Question 1

The traditional convex isoquant that is associated with agricultural production processes gets its shape from:

Accepted Answer

A)  constant substitutability of inputs 
B)  the diminishing returns in the production function 
C)  cost minimizing behavior of the firm 
D)  the complementarity of the production surface 
A)  constant substitutability of inputs 
B)  the diminishing returns in the production function 
C)  cost minimizing behavior of the firm 
D)  the complementarity of the production surface

Question 2

Flour (=X1, in lbs) and sugar (=X2, in lbs) are used to produce cookies (doz). The price of flour is P1=$1/lb, and the price of sugar is P2=$2/lb. Expenditures for the firm are equal to $20. Graph the isocost line, isoquant, and equilibrium for the cookie firm. A. If the price of sugar (P2) decreased to $1/lb, draw a graph to show how the equilibrium will change. Will the firm hire more or fewer workers? Explain why. B. Graph the optimal combination of the outputs Y1 = peanut butter cookies (doz) and Y2 = sugar cookies (doz) for the firm, and demonstrate the impact of an increase in the price of sugar cookies on the equilibrium quantity of PB and sugar cookies.

Accepted Answer

To graph the isocost line, isoquant, and

Question 3

Use graphical analysis to demonstrate the impact of an increase in the price of corn relative to the price of wheat. Find evidence that shows whether the predictions of the graph have occurred in the US or not.

Accepted Answer

To demonstrate the impact of an increase

Question 4

Agricultural firms will adjust the level of input use based on:

Accepted Answer

A)  changes in relative prices 
B)  changes in the absolute prices 
C)  increases in general inflation 
D)  management decisions based on inside information 
A)  changes in relative prices 
B)  changes in the absolute prices 
C)  increases in general inflation 
D)  management decisions based on inside information

Question 5

The marginal rate of technical substitution between two inputs in a single production process describes:

Accepted Answer

A)  the only combination of inputs that will produce a profit 
B)  every combination of inputs that will produce a profit 
C)  several combinations of inputs that will produce a profit 
D)  none of the other three answers 
A)  the only combination of inputs that will produce a profit 
B)  every combination of inputs that will produce a profit 
C)  several combinations of inputs that will produce a profit 
D)  none of the other three answers

Question 6

The cost minimizing combination of inputs can be found at:

Accepted Answer

A)  the tangency point of the isoquant and the isocost line. 
B)  the tangency point of the isoquant and the horizontal axis 
C)  the tangency point of the isoquant and the vertical axis 
D)  not enough information to know 
A)  the tangency point of the isoquant and the isocost line. 
B)  the tangency point of the isoquant and the horizontal axis 
C)  the tangency point of the isoquant and the vertical axis 
D)  not enough information to know

Question 7

If the price of land increases, ceteris paribus, producers will:

Accepted Answer

A)  find substitutes for land, when possible 
B)  keep doing the same thing 
C)  use more land, since it is more valuable 
D)  use more land, since banks will extend more credit 
A)  find substitutes for land, when possible 
B)  keep doing the same thing 
C)  use more land, since it is more valuable 
D)  use more land, since banks will extend more credit

Question 8

Isoquants increase in the level of output:

Accepted Answer

A)  left to right 
B)  low to high 
C)  both A and B 
D)  neither A nor B 
A)  left to right 
B)  low to high 
C)  both A and B 
D)  neither A nor B

Question 9

A typical isoquant is:

Accepted Answer

A)  convex to the origin, reflecting imperfect substitutes 
B)  concave to the origin, reflecting imperfect substitutes 
C)  convex to the origin, reflecting perfect substitutes 
D)  concave to the origin, reflecting perfect substitutes 
A)  convex to the origin, reflecting imperfect substitutes 
B)  concave to the origin, reflecting imperfect substitutes 
C)  convex to the origin, reflecting perfect substitutes 
D)  concave to the origin, reflecting perfect substitutes

Question 10

An isoquant cannot:

Accepted Answer

A)  be upward-sloping 
B)  be downward-sloping 
C)  be vertical 
D)  be horizontal 
A)  be upward-sloping 
B)  be downward-sloping 
C)  be vertical 
D)  be horizontal

Question 11

The massive substitution of capital for labor in US agriculture since World War II is due to:

Accepted Answer

A)  electrification of rural areas 
B)  relative prices 
C)  marginal decision making 
D)  an overreliance on technology in production agriculture 
A)  electrification of rural areas 
B)  relative prices 
C)  marginal decision making 
D)  an overreliance on technology in production agriculture

Question 12

Labor-intensive production techniques are most likely to be found in:

Accepted Answer

A)  high-income nations 
B)  middle-income nations 
C)  low-income nations 
D)  oil producing nations 
A)  high-income nations 
B)  middle-income nations 
C)  low-income nations 
D)  oil producing nations

Question 13

To determine the profit-maximizing level of production with two inputs, the manager must know:

Accepted Answer

A)  the slope of the relevant isocost line 
B)  the marginal rate of technical substitution and the price ratio 
C)  the marginal rate of technical substitution 
D)  the slope of the relevant isoquant line 
A)  the slope of the relevant isocost line 
B)  the marginal rate of technical substitution and the price ratio 
C)  the marginal rate of technical substitution 
D)  the slope of the relevant isoquant line

Question 14

Define and explain what an isoquant is.

Accepted Answer

An isoquant is a concept derived from mi

Question 15

If an isoquant intersects an isocost line at two points, a manager can surmise that:

Accepted Answer

A)  there is a lower isocost line where the isoquant will intersect at only one point 
B)  no least cost combination is possible 
C)  there are two choices of least-cost input combinations 
D)  none of the other three answers 
A)  there is a lower isocost line where the isoquant will intersect at only one point 
B)  no least cost combination is possible 
C)  there are two choices of least-cost input combinations 
D)  none of the other three answers

Question 16

In equilibrium:

Accepted Answer

A)  the slope of the isoquant is equal to the slope of the isocost line 
B)  the MRTS = price ratio 
C)  the cost-minimizing combination of inputs is purchased 
D)  all of the other three answers 
A)  the slope of the isoquant is equal to the slope of the isocost line 
B)  the MRTS = price ratio 
C)  the cost-minimizing combination of inputs is purchased 
D)  all of the other three answers

Question 17

Define and explain what an isocost line is.

Accepted Answer

An isocost line is a concept used in mic

Question 18

Graph the change in equilibria from the flour price increase, assuming that the bakery wants to maintain the same level of output.

Accepted Answer

To graph the change in equilibria from t

Question 19

Graph isoquants and give an example for: A. Perfect substitutes, B. Perfect complements, and C. Imperfect substitutes. Explain how relative price changes affect purchases of each type of input

Accepted Answer

Perfect substitutes refer to inputs that

Question 20

For US agriculture, labor may be substituted for capital in production, but labor:

Accepted Answer

A)  cannot be substituted for land 
B)  cannot be substituted for chemical inputs 
C)  cannot be substituted for machinery 
D)  none of the above 
A)  cannot be substituted for land 
B)  cannot be substituted for chemical inputs 
C)  cannot be substituted for machinery 
D)  none of the above

The traditional convex isoquant that is associated with agricultural production processes gets its shape from:

Use graphical analysis to demonstrate the impact of an increase in the price of corn relative to the price of wheat. Find evidence that shows whether the predictions of the graph have occurred in the US or not.

Agricultural firms will adjust the level of input use based on:

The marginal rate of technical substitution between two inputs in a single production process describes:

The cost minimizing combination of inputs can be found at:

If the price of land increases, ceteris paribus, producers will:

Isoquants increase in the level of output:

A typical isoquant is:

An isoquant cannot:

The massive substitution of capital for labor in US agriculture since World War II is due to:

Labor-intensive production techniques are most likely to be found in:

To determine the profit-maximizing level of production with two inputs, the manager must know:

Define and explain what an isoquant is.

If an isoquant intersects an isocost line at two points, a manager can surmise that:

In equilibrium:

Define and explain what an isocost line is.

Graph the change in equilibria from the flour price increase, assuming that the bakery wants to maintain the same level of output.

Graph isoquants and give an example for: A. Perfect substitutes, B. Perfect complements, and C. Imperfect substitutes. Explain how relative price changes affect purchases of each type of input

For US agriculture, labor may be substituted for capital in production, but labor:

Introduction to the Economics of Agriculture

The Economics of Production

The Costs of Production

Profit Maximization

Optimal Output 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 5: Optimal Input Selection

The traditional convex isoquant that is associated with agricultural production processes gets its shape from:

Use graphical analysis to demonstrate the impact of an increase in the price of corn relative to the price of wheat. Find evidence that shows whether the predictions of the graph have occurred in the US or not.

Agricultural firms will adjust the level of input use based on:

The marginal rate of technical substitution between two inputs in a single production process describes:

The cost minimizing combination of inputs can be found at:

If the price of land increases, ceteris paribus, producers will:

Isoquants increase in the level of output:

A typical isoquant is:

An isoquant cannot:

The massive substitution of capital for labor in US agriculture since World War II is due to:

Labor-intensive production techniques are most likely to be found in:

To determine the profit-maximizing level of production with two inputs, the manager must know:

Define and explain what an isoquant is.

If an isoquant intersects an isocost line at two points, a manager can surmise that:

In equilibrium:

Define and explain what an isocost line is.

Graph the change in equilibria from the flour price increase, assuming that the bakery wants to maintain the same level of output.

Graph isoquants and give an example for: A. Perfect substitutes, B. Perfect complements, and C. Imperfect substitutes. Explain how relative price changes affect purchases of each type of input

For US agriculture, labor may be substituted for capital in production, but labor:

Introduction to the Economics of Agriculture

The Economics of Production

The Costs of Production

Profit Maximization

Optimal Output 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