting hair 
D) teaching economics

Question 12

-The above table shows a short-run production function for Albert's Pretzels. The marginal product of labor

Accepted Answer

A) rises then falls as the amount of capital increases. 
B) falls then rises as the amount of labor increases. 
C) is greater than or equal to the average product of labor for all amounts of labor. 
D) is less than or equal to the average product of labor for all amounts of labor. 
A) rises then falls as the amount of capital increases. 
B) falls then rises as the amount of labor increases. 
C) is greater than or equal to the average product of labor for all amounts of labor. 
D) is less than or equal to the average product of labor for all amounts of labor.

Question 13

-The above figure shows the isoquants for producing steel. Decreasing returns to scale are

Accepted Answer

A) present when producing more than 10,000 tons. 
B) present when producing more than 20,000 tons. 
C) present when producing more than 30,000 tons. 
D) never present. 
A) present when producing more than 10,000 tons. 
B) present when producing more than 20,000 tons. 
C) present when producing more than 30,000 tons. 
D) never present.

Question 14

All of the following are considered process innovation EXCEPT

Accepted Answer

A) neutral technical progress. 
B) labor saving technical progress. 
C) organizational innovation. 
D) nonneutral technical progress. 
A) neutral technical progress. 
B) labor saving technical progress. 
C) organizational innovation. 
D) nonneutral technical progress.

Question 15

-In the above figure, Graph D with units of capital on the vertical axis and units of labor on the horizontal axis implies that

Accepted Answer

A) the marginal product of labor is increasing as more labor is employed. 
B) the marginal product of labor is decreasing as more labor is employed. 
C) the capital and labor are perfect substitutes. 
D) capital and labor have to be employed in fixed proportions. 
A) the marginal product of labor is increasing as more labor is employed. 
B) the marginal product of labor is decreasing as more labor is employed. 
C) the capital and labor are perfect substitutes. 
D) capital and labor have to be employed in fixed proportions.

Question 16

An isoquant represents levels of capital and labor that

Accepted Answer

A) have constant marginal productivity. 
B) yield the same level of output. 
C) incur the same total cost. 
D) All of the above. 
A) have constant marginal productivity. 
B) yield the same level of output. 
C) incur the same total cost. 
D) All of the above.

Question 17

The slope of an isoquant tells us

Accepted Answer

A) how much output increases when both inputs are increased. 
B) the increase in MPL when capital increases. 
C) the decrease in capital necessary to keep output constant when labor increases by one unit. 
D) the decrease in capital necessary to keep MPL constant when labor increases by one unit. 
A) how much output increases when both inputs are increased. 
B) the increase in MPL when capital increases. 
C) the decrease in capital necessary to keep output constant when labor increases by one unit. 
D) the decrease in capital necessary to keep MPL constant when labor increases by one unit.

Question 18

-The above figure shows the isoquants for the production of steel. In which regions of production are there increasing, decreasing, and constant returns to scale?

Accepted Answer

When output is less than 10,000 tons, th

Question 19

Which of the following statements is TRUE?

Accepted Answer

A) Labor is always a variable input. 
B) Capital is always a fixed input. 
C) Materials are always variable inputs. 
D) None of the above. 
A) Labor is always a variable input. 
B) Capital is always a fixed input. 
C) Materials are always variable inputs. 
D) None of the above.

Question 20

A factor of production that can be easily changed in the relevant time period is called a

Accepted Answer

A) fixed input. 
B) temporary input. 
C) variable input. 
D) substitution input. 
A) fixed input. 
B) temporary input. 
C) variable input. 
D) substitution input.

The marginal rate of technical substitution always equals

The law of diminishing marginal returns

-According to the table above, which of the following exhibit decreasing returns to scale?

If a Cobb-Douglas production function has alpha = 0.34 and beta = 0.42, then a 1% increase in inputs results in a(n)________ change in output.

If a firm triples inputs and produces twice the output, then there are

To say that isoquants are convex is to say that

-The above figure shows the isoquants for producing steel. When producing more than 20,000 tons, there are

During the "computer revolution" of the 1980s and 1990s, many firms replaced old technology with new technology. What might explain why firms don't change technology as quickly today?

In the long run, all factors of production are

Joey's lawncutting service recently traded in its push mowers for gasoline-powered mowers. Joey still requires one worker per lawnmower; however, more grass is now cut in the same amount of time as before. This is an example of

Which of the following is an example of a production function with fixed proportions?

-The above table shows a short-run production function for Albert's Pretzels. The marginal product of labor

-The above figure shows the isoquants for producing steel. Decreasing returns to scale are

All of the following are considered process innovation EXCEPT

-In the above figure, Graph D with units of capital on the vertical axis and units of labor on the horizontal axis implies that

An isoquant represents levels of capital and labor that

The slope of an isoquant tells us

-The above figure shows the isoquants for the production of steel. In which regions of production are there increasing, decreasing, and constant returns to scale?

Which of the following statements is TRUE?

A factor of production that can be easily changed in the relevant time period is called a

Introduction

Supply and Demand

Empirical Methods for Demand Analysis

Consumer Choice

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Game Theory and Business Strategy

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters

Exam 5: Production

The marginal rate of technical substitution always equals

The law of diminishing marginal returns

-According to the table above, which of the following exhibit decreasing returns to scale?

If a Cobb-Douglas production function has alpha = 0.34 and beta = 0.42, then a 1% increase in inputs results in a(n)________ change in output.

If a firm triples inputs and produces twice the output, then there are

To say that isoquants are convex is to say that

-The above figure shows the isoquants for producing steel. When producing more than 20,000 tons, there are

During the "computer revolution" of the 1980s and 1990s, many firms replaced old technology with new technology. What might explain why firms don't change technology as quickly today?

In the long run, all factors of production are

Joey's lawncutting service recently traded in its push mowers for gasoline-powered mowers. Joey still requires one worker per lawnmower; however, more grass is now cut in the same amount of time as before. This is an example of

Which of the following is an example of a production function with fixed proportions?

-The above table shows a short-run production function for Albert's Pretzels. The marginal product of labor

-The above figure shows the isoquants for producing steel. Decreasing returns to scale are

All of the following are considered process innovation EXCEPT

-In the above figure, Graph D with units of capital on the vertical axis and units of labor on the horizontal axis implies that

An isoquant represents levels of capital and labor that

The slope of an isoquant tells us

-The above figure shows the isoquants for the production of steel. In which regions of production are there increasing, decreasing, and constant returns to scale?

Which of the following statements is TRUE?

A factor of production that can be easily changed in the relevant time period is called a

Introduction

Supply and Demand

Empirical Methods for Demand Analysis

Consumer Choice

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Game Theory and Business Strategy

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters