Question 1

The expression given below explains:

Accepted Answer

A)  Product hill 
B)  Marginal product of labor 
C)  Non-marginal product 
D)  Total product 
A)  Product hill 
B)  Marginal product of labor 
C)  Non-marginal product 
D)  Total product

Question 2

The marginal rate of technical substitution in production is analogous to the marginal rate of substitution for the consumer's optimization problem in that

Accepted Answer

A)  the slope of the consumer's indifference curve is the opposite of the ratios of the marginal utilities of the two goods, whereas the slope of the production isoquant is the opposite of the ratio of the marginal product of labor relative to the marginal product of capital. 
B)  the slope of the consumer's indifference curve is equal to the ratio of the marginal utilities of the two goods, whereas the slope of the production isoquant is the opposite of the ratio of the marginal product of labor relative to the marginal product of capital. 
C)  the slope is equal in both instances. 
D)  they are calculated by subtracting the price ratio from the output level. 
A)  the slope of the consumer's indifference curve is the opposite of the ratios of the marginal utilities of the two goods, whereas the slope of the production isoquant is the opposite of the ratio of the marginal product of labor relative to the marginal product of capital. 
B)  the slope of the consumer's indifference curve is equal to the ratio of the marginal utilities of the two goods, whereas the slope of the production isoquant is the opposite of the ratio of the marginal product of labor relative to the marginal product of capital. 
C)  the slope is equal in both instances. 
D)  they are calculated by subtracting the price ratio from the output level.

Question 3

A fixed proportions production function

Accepted Answer

A)  is not observed in practice. 
B)  has straight line isoquants. 
C)  has L-shaped isoquants. 
D)  has a constant marginal rate of technical substitution as the firm substitutes labor for capital. 
A)  is not observed in practice. 
B)  has straight line isoquants. 
C)  has L-shaped isoquants. 
D)  has a constant marginal rate of technical substitution as the firm substitutes labor for capital.

Question 4

Given the production function Q = L2,calculate the average product of labor for L = 2,and also calculate the marginal product of labor between L = 1 and L = 2.

Accepted Answer

A)  The average product of labor is 2 and the marginal product of labor is 2. 
B)  The average product of labor is 1 and the marginal product of labor is 3. 
C)  The average product of labor is 3 and the marginal product of labor is 2. 
D)  The average product of labor is 2 and the marginal product of labor is 3. 
A)  The average product of labor is 2 and the marginal product of labor is 2. 
B)  The average product of labor is 1 and the marginal product of labor is 3. 
C)  The average product of labor is 3 and the marginal product of labor is 2. 
D)  The average product of labor is 2 and the marginal product of labor is 3.

Question 5

For the production function   ,the equation for a typical isoquant is

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 6

The production function represents

Accepted Answer

A)  the quantity of inputs necessary to produce a given level of output. 
B)  the various recipes for producing a given level of output. 
C)  the minimum amounts of labor and capital needed to produce a given level of output. 
D)  the set of all feasible combinations of inputs and outputs. 
A)  the quantity of inputs necessary to produce a given level of output. 
B)  the various recipes for producing a given level of output. 
C)  the minimum amounts of labor and capital needed to produce a given level of output. 
D)  the set of all feasible combinations of inputs and outputs.

Question 7

If marginal product is greater than average product

Accepted Answer

A)  total product must be increasing. 
B)  marginal product must be decreasing. 
C)  marginal product must be increasing. 
D)  average product may be increasing or decreasing. 
A)  total product must be increasing. 
B)  marginal product must be decreasing. 
C)  marginal product must be increasing. 
D)  average product may be increasing or decreasing.

Question 8

**Reference: Use the following table for questions 36-38  
-*Holding labor constant,what do you notice about the marginal productivity of capital?

Accepted Answer

A)  The marginal productivity of capital is always increasing. 
B)  The marginal productivity of capital is always constant. 
C)  The marginal productivity of capital is always decreasing. 
D)  The marginal productivity of capital increases, then decreases. 
A)  The marginal productivity of capital is always increasing. 
B)  The marginal productivity of capital is always constant. 
C)  The marginal productivity of capital is always decreasing. 
D)  The marginal productivity of capital increases, then decreases.

Question 9

If capital cannot easily be substituted for labor,then the elasticity of substitution is

Accepted Answer

A)  negative. 
B)  close to zero. 
C)  close to one. 
D)  approaching infinity. 
A)  negative. 
B)  close to zero. 
C)  close to one. 
D)  approaching infinity.

Question 10

**Reference: Use the following graph to answer questions 19 - 22.  
-*Marginal product reaches a maximum when labor equals

Accepted Answer

A)  100 
B)  200 
C)  300 
D)  400 
A)  100 
B)  200 
C)  300 
D)  400

The expression given below explains:

The marginal rate of technical substitution in production is analogous to the marginal rate of substitution for the consumer's optimization problem in that

A fixed proportions production function

Given the production function Q = L²,calculate the average product of labor for L = 2,and also calculate the marginal product of labor between L = 1 and L = 2.

For the production function ,the equation for a typical isoquant is

The production function represents

If marginal product is greater than average product

**Reference: Use the following table for questions 36-38 -*Holding labor constant,what do you notice about the marginal productivity of capital?

If capital cannot easily be substituted for labor,then the elasticity of substitution is

**Reference: Use the following graph to answer questions 19 - 22. -*Marginal product reaches a maximum when labor equals

Analyzing Economic Problems

Demand and Supply Analysis

Consumer Preferences and the Concept of Utility

Consumer Choice

The Theory of Demand

Costs and Cost Minimization

Cost Curves

Perfectly Competitive Markets

Competitive Markets

Monopoly and Monopsony

Capturing Surplus

Market Structure and Competition

Game Theory and Strategic Behavior

Risk and Information

General Equilibrium Theory

Externalities and Public Goods

Filters

Exam 6: Inputs and Production Functions

The expression given below explains:

The marginal rate of technical substitution in production is analogous to the marginal rate of substitution for the consumer's optimization problem in that

A fixed proportions production function

Given the production function Q = L2,calculate the average product of labor for L = 2,and also calculate the marginal product of labor between L = 1 and L = 2.

For the production function ,the equation for a typical isoquant is

The production function represents

If marginal product is greater than average product

**Reference: Use the following table for questions 36-38 -*Holding labor constant,what do you notice about the marginal productivity of capital?

If capital cannot easily be substituted for labor,then the elasticity of substitution is

**Reference: Use the following graph to answer questions 19 - 22. -*Marginal product reaches a maximum when labor equals

Analyzing Economic Problems

Demand and Supply Analysis

Consumer Preferences and the Concept of Utility

Consumer Choice

The Theory of Demand

Costs and Cost Minimization

Cost Curves

Perfectly Competitive Markets

Competitive Markets

Monopoly and Monopsony

Capturing Surplus

Market Structure and Competition

Game Theory and Strategic Behavior

Risk and Information

General Equilibrium Theory

Externalities and Public Goods

Filters

Given the production function Q = L²,calculate the average product of labor for L = 2,and also calculate the marginal product of labor between L = 1 and L = 2.