Question 1

The production function Q = -64X0.5Y0.4 exhibits:

Accepted Answer

A) constant returns to scale. 
B) increasing returns to scale. 
C) diminishing returns to scale. 
D) increasing and then diminishing returns to scale. 
A) constant returns to scale. 
B) increasing returns to scale. 
C) diminishing returns to scale. 
D) increasing and then diminishing returns to scale. C

Question 2

An irrational employment policy is indicated if the marginal product of a costly input is:

Accepted Answer

A) positive. 
B) zero. 
C) less than the marginal product of Y. 
D) falling. 
A) positive. 
B) zero. 
C) less than the marginal product of Y. 
D) falling. B

Question 3

Technical efficiency and optimal input proportions are found when:

Accepted Answer

A) MPX/PY = MPY/PX. 
B) PX/PY = MPY/MPX. 
C) MRPX = MRPY. 
D) none of these. 
A) MPX/PY = MPY/PX. 
B) PX/PY = MPY/MPX. 
C) MRPX = MRPY. 
D) none of these. D

Question 4

For a continuous total product function, average product equals the:

Accepted Answer

A) inflection point of the total product curve. 
B) inflection point of the average product curve. 
C) slope of a line drawn from the origin to a point on the total product curve. 
D) slope of the total product curve. 
A) inflection point of the total product curve. 
B) inflection point of the average product curve. 
C) slope of a line drawn from the origin to a point on the total product curve. 
D) slope of the total product curve.

Question 5

The marginal revenue product concept describes the:

Accepted Answer

A) profit gained through expanding employment. 
B) breakeven profit level. 
C) added revenue from expanding employment. 
D) cost of expanding employment. 
A) profit gained through expanding employment. 
B) breakeven profit level. 
C) added revenue from expanding employment. 
D) cost of expanding employment.

Question 6

If PX = €75,000, MPX = 300 and MRQ = €250, the firm would like to:

Accepted Answer

A) expand employment. 
B) neither expand nor shrink employment. 
C) shrink employment. 
D) none of these. 
A) expand employment. 
B) neither expand nor shrink employment. 
C) shrink employment. 
D) none of these.

Question 7

Economic efficiency and optimal input use is found when:

Accepted Answer

A) MPX/PY = MPY/PX. 
B) PX/PY = MPX/MPY. 
C) MRPX = MRPY. 
D) none of these. 
A) MPX/PY = MPY/PX. 
B) PX/PY = MPX/MPY. 
C) MRPX = MRPY. 
D) none of these.

Question 8

The law of diminishing returns implies that:

Accepted Answer

A) a given percentage increase in all inputs leads to that same percentage increase in output. 
B) the proportional increase in output is larger than the underlying proportional increase in inputs. 
C) output increases at a rate less than the proportionate increase in inputs. 
D) none of these. 
A) a given percentage increase in all inputs leads to that same percentage increase in output. 
B) the proportional increase in output is larger than the underlying proportional increase in inputs. 
C) output increases at a rate less than the proportionate increase in inputs. 
D) none of these.

Question 9

When PX = €50, MPX = 5 and MPY = 2, relative employment levels are optimal provided:

Accepted Answer

A) PY = €25. 
B) PY = €20. 
C) PY = €10. 
D) PY = €2.50. 
A) PY = €25. 
B) PY = €20. 
C) PY = €10. 
D) PY = €2.50.

Question 10

If PX = €60,000, MPX = 300 and MRQ = €250, the marginal revenue product of X equals:

Accepted Answer

A) €75,000. 
B) 300. 
C) €250. 
D) €60,000. 
A) €75,000. 
B) 300. 
C) €250. 
D) €60,000.

The production function Q = -64X0.5Y0.4 exhibits:

An irrational employment policy is indicated if the marginal product of a costly input is:

Technical efficiency and optimal input proportions are found when:

For a continuous total product function, average product equals the:

The marginal revenue product concept describes the:

If PX = €75,000, MPX = 300 and MRQ = €250, the firm would like to:

Economic efficiency and optimal input use is found when:

The law of diminishing returns implies that:

When PX = €50, MPX = 5 and MPY = 2, relative employment levels are optimal provided:

If PX = €60,000, MPX = 300 and MRQ = €250, the marginal revenue product of X equals:

Nature and Scope of Managerial Economics

Economic Optimization

Demand and Supply

Demand Analysis

Demand Estimation

Forecasting

Cost Analysis and Estimation

Linear Programming

Competitive Markets

Performance and Strategy in Competitive Markets

Monopoly and Monopsony

Monopolistic Competition and Oligopoly

Game Theory and Competitive Strategy

Pricing Practices

Risk Analysis

Capital Budgeting

Organization Structure and Corporate Governance

Government in the Market Economy

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Exam 7: Production Analysis and Compensation Policy

The production function Q = -64X0.5Y0.4 exhibits:

An irrational employment policy is indicated if the marginal product of a costly input is:

Technical efficiency and optimal input proportions are found when:

For a continuous total product function, average product equals the:

The marginal revenue product concept describes the:

If PX = €75,000, MPX = 300 and MRQ = €250, the firm would like to:

Economic efficiency and optimal input use is found when:

The law of diminishing returns implies that:

When PX = €50, MPX = 5 and MPY = 2, relative employment levels are optimal provided:

If PX = €60,000, MPX = 300 and MRQ = €250, the marginal revenue product of X equals:

Nature and Scope of Managerial Economics

Economic Optimization

Demand and Supply

Demand Analysis

Demand Estimation

Forecasting

Cost Analysis and Estimation

Linear Programming

Competitive Markets

Performance and Strategy in Competitive Markets

Monopoly and Monopsony

Monopolistic Competition and Oligopoly

Game Theory and Competitive Strategy

Pricing Practices

Risk Analysis

Capital Budgeting

Organization Structure and Corporate Governance

Government in the Market Economy

Filters