Question 1

Which of the following statements best describes a production function?

Accepted Answer

A) the maximum profit generated from given levels of inputs 
B) the maximum level of output generated from given levels of inputs 
C) all levels of output that can be generated from given levels of inputs 
D) all levels of inputs that could produce a given level of output 
A) the maximum profit generated from given levels of inputs 
B) the maximum level of output generated from given levels of inputs 
C) all levels of output that can be generated from given levels of inputs 
D) all levels of inputs that could produce a given level of output B

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.

Question 3

-The above figure shows the isoquants for producing steel.Increasing returns to scale are

Accepted Answer

A) present when producing less than 10,000 tons. 
B) present when producing less than 20,000 tons. 
C) present when producing less than 30,000 tons. 
D) never present. 
A) present when producing less than 10,000 tons. 
B) present when producing less than 20,000 tons. 
C) present when producing less than 30,000 tons. 
D) never present. A

Question 4

Let the production function be q = ALaKb.The function exhibits constant 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.

Question 5

Suppose the production of VCRs can be represented by the following production function:
Q = L0.4 K0.4.The firm currently produces  
Units.If all inputs doubled,the new level of output will equal

Accepted Answer

A) 20.4 q1. 
B) 20.8 q1. 
C) 0.8 q1. 
D) 1.6 q1. 
A) 20.4 q1. 
B) 20.8 q1. 
C) 0.8 q1. 
D) 1.6 q1.

Question 6

Total product 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 7

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 8

Each additional worker produces two extra units of output until the first three units are produced for some production function.After the third unit is produced each additional worker produces one extra unit of output.What are the total product of labor,average product of labor and marginal product of labor for the first five units of production associated with this production function?

Accepted Answer

The answer of Each additional worker produces two extra units...

Question 9

The actual time length of the short run is determined by when diminishing marginal returns start.

Accepted Answer

A) True 
 B)False

Question 10

Explain why labor might not always be a variable input.

Accepted Answer

In the real world,units of labor are not

Question 11

Explain how firms that each produce as efficiently as they can,may not be equally productive.

Accepted Answer

Firm-specific characteristics

Question 12

If the average product of labor equals the marginal product of labor,then

Accepted Answer

A) the average product of labor is at a maximum. 
B) the marginal product of labor is at a maximum. 
C) Both A and B above. 
D) Neither A nor B above. 
A) the average product of labor is at a maximum. 
B) the marginal product of labor is at a maximum. 
C) Both A and B above. 
D) Neither A nor B above.

Question 13

At low levels of production,marginal productivity of labor increases as labor increases.At high levels of production,marginal productivity of labor decreases as labor increases.Are these two statements contradictory? Explain.

Accepted Answer

No.At low levels of production

Question 14

Suppose the production function for T-shirts can be represented as q = L0.25 K0.75.Show that the marginal productivity of labor diminishes in the short run.

Accepted Answer

In the short run,MPL = 0.25 ∗

Question 15

A firm has the following production function:
q = (L1/3 + K1/3)3
a.Determine the returns to scale for this function.
b.Determine the MRTS.
c.Determine the Elasticity of Substitution.

Accepted Answer

a.CRTS
b.M

Question 16

If the elasticity of substitution of a production function is equal to zero,then this production function is a

Accepted Answer

A) linear production function 
B) fixed proportion production function 
C) Cobb-Douglas production function 
D) None of above. 
A) linear production function 
B) fixed proportion production function 
C) Cobb-Douglas production function 
D) None of above.

Question 17

Thomas Malthus' prediction of mass starvation resulting from diminishing marginal returns has not been fulfilled because

Accepted Answer

A) the law of diminishing marginal returns did not hold in this case. 
B) Malthus ignored other factors like technological change. 
C) relative to Malthus' day,a larger percentage of today's labor works in the agricultural sector. 
D) All of the above. 
A) the law of diminishing marginal returns did not hold in this case. 
B) Malthus ignored other factors like technological change. 
C) relative to Malthus' day,a larger percentage of today's labor works in the agricultural sector. 
D) All of the above.

Question 18

With respect to production,the short run is best defined as a time period

Accepted Answer

A) lasting about six months. 
B) lasting about two years. 
C) in which all inputs are fixed. 
D) in which at least one input is fixed. 
A) lasting about six months. 
B) lasting about two years. 
C) in which all inputs are fixed. 
D) in which at least one input is fixed.

Question 19

Consider the following short-run production function: q = 5   
- 1/3   
.At what level of L do diminishing marginal returns begin? At what level of L do diminishing returns begin?

Accepted Answer

MP = 10L - @#IMG-DLM& .Marginal product

Question 20

The slope of the line from the origin to a given point on the curve equals

Accepted Answer

A) the increase in output. 
B) the change in input divided by the change in output. 
C) the average product of the input. 
D) the marginal product of the input. 
A) the increase in output. 
B) the change in input divided by the change in output. 
C) the average product of the input. 
D) the marginal product of the input.

Which of the following statements best describes a production function?

-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 isoquants for producing steel.Increasing returns to scale are

Let the production function be q = AL^aK^b.The function exhibits constant returns to scale if

Suppose the production of VCRs can be represented by the following production function: Q = L^0.4 K^0.4.The firm currently produces Units.If all inputs doubled,the new level of output will equal

Total product is

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 actual time length of the short run is determined by when diminishing marginal returns start.

Explain why labor might not always be a variable input.

Explain how firms that each produce as efficiently as they can,may not be equally productive.

If the average product of labor equals the marginal product of labor,then

At low levels of production,marginal productivity of labor increases as labor increases.At high levels of production,marginal productivity of labor decreases as labor increases.Are these two statements contradictory? Explain.

Suppose the production function for T-shirts can be represented as q = L^0.²⁵K^0.⁷⁵.Show that the marginal productivity of labor diminishes in the short run.

A firm has the following production function: q = (L^1/3 + K^1/3)³ a.Determine the returns to scale for this function. b.Determine the MRTS. c.Determine the Elasticity of Substitution.

If the elasticity of substitution of a production function is equal to zero,then this production function is a

Thomas Malthus' prediction of mass starvation resulting from diminishing marginal returns has not been fulfilled because

With respect to production,the short run is best defined as a time period

Consider the following short-run production function: q = 5 - 1/3 .At what level of L do diminishing marginal returns begin? At what level of L do diminishing returns begin?

The slope of the line from the origin to a given point on the curve equals

Introduction

Supply and Demand

A Consumers Constrained Choice

Demand

Consumer Welfare and Policy Analysis

Costs

Competitive Firms and Markets

Properties and Applications of the Competitive Model

General Equilibrium and Economic Welfare

Monopoly and Monopsony

Pricing and Advertising

Game Theory

Oligopoly and Monopolistic Competition

Factor Markets

Uncertainty

Property Rights, Externalities, Rivalry, and Exclusion

Asymmetric Information

Contracts and Moral Hazards

Filters

Exam 6: Firms and Production

Which of the following statements best describes a production function?

-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 isoquants for producing steel.Increasing returns to scale are

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

Suppose the production of VCRs can be represented by the following production function: Q = L0.4 K0.4.The firm currently produces Units.If all inputs doubled,the new level of output will equal

Total product is

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 actual time length of the short run is determined by when diminishing marginal returns start.

Explain why labor might not always be a variable input.

Explain how firms that each produce as efficiently as they can,may not be equally productive.

If the average product of labor equals the marginal product of labor,then

At low levels of production,marginal productivity of labor increases as labor increases.At high levels of production,marginal productivity of labor decreases as labor increases.Are these two statements contradictory? Explain.

Suppose the production function for T-shirts can be represented as q = L0.25 K0.75.Show that the marginal productivity of labor diminishes in the short run.

A firm has the following production function: q = (L1/3 + K1/3)3 a.Determine the returns to scale for this function. b.Determine the MRTS. c.Determine the Elasticity of Substitution.

If the elasticity of substitution of a production function is equal to zero,then this production function is a

Thomas Malthus' prediction of mass starvation resulting from diminishing marginal returns has not been fulfilled because

With respect to production,the short run is best defined as a time period

Consider the following short-run production function: q = 5 - 1/3 .At what level of L do diminishing marginal returns begin? At what level of L do diminishing returns begin?

The slope of the line from the origin to a given point on the curve equals

Introduction

Supply and Demand

A Consumers Constrained Choice

Demand

Consumer Welfare and Policy Analysis

Costs

Competitive Firms and Markets

Properties and Applications of the Competitive Model

General Equilibrium and Economic Welfare

Monopoly and Monopsony

Pricing and Advertising

Game Theory

Oligopoly and Monopolistic Competition

Factor Markets

Uncertainty

Property Rights, Externalities, Rivalry, and Exclusion

Asymmetric Information

Contracts and Moral Hazards

Filters

Let the production function be q = AL^aK^b.The function exhibits constant returns to scale if

Suppose the production of VCRs can be represented by the following production function: Q = L^0.4 K^0.4.The firm currently produces Units.If all inputs doubled,the new level of output will equal

Suppose the production function for T-shirts can be represented as q = L^0.²⁵K^0.⁷⁵.Show that the marginal productivity of labor diminishes in the short run.

A firm has the following production function: q = (L^1/3 + K^1/3)³ a.Determine the returns to scale for this function. b.Determine the MRTS. c.Determine the Elasticity of Substitution.