Question 1

If the price of an output increases, ceteris paribus:

Accepted Answer

A)  producers will substitute into the production of that good 
B)  producers will substitute out of the production of that good 
C)  there will be no change 
D)  not enough information to answer 
A)  producers will substitute into the production of that good 
B)  producers will substitute out of the production of that good 
C)  there will be no change 
D)  not enough information to answer

Question 2

The isorevenue line is:

Accepted Answer

A)  a line depicting all combinations of two inputs that yield a constant level of costs 
B)  a line depicting all combinations of two outputs that yield a constant level of costs 
C)  a line depicting all combinations of two inputs that yield a constant level of revenues 
D)  a line depicting all combinations of two outputs that yield a constant level of revenues 
A)  a line depicting all combinations of two inputs that yield a constant level of costs 
B)  a line depicting all combinations of two outputs that yield a constant level of costs 
C)  a line depicting all combinations of two inputs that yield a constant level of revenues 
D)  a line depicting all combinations of two outputs that yield a constant level of revenues

Question 3

Define and explain MRPS carefully.

Accepted Answer

MRPS, or Marginal Rate of Product Substi

Question 4

An isorevenue line is:

Accepted Answer

A)  convex to the origin 
B)  concave to the origin 
C)  horizontal 
D)  linear 
A)  convex to the origin 
B)  concave to the origin 
C)  horizontal 
D)  linear

Question 5

To determine the revenue-maximizing combination of outputs to produce, a manager must know:

Accepted Answer

A)  the MRPS and the input price ratio 
B)  the Marginal Rate of Product Substitution (MRPS) and the PPF 
C)  the Marginal Rate of Product Substitution (MRPS) and the product price ratio 
D)  the production possibilities frontier and the input prices 
A)  the MRPS and the input price ratio 
B)  the Marginal Rate of Product Substitution (MRPS) and the PPF 
C)  the Marginal Rate of Product Substitution (MRPS) and the product price ratio 
D)  the production possibilities frontier and the input prices

Question 6

A Production Possibilities Frontier is:

Accepted Answer

A)  all combinations of two inputs that produce the same level of output 
B)  all combinations of two outputs that produce the same level of input 
C)  all combinations of two inputs that can be purchased at the same cost 
D)  all combinations of two outputs that can be produced with fixed inputs 
A)  all combinations of two inputs that produce the same level of output 
B)  all combinations of two outputs that produce the same level of input 
C)  all combinations of two inputs that can be purchased at the same cost 
D)  all combinations of two outputs that can be produced with fixed inputs

Question 7

Use graphical analysis to show the impact of the large increase in the price of soybeans on the production of: A. Corn, and B. Soybeans.

Accepted Answer

To analyze the impact of the large incre

Question 8

The slope of the Production Possibilities Frontier is:

Accepted Answer

A)  the price ratio 
B)  the Marginal Rate of Product Substitution (MRPS) 
C)  the Marginal Rate of Technical Substitution (MRTS) 
D)  the law of diminishing returns 
A)  the price ratio 
B)  the Marginal Rate of Product Substitution (MRPS) 
C)  the Marginal Rate of Technical Substitution (MRTS) 
D)  the law of diminishing returns

Question 9

For a farm producing two crops and operating on the Production Possibilities Frontier (curve) where revenue is maximized, a reduction in the price of one crop will:

Accepted Answer

A)  shift the Production Possibilities Frontier (curve) inward 
B)  shift the isorevenue line outward 
C)  increase the costs of production 
D)  none of the other answers 
A)  shift the Production Possibilities Frontier (curve) inward 
B)  shift the isorevenue line outward 
C)  increase the costs of production 
D)  none of the other answers

Question 10

A change in relative prices will affect the:

Accepted Answer

A)  PPF 
B)  isorevenue line 
C)  MRPS 
D)  rate of technological change 
A)  PPF 
B)  isorevenue line 
C)  MRPS 
D)  rate of technological change

Question 11

Movements along a Production Possibilities Frontier (curve) are an indication of:

Accepted Answer

A)  the change in efficient production levels 
B)  none of the other three answers 
C)  all points of equal marginal rates of substitution 
D)  opportunity cost between production and two inputs 
A)  the change in efficient production levels 
B)  none of the other three answers 
C)  all points of equal marginal rates of substitution 
D)  opportunity cost between production and two inputs

Question 12

The PPF is:

Accepted Answer

A)  concave to the origin 
B)  convex to the origin 
C)  none of the other three answers 
D)  of constant slope 
A)  concave to the origin 
B)  convex to the origin 
C)  none of the other three answers 
D)  of constant slope

Question 13

The Production Possibilities Frontier (curve) represents all possible combinations of two products:

Accepted Answer

A)  that can be produced with the same set of resources 
B)  for which the opportunity costs are equal 
C)  that are supplementary in relationship 
D)  that will yield the same total revenues 
A)  that can be produced with the same set of resources 
B)  for which the opportunity costs are equal 
C)  that are supplementary in relationship 
D)  that will yield the same total revenues

Question 14

The opportunity cost of a resource tells a manager:

Accepted Answer

A)  the amount by which one output must be reduced when another output is increased for a given set of resources 
B)  the amount by which the fixed cost of one product will decline with a given set of resources 
C)  the amount of output possible for all given sets of resources available 
D)  none of the other three answers 
A)  the amount by which one output must be reduced when another output is increased for a given set of resources 
B)  the amount by which the fixed cost of one product will decline with a given set of resources 
C)  the amount of output possible for all given sets of resources available 
D)  none of the other three answers

Question 15

If all resources are used to produce a single output, then:

Accepted Answer

A)  the firm is located on the PPF 
B)  the firm is located inside of the PPF 
C)  the firm is located outside of the PPF 
D)  none of the other answers 
A)  the firm is located on the PPF 
B)  the firm is located inside of the PPF 
C)  the firm is located outside of the PPF 
D)  none of the other answers

Question 16

The MRPS is:

Accepted Answer

A)  the rate at that one input must be decreased as production of the other input is increased 
B)  the rate at that one output must be decreased as production of the other output is increased 
C)  the slope of the isorevenue line 
D)  the slope of the isoquant 
A)  the rate at that one input must be decreased as production of the other input is increased 
B)  the rate at that one output must be decreased as production of the other output is increased 
C)  the slope of the isorevenue line 
D)  the slope of the isoquant

Question 17

Technological change will affect the:

Accepted Answer

A)  PPF 
B)  isorevenue line 
C)  MRPS 
D)  relative prices 
A)  PPF 
B)  isorevenue line 
C)  MRPS 
D)  relative prices

Question 18

Technological change in the good located on the vertical axis (Y2):

Accepted Answer

A)  shifts the PPF out symmetrically 
B)  shifts the PPF out to the right 
C)  shifts the PPF up 
D)  keeps the PPF constant 
A)  shifts the PPF out symmetrically 
B)  shifts the PPF out to the right 
C)  shifts the PPF up 
D)  keeps the PPF constant

Question 19

A Production Possibilities Frontier (curve) represents:

Accepted Answer

A)  how much wheat can be produced in the US in a given year 
B)  all combinations of two outputs that can be produced with a varying level of inputs 
C)  all combinations of two inputs that can be used in the production of outputs 
D)  all combinations of two outputs that can be produced with a fixed level of resources 
A)  how much wheat can be produced in the US in a given year 
B)  all combinations of two outputs that can be produced with a varying level of inputs 
C)  all combinations of two inputs that can be used in the production of outputs 
D)  all combinations of two outputs that can be produced with a fixed level of resources

Question 20

The Marginal Rate of Product Substitution (MRPS) tells a manager:

Accepted Answer

A)  the amount by which one output must be reduced when another output is increased for a given set of resources 
B)  the amount by which the opportunity cost of one product will decline with a given set of resources 
C)  the amount of output possible for all given sets of resources available 
D)  none of the other three answers 
A)  the amount by which one output must be reduced when another output is increased for a given set of resources 
B)  the amount by which the opportunity cost of one product will decline with a given set of resources 
C)  the amount of output possible for all given sets of resources available 
D)  none of the other three answers

If the price of an output increases, ceteris paribus:

The isorevenue line is:

Define and explain MRPS carefully.

An isorevenue line is:

To determine the revenue-maximizing combination of outputs to produce, a manager must know:

A Production Possibilities Frontier is:

Use graphical analysis to show the impact of the large increase in the price of soybeans on the production of: A. Corn, and B. Soybeans.

The slope of the Production Possibilities Frontier is:

For a farm producing two crops and operating on the Production Possibilities Frontier (curve) where revenue is maximized, a reduction in the price of one crop will:

A change in relative prices will affect the:

Movements along a Production Possibilities Frontier (curve) are an indication of:

The PPF is:

The Production Possibilities Frontier (curve) represents all possible combinations of two products:

The opportunity cost of a resource tells a manager:

If all resources are used to produce a single output, then:

The MRPS is:

Technological change will affect the:

Technological change in the good located on the vertical axis (Y₂):

A Production Possibilities Frontier (curve) represents:

The Marginal Rate of Product Substitution (MRPS) tells a manager:

Introduction to the Economics of Agriculture

The Economics of Production

The Costs of Production

Profit Maximization

Optimal Input Selection

Supply

Supply

Demand

Markets

Government Policies

The Competitive Firm

Market Power

Agriculture and the Global Economy

Economics, Agriculture, and the Environment

Agribusiness Management

Filters

Exam 6: Optimal Output Selection

If the price of an output increases, ceteris paribus:

The isorevenue line is:

Define and explain MRPS carefully.

An isorevenue line is:

To determine the revenue-maximizing combination of outputs to produce, a manager must know:

A Production Possibilities Frontier is:

Use graphical analysis to show the impact of the large increase in the price of soybeans on the production of: A. Corn, and B. Soybeans.

The slope of the Production Possibilities Frontier is:

For a farm producing two crops and operating on the Production Possibilities Frontier (curve) where revenue is maximized, a reduction in the price of one crop will:

A change in relative prices will affect the:

Movements along a Production Possibilities Frontier (curve) are an indication of:

The PPF is:

The Production Possibilities Frontier (curve) represents all possible combinations of two products:

The opportunity cost of a resource tells a manager:

If all resources are used to produce a single output, then:

The MRPS is:

Technological change will affect the:

Technological change in the good located on the vertical axis (Y2):

A Production Possibilities Frontier (curve) represents:

The Marginal Rate of Product Substitution (MRPS) tells a manager:

Introduction to the Economics of Agriculture

The Economics of Production

The Costs of Production

Profit Maximization

Optimal Input Selection

Supply

Supply

Demand

Markets

Government Policies

The Competitive Firm

Market Power

Agriculture and the Global Economy

Economics, Agriculture, and the Environment

Agribusiness Management

Filters

Technological change in the good located on the vertical axis (Y₂):