Question 1

What is the marginal cost of producing 90 units of output?

Accepted Answer

A) 5.32. 
B) 8.75. 
C) 11.67. 
D) 21.00. 
A) 5.32. 
B) 8.75. 
C) 11.67. 
D) 21.00.

Question 2

For given input prices, isocosts farther from the origin are associated with

Accepted Answer

A) lower costs. 
B) the same costs. 
C) higher costs. 
D) initially lower then higher costs. 
A) lower costs. 
B) the same costs. 
C) higher costs. 
D) initially lower then higher costs.

Question 3

The absolute value of the slope of the isoquant is the:

Accepted Answer

A) Marginal rate of technical substitution. 
B) Marginal product of capital. 
C) Marginal rate of substitution. 
D) Value marginal product of labor. 
A) Marginal rate of technical substitution. 
B) Marginal product of capital. 
C) Marginal rate of substitution. 
D) Value marginal product of labor.

Question 4

Given the linear production function Q = 10K + 5L, if Q = 10,000 and K = 500, how much labor is utilized?

Accepted Answer

A) 600 units. 
B) 800 units. 
C) 500 units. 
D) 1000 units. 
A) 600 units. 
B) 800 units. 
C) 500 units. 
D) 1000 units.

Question 5

Which of the following is not a means of acquiring product and process innovations?

Accepted Answer

A) Independent research and development. 
B) Mass production of the existing product. 
C) Reverse engineering. 
D) Hiring employees of innovating firms. 
A) Independent research and development. 
B) Mass production of the existing product. 
C) Reverse engineering. 
D) Hiring employees of innovating firms.

Question 6

Suppose the production function is given by Q = 3K + 4L.What is the average product of capital when 10 units of capital and 10 units of labor are employed?

Accepted Answer

A) 3. 
B) 4. 
C) 7. 
D) 45. 
A) 3. 
B) 4. 
C) 7. 
D) 45.

Question 7

Suppose the cost function is C(Q) = 50 + Q - 10Q2 + 2Q3.At 10 units of output, the average cost curve is

Accepted Answer

A) in the increasing stage. 
B) in the declining stage. 
C) at the minimum level. 
D) at the maximum level. 
A) in the increasing stage. 
B) in the declining stage. 
C) at the minimum level. 
D) at the maximum level.

Question 8

Suppose the production function is given by Q = 3K + 4L.What is the marginal product of capital when 10 units of capital and 10 units of labor are employed?

Accepted Answer

A) 3. 
B) 4. 
C) 11. 
D) 45. 
A) 3. 
B) 4. 
C) 11. 
D) 45.

Question 9

At what level of output is marginal cost minimized:

Accepted Answer

A) 90. 
B) 50. 
C) 125. 
D) 160. 
A) 90. 
B) 50. 
C) 125. 
D) 160.

Question 10

For a cost function C = 100 + 10Q + Q2, the average variable cost of producing 20 units of output is

Accepted Answer

A) 10. 
B) 20. 
C) 30. 
D) none of the statements associated with this question are correct. 
A) 10. 
B) 20. 
C) 30. 
D) none of the statements associated with this question are correct.

Question 11

For the cost function C(Q) = 75 + 4Q + 2Q2, the marginal cost of producing 5 units of output is

Accepted Answer

A) 4. 
B) 54. 
C) 20. 
D) 24. 
A) 4. 
B) 54. 
C) 20. 
D) 24.

Question 12

If the production function is Q = K.5L.5 and capital is fixed at 1 unit, then the average product of labor when L = 25 is

Accepted Answer

A) 2/5. 
B) 1/5. 
C) 10. 
D) none of the statements associated with this question are correct. 
A) 2/5. 
B) 1/5. 
C) 10. 
D) none of the statements associated with this question are correct.

Question 13

As the usage of an input increases, marginal product

Accepted Answer

A) initially increases then begins to decline. 
B) initially decreases then begins to increase. 
C) consistently decreases. 
D) consistently increases. 
A) initially increases then begins to decline. 
B) initially decreases then begins to increase. 
C) consistently decreases. 
D) consistently increases.

Question 14

If the last unit of input increases total product we know that the marginal product is:

Accepted Answer

A) positive. 
B) negative. 
C) zero. 
D) indeterminate. 
A) positive. 
B) negative. 
C) zero. 
D) indeterminate.

Question 15

The following table summarizes the short-run production function for your firm.Your product sells for $5 per unit, labor costs $5 per unit, and the rental price of capital is $20 per unit.Complete the following table, and then answer the accompanying questions.

Accepted Answer

@#IMG-DLM& a.Which inputs are fixed inputs? Which

Question 16

The production function for a competitive firm is Q = K.5L.5.The firm sells its output at a price of $10, and can hire labor at a wage of $5.Capital is fixed at one unit.The profit-maximizing quantity of labor is

Accepted Answer

A) 2/5. 
B) 1. 
C) 10. 
D) none of the statements associated with this question are correct. 
A) 2/5. 
B) 1. 
C) 10. 
D) none of the statements associated with this question are correct.

Question 17

If a firm is operating on the production function, then workers

Accepted Answer

A) must be putting forth maximal effort. 
B) may not be putting forth maximal effort. 
C) are usually putting forth average effort. 
D) are usually putting forth minimal effort. 
A) must be putting forth maximal effort. 
B) may not be putting forth maximal effort. 
C) are usually putting forth average effort. 
D) are usually putting forth minimal effort.

Question 18

Which of the following cost functions exhibits cost complementarity?

Accepted Answer

A) -3Q2 + 4Q1. 
B) 5Q1Q2 - Q1. 
C) Q2Q1 + 2Q1. 
D) -5Q1Q2 + 7Q1. 
A) -3Q2 + 4Q1. 
B) 5Q1Q2 - Q1. 
C) Q2Q1 + 2Q1. 
D) -5Q1Q2 + 7Q1.

Question 19

Congress is considering legislation that will provide additional investment tax credits to businesses.Effectively, an investment tax credit reduces the cost to firms of using capital in production.Would you expect labor unions to lobby for or against such a bill? (Hint: What impact would such a plan have on the capital-to-labor ratio at the typical firm?)

Accepted Answer

An investment tax credit would reduce th

Question 20

You have been hired to replace the manager of a firm that used only two inputs, capital and labor, to produce output.The firm can hire as much labor as it wants at a wage of $5 per hour and can rent as much capital as it wants at a price of $50 per hour.After you look at the company books, you learn that the company has been using capital and labor in amounts that imply a marginal product of labor of 50 and a marginal product of capital of 100.Do you know why the firm hired you? Explain.

Accepted Answer

Before the manager is hired, the margina

What is the marginal cost of producing 90 units of output?

For given input prices, isocosts farther from the origin are associated with

The absolute value of the slope of the isoquant is the:

Given the linear production function Q = 10K + 5L, if Q = 10,000 and K = 500, how much labor is utilized?

Which of the following is not a means of acquiring product and process innovations?

Suppose the production function is given by Q = 3K + 4L.What is the average product of capital when 10 units of capital and 10 units of labor are employed?

Suppose the cost function is C(Q) = 50 + Q - 10Q² + 2Q³.At 10 units of output, the average cost curve is

Suppose the production function is given by Q = 3K + 4L.What is the marginal product of capital when 10 units of capital and 10 units of labor are employed?

At what level of output is marginal cost minimized:

For a cost function C = 100 + 10Q + Q², the average variable cost of producing 20 units of output is

For the cost function C(Q) = 75 + 4Q + 2Q², the marginal cost of producing 5 units of output is

If the production function is Q = K^.5L^.5 and capital is fixed at 1 unit, then the average product of labor when L = 25 is

As the usage of an input increases, marginal product

If the last unit of input increases total product we know that the marginal product is:

The following table summarizes the short-run production function for your firm.Your product sells for $5 per unit, labor costs $5 per unit, and the rental price of capital is $20 per unit.Complete the following table, and then answer the accompanying questions.

The production function for a competitive firm is Q = K^.5L^.5.The firm sells its output at a price of $10, and can hire labor at a wage of $5.Capital is fixed at one unit.The profit-maximizing quantity of labor is

If a firm is operating on the production function, then workers

Which of the following cost functions exhibits cost complementarity?

The Fundamentals of Managerial Economics

Market Forces: Demand and Supply

Quantitative Demand Analysis

The Theory of Individual Behavior

The Organization of the Firm

The Nature of Industry

Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets

Basic Oligopoly Models

Game Theory: Inside Oligopoly

Pricing Strategies for Firms With Market Power

The Economics of Information

Advanced Topics in Business Strategy

A Managers Guide to Government in the Marketplace

Filters

Exam 5: The Production Process and Costs

What is the marginal cost of producing 90 units of output?

For given input prices, isocosts farther from the origin are associated with

The absolute value of the slope of the isoquant is the:

Given the linear production function Q = 10K + 5L, if Q = 10,000 and K = 500, how much labor is utilized?

Which of the following is not a means of acquiring product and process innovations?

Suppose the production function is given by Q = 3K + 4L.What is the average product of capital when 10 units of capital and 10 units of labor are employed?

Suppose the cost function is C(Q) = 50 + Q - 10Q2 + 2Q3.At 10 units of output, the average cost curve is

Suppose the production function is given by Q = 3K + 4L.What is the marginal product of capital when 10 units of capital and 10 units of labor are employed?

At what level of output is marginal cost minimized:

For a cost function C = 100 + 10Q + Q2, the average variable cost of producing 20 units of output is

For the cost function C(Q) = 75 + 4Q + 2Q2, the marginal cost of producing 5 units of output is

If the production function is Q = K.5L.5 and capital is fixed at 1 unit, then the average product of labor when L = 25 is

As the usage of an input increases, marginal product

If the last unit of input increases total product we know that the marginal product is:

The following table summarizes the short-run production function for your firm.Your product sells for $5 per unit, labor costs $5 per unit, and the rental price of capital is $20 per unit.Complete the following table, and then answer the accompanying questions.

The production function for a competitive firm is Q = K.5L.5.The firm sells its output at a price of $10, and can hire labor at a wage of $5.Capital is fixed at one unit.The profit-maximizing quantity of labor is

If a firm is operating on the production function, then workers

Which of the following cost functions exhibits cost complementarity?

The Fundamentals of Managerial Economics

Market Forces: Demand and Supply

Quantitative Demand Analysis

The Theory of Individual Behavior

The Organization of the Firm

The Nature of Industry

Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets

Basic Oligopoly Models

Game Theory: Inside Oligopoly

Pricing Strategies for Firms With Market Power

The Economics of Information

Advanced Topics in Business Strategy

A Managers Guide to Government in the Marketplace

Filters

Suppose the cost function is C(Q) = 50 + Q - 10Q² + 2Q³.At 10 units of output, the average cost curve is

For a cost function C = 100 + 10Q + Q², the average variable cost of producing 20 units of output is

For the cost function C(Q) = 75 + 4Q + 2Q², the marginal cost of producing 5 units of output is

If the production function is Q = K^.5L^.5 and capital is fixed at 1 unit, then the average product of labor when L = 25 is

The production function for a competitive firm is Q = K^.5L^.5.The firm sells its output at a price of $10, and can hire labor at a wage of $5.Capital is fixed at one unit.The profit-maximizing quantity of labor is