Question 1

Cobb-Douglas production functions can never possess varying returns to scale.

Accepted Answer

A) True 
 B)False  True

Question 2

The above figure shows the isoquants for the production of steel.In which regions of production are there increasing,decreasing,and constant returns to scale?

Accepted Answer

When output is less than 10,000 tons,there are increasing returns to scale.Between 10,000 and 20,000 tons,there are constant returns to scale.For output greater than 20,000 tons,there are decreasing returns to scale.
5.5 Productivity and Technological Change

Question 3

-The above figure shows the short-run production function for Albert's Pretzels.The marginal product of labor equals the average product of labor

Accepted Answer

A)  for all levels of labor. 
B)  at none of the levels of labor. 
C)  only for the first worker. 
D)  only for the fifth worker. 
A)  for all levels of labor. 
B)  at none of the levels of labor. 
C)  only for the first worker. 
D)  only for the fifth worker. C

Question 4

-According to the table above,paper product production exhibits

Accepted Answer

A)  decreasing returns to scale. 
B)  constant returns to scale. 
C)  increasing returns to scale. 
D)  varying returns to scale. 
A)  decreasing returns to scale. 
B)  constant returns to scale. 
C)  increasing returns to scale. 
D)  varying returns to scale.

Question 5

Isoquants that are downward-sloping straight lines imply that the inputs

Accepted Answer

A)  are perfect substitutes. 
B)  are imperfect substitutes. 
C)  cannot be used together. 
D)  must be used together in a certain proportion. 
A)  are perfect substitutes. 
B)  are imperfect substitutes. 
C)  cannot be used together. 
D)  must be used together in a certain proportion.

Question 6

A factor of production that cannot be easily changed in the relevant time period is called a

Accepted Answer

A)  short-run factor. 
B)  fixed input. 
C)  variable input. 
D)  production anchor. 
A)  short-run factor. 
B)  fixed input. 
C)  variable input. 
D)  production anchor.

Question 7

Joey cuts lawns during the summer.Let q equal the number of acres mowed per day,and let L equal the number of hours worked per day.Joey never works more than eight hours per day,and during that time his short-run production function is q = 0.2 ∗ L.Which of the following statements is FALSE?

Accepted Answer

A)  Joey's marginal product equals his average product. 
B)  Joey's marginal product diminishes by 0.2 for each additional hour worked. 
C)  Joey's average product is constant. 
D)  Joey's marginal product is constant. 
A)  Joey's marginal product equals his average product. 
B)  Joey's marginal product diminishes by 0.2 for each additional hour worked. 
C)  Joey's average product is constant. 
D)  Joey's marginal product is constant.

Question 8

Which of the following statements best summarizes the law of diminishing marginal returns?

Accepted Answer

A)  In the short run, as more labor is hired, output diminishes. 
B)  In the short run, as more labor is hired, output increases at a diminishing rate. 
C)  In the short run, the amount of labor a firm will hire diminishes as output increases. 
D)  As more labor is hired, the length of time that defines the short run diminishes. 
A)  In the short run, as more labor is hired, output diminishes. 
B)  In the short run, as more labor is hired, output increases at a diminishing rate. 
C)  In the short run, the amount of labor a firm will hire diminishes as output increases. 
D)  As more labor is hired, the length of time that defines the short run diminishes.

Question 9

To say that isoquants are convex is to say that

Accepted Answer

A)  the marginal rate of technical substitution falls as labor increases. 
B)  capital and labor are perfect substitutes. 
C)  labor, but not capital, is subject to the law of diminishing marginal returns. 
D)  there are constant returns to scale. 
A)  the marginal rate of technical substitution falls as labor increases. 
B)  capital and labor are perfect substitutes. 
C)  labor, but not capital, is subject to the law of diminishing marginal returns. 
D)  there are constant returns to scale.

Question 10

The law of diminishing marginal returns

Accepted Answer

A)  implies that the marginal product of labor must fall. 
B)  requires using superior technology to increase output. 
C)  means that total output will always fall. 
D)  None of the above. 
A)  implies that the marginal product of labor must fall. 
B)  requires using superior technology to increase output. 
C)  means that total output will always fall. 
D)  None of the above.

Question 11

Over a five-year span,the ABC Co.reduced the amount of labor it hired.At the same time,the marginal productivity of labor increased.Which of the following COULD explain this observation?

Accepted Answer

A)  the law of diminishing marginal returns 
B)  labor saving technical change 
C)  organizational innovation 
D)  All of the above. 
A)  the law of diminishing marginal returns 
B)  labor saving technical change 
C)  organizational innovation 
D)  All of the above.

Question 12

The steeper an isoquant is

Accepted Answer

A)  the greater is the marginal product of labor relative to that of the marginal product of capital. 
B)  the greater is the substitutability between capital and labor. 
C)  the greater is the need to keep capital and labor in fixed proportions. 
D)  the greater is the level of output. 
A)  the greater is the marginal product of labor relative to that of the marginal product of capital. 
B)  the greater is the substitutability between capital and labor. 
C)  the greater is the need to keep capital and labor in fixed proportions. 
D)  the greater is the level of output.

Question 13

Firms in the same industry

Accepted Answer

A)  are equally productive, in the sense that if they are operating efficiently, they all produce the same output. 
B)  are not necessarily equally productive, in the sense that if they are all operating efficiently, they may not produce the same output. 
C)  all have access to the same technologies and inventions and therefore produce the same output from the same inputs. 
D)  are directed by government regulations to produce the same levels of output. 
A)  are equally productive, in the sense that if they are operating efficiently, they all produce the same output. 
B)  are not necessarily equally productive, in the sense that if they are all operating efficiently, they may not produce the same output. 
C)  all have access to the same technologies and inventions and therefore produce the same output from the same inputs. 
D)  are directed by government regulations to produce the same levels of output.

Question 14

Which of the following is likely to have the shortest long run?

Accepted Answer

A)  a nail salon 
B)  a construction firm 
C)  an electric company 
D)  a container ship operations company 
A)  a nail salon 
B)  a construction firm 
C)  an electric company 
D)  a container ship operations company

Question 15

The marginal rate of technical substitution shows

Accepted Answer

A)  how many machines can be replaced by computers, keeping output constant. 
B)  how many computers are needed to replace workers so that output can increase. 
C)  the rate at which technology advances change marginal productivity. 
D)  how many workers can do the job of one computer, keeping output constant. 
A)  how many machines can be replaced by computers, keeping output constant. 
B)  how many computers are needed to replace workers so that output can increase. 
C)  the rate at which technology advances change marginal productivity. 
D)  how many workers can do the job of one computer, keeping output constant.

Question 16

Suppose the production of DVD players can be represented by the following production function: q =     .Which of the following statements is (are)TRUE?

Accepted Answer

A)  The production function has decreasing returns to scale. 
B)  The marginal productivity of labor falls as labor increases in the short run. 
C)  Capital and labor can be substituted for one another. 
D)  All of the above. 
A)  The production function has decreasing returns to scale. 
B)  The marginal productivity of labor falls as labor increases in the short run. 
C)  Capital and labor can be substituted for one another. 
D)  All of the above.

Question 17

The Marginal Product of Labor is

Accepted Answer

A)  the change in total product resulting from an extra unit of labor, holding other factors constant. 
B)  the ratio of output to the number of workers used to produce that output. 
C)  the amount of output that can be produced by a given amount of labor. 
D)  equal to the marginal product of labor when the average product is increasing. 
A)  the change in total product resulting from an extra unit of labor, holding other factors constant. 
B)  the ratio of output to the number of workers used to produce that output. 
C)  the amount of output that can be produced by a given amount of labor. 
D)  equal to the marginal product of labor when the average product is increasing.

Question 18

Which of the following is least likely to be considered an input to production?

Accepted Answer

A)  a supervisor's time 
B)  an integrated circuit fabrication plant 
C)  wind 
D)  None of the above. 
A)  a supervisor's time 
B)  an integrated circuit fabrication plant 
C)  wind 
D)  None of the above.

Question 19

The slope of an isoquant tells us

Accepted Answer

A)  how much output increases when both inputs are increased. 
B)  the increase in   when capital increases. 
C)  the decrease in capital necessary to keep output constant when labor increases by one unit. 
D)  the decrease in capital necessary to keep   constant when labor increases by one unit. 
A)  how much output increases when both inputs are increased. 
B)  the increase in   when capital increases. 
C)  the decrease in capital necessary to keep output constant when labor increases by one unit. 
D)  the decrease in capital necessary to keep   constant when labor increases by one unit.

Question 20

Let the production function be q=ALᵃKᵇ.The function exhibits increasing returns to scale if

Accepted Answer

A) a + b = 1. B) a + b > 1. C) a + b < 1. D) Cannot be determined with the information given. A) a + b = 1. B) a + b > 1. C) a + b < 1. D) Cannot be determined with the information given.

Cobb-Douglas production functions can never possess varying returns to scale.

The above figure shows the isoquants for the production of steel.In which regions of production are there increasing,decreasing,and constant returns to scale?

-The above figure shows the short-run production function for Albert's Pretzels.The marginal product of labor equals the average product of labor

-According to the table above,paper product production exhibits

Isoquants that are downward-sloping straight lines imply that the inputs

A factor of production that cannot be easily changed in the relevant time period is called a

Joey cuts lawns during the summer.Let q equal the number of acres mowed per day,and let L equal the number of hours worked per day.Joey never works more than eight hours per day,and during that time his short-run production function is q = 0.2 ∗ L.Which of the following statements is FALSE?

Which of the following statements best summarizes the law of diminishing marginal returns?

To say that isoquants are convex is to say that

The law of diminishing marginal returns

Over a five-year span,the ABC Co.reduced the amount of labor it hired.At the same time,the marginal productivity of labor increased.Which of the following COULD explain this observation?

The steeper an isoquant is

Firms in the same industry

Which of the following is likely to have the shortest long run?

The marginal rate of technical substitution shows

Suppose the production of DVD players can be represented by the following production function: q = .Which of the following statements is (are)TRUE?

The Marginal Product of Labor is

Which of the following is least likely to be considered an input to production?

The slope of an isoquant tells us

Let the production function be q=ALᵃKᵇ.The function exhibits increasing returns to scale if

Introduction

Supply and Demand

Empirical Methods for Demand Analysis

Consumer Choice

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Game Theory and Business Strategy

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters

Exam 5: Production

Cobb-Douglas production functions can never possess varying returns to scale.

The above figure shows the isoquants for the production of steel.In which regions of production are there increasing,decreasing,and constant returns to scale?

-The above figure shows the short-run production function for Albert's Pretzels.The marginal product of labor equals the average product of labor

-According to the table above,paper product production exhibits

Isoquants that are downward-sloping straight lines imply that the inputs

A factor of production that cannot be easily changed in the relevant time period is called a

Joey cuts lawns during the summer.Let q equal the number of acres mowed per day,and let L equal the number of hours worked per day.Joey never works more than eight hours per day,and during that time his short-run production function is q = 0.2 ∗ L.Which of the following statements is FALSE?

Which of the following statements best summarizes the law of diminishing marginal returns?

To say that isoquants are convex is to say that

The law of diminishing marginal returns

Over a five-year span,the ABC Co.reduced the amount of labor it hired.At the same time,the marginal productivity of labor increased.Which of the following COULD explain this observation?

The steeper an isoquant is

Firms in the same industry

Which of the following is likely to have the shortest long run?

The marginal rate of technical substitution shows

Suppose the production of DVD players can be represented by the following production function: q = .Which of the following statements is (are)TRUE?

The Marginal Product of Labor is

Which of the following is least likely to be considered an input to production?

The slope of an isoquant tells us

Let the production function be q=ALᵃKᵇ.The function exhibits increasing returns to scale if

Introduction

Supply and Demand

Empirical Methods for Demand Analysis

Consumer Choice

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Game Theory and Business Strategy

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters