Question 1

Are returns to a single input and returns to scale one and the same? Explain.

Accepted Answer

No.Returns to a single input refers to c

Question 2

Average physical product measures the output per unit of input.

Accepted Answer

A) True 
 B)False

Question 3

The optimum quantity of an input occurs when

Accepted Answer

A) diminishing returns set in. 
B) marginal revenue product equals input price. 
C) marginal physical product equals input price. 
D) marginal revenue product equals output price. 
A) diminishing returns set in. 
B) marginal revenue product equals input price. 
C) marginal physical product equals input price. 
D) marginal revenue product equals output price.

Question 4

Figure 7-7  
-In Figure 7-7 at 100 units, AFC equals

Accepted Answer

A) 10. 
B) 100. 
C) 180. 
D) 1,000. 
A) 10. 
B) 100. 
C) 180. 
D) 1,000.

Question 5

Which of the following is the correct statement of the marginal rule for optimal input proportions? The input proportion is optimal when

Accepted Answer

A) PA = PB. 
B) MPPA = MPPB. 
C) PA × MPPA = PB × MPPB. 
D) PA/PB = MPPA/MPPB. 
A) PA = PB. 
B) MPPA = MPPB. 
C) PA × MPPA = PB × MPPB. 
D) PA/PB = MPPA/MPPB.

Question 6

In a machine shop, the marginal physical product of an additional unit of labor is 4 units of output, while the marginal physical product of an additional piece of machinery is 2, under what conditions would the firm increase labor usage?

Accepted Answer

A) It would increase labor usage if the wage rate is more than twice the unit price of a piece of machinery. 
B) It would increase labor usage if the wage rate is less than twice the unit price of a piece of machinery. 
C) It would increase labor usage as long as the wage rate is less than the unit price of a piece of machinery. 
D) It would not increase labor usage under any scenario. 
A) It would increase labor usage if the wage rate is more than twice the unit price of a piece of machinery. 
B) It would increase labor usage if the wage rate is less than twice the unit price of a piece of machinery. 
C) It would increase labor usage as long as the wage rate is less than the unit price of a piece of machinery. 
D) It would not increase labor usage under any scenario.

Exam 7: Production, Inputs, and Cost: Building Blocks for Supply Analysis

Are returns to a single input and returns to scale one and the same? Explain.

Average physical product measures the output per unit of input.

The optimum quantity of an input occurs when

Figure 7-7 -In Figure 7-7 at 100 units, AFC equals

Which of the following is the correct statement of the marginal rule for optimal input proportions? The input proportion is optimal when

In a machine shop, the marginal physical product of an additional unit of labor is 4 units of output, while the marginal physical product of an additional piece of machinery is 2, under what conditions would the firm increase labor usage?

What Is Economics

The Economony: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: an Initial Look

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Output, Price, and Profit: the Importance of Marginal Analysis

The Financial Markets and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

The Case for Free Markets: the Price System

Monopoly

Between Competition and Monopoly

Limiting Market Power: Antitrust and Regulation

The Shortcomings of Free Markets

The Economics of the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: the Human Inputs

Poverty, Inequality, and Discrimination

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation

Bringing in the Supply Side: Unemployment and Inflation

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder

Exchange Rates and the Macroeconomy

Contemporary Issues in the Useconomy

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