Question 1

Which one of these is false when compared to the relationship between marginal and average product?

Accepted Answer

A) When average product is increasing in labor, marginal product is greater than average product. That is, if $\mathrm { AP } _ { \mathrm { L } }$ increases in $\mathrm { L }$, then $\mathrm { MP } _ { \mathrm { L } } > \mathrm { AP } _ { \mathrm { L } }$. B) When average product is decreasing in labor, marginal product is less than average product. That is, if $\mathrm { AP } _ { \mathrm { L } }$ decreases in $\mathrm { L }$, then $\mathrm { MP } _ { \mathrm { L } } < \mathrm { AP } _ { \mathrm { L } }$. C) The relationship between $\mathrm { MP } _ { \mathrm { L } }$ and $\mathrm { AP } _ { \mathrm { L } }$ is not the same as the relationship between the marginal of anything and the average of anything. D) When average product neither increases nor decreases in labor because we are at a point at which $\mathrm { AP } _ { \mathrm { L } }$ is at a maximum, then marginal product is equal to average product. A) When average product is increasing in labor, marginal product is greater than average product. That is, if $\mathrm { AP } _ { \mathrm { L } }$ increases in $\mathrm { L }$, then $\mathrm { MP } _ { \mathrm { L } } > \mathrm { AP } _ { \mathrm { L } }$. B) When average product is decreasing in labor, marginal product is less than average product. That is, if $\mathrm { AP } _ { \mathrm { L } }$ decreases in $\mathrm { L }$, then $\mathrm { MP } _ { \mathrm { L } } < \mathrm { AP } _ { \mathrm { L } }$. C) The relationship between $\mathrm { MP } _ { \mathrm { L } }$ and $\mathrm { AP } _ { \mathrm { L } }$ is not the same as the relationship between the marginal of anything and the average of anything. D) When average product neither increases nor decreases in labor because we are at a point at which $\mathrm { AP } _ { \mathrm { L } }$ is at a maximum, then marginal product is equal to average product.

Question 2

Let a firm's production function be $Q = 100 ( a L + b K )$. The production function then becomes $Q = 500 ( a L + b K )$. Which of the following statements is true?

Accepted Answer

A) Neutral technological progress has occurred. 
B) Labor-saving technological progress has occurred. 
C) Capital-saving technological progress has occurred. 
D) Economies of scale have increased. 
A) Neutral technological progress has occurred. 
B) Labor-saving technological progress has occurred. 
C) Capital-saving technological progress has occurred. 
D) Economies of scale have increased.

Question 3

A type of production function that includes linear production functions, fixed-proportions production functions, and Cobb-Douglas production functions as special cases is:

Accepted Answer

A) Cobb-Douglas production function 
B) Constant elasticity of substitution (CES)production function 
C) Fixed proportions production functions 
D) Linear production functions 
A) Cobb-Douglas production function 
B) Constant elasticity of substitution (CES)production function 
C) Fixed proportions production functions 
D) Linear production functions

Question 4

The Cobb-Douglas production function is given by the general formula $Q = \mathrm { AL } ^ { \alpha } \mathrm { K } ^ { \beta }$ and the constant elasticity of substitution is equal to 0 .

Accepted Answer

A) True 
 B)False

Question 5

$$\begin{array} { | l | l | l | l | l | l | } 
\hline & \mathrm { K } = 0 & \mathrm {~K} = 1 & \mathrm {~K} = 2 & \mathrm {~K} = 3 & \mathrm {~K} = 4 \
\hline \mathrm { L } = 0 & 0 & 0 & 0 & 0 & 0 \
\hline \mathrm { L } = 1 & 0 & 1 & 2 & 3 & 4 \
\hline \mathrm { L } = 2 & 0 & 8 & 16 & 24 & 32 \
\hline \mathrm { L } = 3 & 0 & 27 & 54 & 81 & 108 \
\hline \mathrm { L } = 4 & 0 & 64 & 128 & 192 & 256 \
\hline
\end{array}$$
-Based on the table above, holding labor constant, what do you notice about the marginal productivity of capital?

Accepted Answer

A) The marginal productivity of capital is always increasing. 
B) The marginal productivity of capital is always constant. 
C) The marginal productivity of capital is always decreasing. 
D) The marginal productivity of capital increases, then decreases. 
A) The marginal productivity of capital is always increasing. 
B) The marginal productivity of capital is always constant. 
C) The marginal productivity of capital is always decreasing. 
D) The marginal productivity of capital increases, then decreases.

Question 6

The law of diminishing marginal returns states that as the use of all inputs increases, the marginal product of the inputs eventually declines.

Accepted Answer

A) True 
 B)False

Question 7

For a simple graph of a production function with Q on the y-axis and L on the x-axis, the slope of the production function at a specific point equals the marginal product of labor whereas the average slope of the production function equals the average product of labor.

Accepted Answer

A) True 
 B)False

Question 8

Total product hill is:

Accepted Answer

A) A single line graph that shows the relationship between the quantity of output and the quantity of one of two inputs employed by the firm 
B) A two-dimensional graph that shows the relationship between the quantity of output and the quantity of one of two inputs employed by the firm 
C) A three-dimensional graph that shows the relationship between the quantity of output and the quantity of the two inputs employed by the firm 
D) A four-dimensional graph that shows the relationship between the quantity of output and the quantity of the two inputs employed by the firm 
A) A single line graph that shows the relationship between the quantity of output and the quantity of one of two inputs employed by the firm 
B) A two-dimensional graph that shows the relationship between the quantity of output and the quantity of one of two inputs employed by the firm 
C) A three-dimensional graph that shows the relationship between the quantity of output and the quantity of the two inputs employed by the firm 
D) A four-dimensional graph that shows the relationship between the quantity of output and the quantity of the two inputs employed by the firm

Which one of these is false when compared to the relationship between marginal and average product?

Let a firm's production function be $Q = 100 ( a L + b K )$ . The production function then becomes $Q = 500 ( a L + b K )$ . Which of the following statements is true?

A type of production function that includes linear production functions, fixed-proportions production functions, and Cobb-Douglas production functions as special cases is:

The Cobb-Douglas production function is given by the general formula $Q = \mathrm { AL } ^ { \alpha } \mathrm { K } ^ { \beta }$ and the constant elasticity of substitution is equal to 0 .

=0 =1 =2 =3 =4 =0 0 0 0 0 0 =1 0 1 2 3 4 =2 0 8 16 24 32 =3 0 27 54 81 108 =4 0 64 128 192 256 -Based on the table above, holding labor constant, what do you notice about the marginal productivity of capital?

The law of diminishing marginal returns states that as the use of all inputs increases, the marginal product of the inputs eventually declines.

For a simple graph of a production function with Q on the y-axis and L on the x-axis, the slope of the production function at a specific point equals the marginal product of labor whereas the average slope of the production function equals the average product of labor.

Total product hill is:

Analyzing Economic Problems

Demand and Supply Analysis

Consumer Preferences and the Concept of Utility

Consumer Choice

The Theory of Demand

Costs and Cost Minimization

Cost Curves

Perfectly Competitive Markets

Competitive Markets: Applications

Monopoly and Monopsony

Capturing Surplus

Market Structure and Competition

Game Theory and Strategic Behavior

Risk and Information

General Equilibrium Theory

Externalities and Public Goods

Filters

Exam 6: Inputs and Production Functions

Which one of these is false when compared to the relationship between marginal and average product?

Let a firm's production function be Q=100(aL+bK)Q = 100 ( a L + b K )Q=100(aL+bK) . The production function then becomes Q=500(aL+bK)Q = 500 ( a L + b K )Q=500(aL+bK) . Which of the following statements is true?

A type of production function that includes linear production functions, fixed-proportions production functions, and Cobb-Douglas production functions as special cases is:

The Cobb-Douglas production function is given by the general formula Q=ALαKβQ = \mathrm { AL } ^ { \alpha } \mathrm { K } ^ { \beta }Q=ALαKβ and the constant elasticity of substitution is equal to 0 .

=0 =1 =2 =3 =4 =0 0 0 0 0 0 =1 0 1 2 3 4 =2 0 8 16 24 32 =3 0 27 54 81 108 =4 0 64 128 192 256 -Based on the table above, holding labor constant, what do you notice about the marginal productivity of capital?

The law of diminishing marginal returns states that as the use of all inputs increases, the marginal product of the inputs eventually declines.

For a simple graph of a production function with Q on the y-axis and L on the x-axis, the slope of the production function at a specific point equals the marginal product of labor whereas the average slope of the production function equals the average product of labor.

Total product hill is:

Analyzing Economic Problems

Demand and Supply Analysis

Consumer Preferences and the Concept of Utility

Consumer Choice

The Theory of Demand

Costs and Cost Minimization

Cost Curves

Perfectly Competitive Markets

Competitive Markets: Applications

Monopoly and Monopsony

Capturing Surplus

Market Structure and Competition

Game Theory and Strategic Behavior

Risk and Information

General Equilibrium Theory

Externalities and Public Goods

Filters

Let a firm's production function be $Q = 100 ( a L + b K )$ . The production function then becomes $Q = 500 ( a L + b K )$ . Which of the following statements is true?

The Cobb-Douglas production function is given by the general formula $Q = \mathrm { AL } ^ { \alpha } \mathrm { K } ^ { \beta }$ and the constant elasticity of substitution is equal to 0 .