Question 1

All economically efficient production plans are technologically efficient.

Accepted Answer

A) True 
 B)False

Question 2

If producer choice sets are convex and a production plan satisfies the condition that the (marginal)technical rate of substitution is equal (in absolute value)to the ratio of input prices,then the production plan is profit maximizing.

Accepted Answer

A) True 
 B)False

Question 3

Assuming an interior solution,a production plan is profit maximizing if and only if all marginal revenue products are equal to input prices.

Accepted Answer

A) True 
 B)False

Question 4

Changing the labels on isoquants without changing the shapes of the isoquants implies no change in the underlying technology so long as the ordering of isoquants is preserved.

Accepted Answer

A) True 
 B)False

Question 5

Increasing returns to scale production technologies cannot give rise to convex producer choice sets.

Accepted Answer

A) True 
 B)False

Question 6

In one-input models,all technologically efficient production plans are economically efficient and vice versa.

Accepted Answer

A) True 
 B)False

Question 7

Suppose capital and labor are perfect complements in production.For output levels between 0 and 100,2 units of labor together with 1 unit of capital produce 1 unit of output; for output levels between 100 and 200,1 unit of labor together with 1 unit of capital produces 1 unit of output; and for output levels above 200,1 unit of labor together with two units of capital produces one additional output.In each graph below,carefully label as much of each graph as you can.
a.On a graph with labor on the horizontal axis and capital on the vertical,illustrate isoquants for 100,200 and 300 units of output.
b.Is this production technology homothetic?
c.Suppose the wage and rental rates are 10.On a graph with output on the horizontal axis and dollars on the vertical,plot the total (long run)cost of producing 100,200 and 300 units of output and illustrate the total cost curve.
d.On a separate graph with output on the horizontal and dollars on the vertical axis,illustrate the (long run)marginal cost curve and the approximate shape of the long run average cost curve.

Accepted Answer

a. @#IMG-DLM& 
 b.Since there are rays f

Question 8

If production technologies are homothetic,all cost-minimizing production plans lie on the same ray from the origin for a given set of input prices.

Accepted Answer

A) True 
 B)False

Question 9

Just as indifference maps represent consumer tastes,so isoquant maps represent a producer tastes.

Accepted Answer

A) True 
 B)False

Question 10

Cobb-Douglas production function have decreasing returns to scale.

Accepted Answer

A) True 
 B)False

All economically efficient production plans are technologically efficient.

If producer choice sets are convex and a production plan satisfies the condition that the (marginal)technical rate of substitution is equal (in absolute value)to the ratio of input prices,then the production plan is profit maximizing.

Assuming an interior solution,a production plan is profit maximizing if and only if all marginal revenue products are equal to input prices.

Changing the labels on isoquants without changing the shapes of the isoquants implies no change in the underlying technology so long as the ordering of isoquants is preserved.

Increasing returns to scale production technologies cannot give rise to convex producer choice sets.

In one-input models,all technologically efficient production plans are economically efficient and vice versa.

If production technologies are homothetic,all cost-minimizing production plans lie on the same ray from the origin for a given set of input prices.

Just as indifference maps represent consumer tastes,so isoquant maps represent a producer tastes.

Cobb-Douglas production function have decreasing returns to scale.

Introduction

A Consumers Economic Circumstances

Economic Circumstances in Labor and Financial Markets

Tastes and Indifference Curves

Different Types of Tastes

Doing the Best We Can

Income and Substitution Effects in Consumer Goods Markets

Wealth and Substitution Effects in Labor and Capital Markets

Demand for Goods and Supply of Labor and Capital

Consumer Surplus and Deadweight Loss

One Input and One Output: a Short-Run Producer Model

Production Decisions in the Short and Long Run

Competitive Market Equilibrium

The Invisible Hand and the First Welfare Theorem

General Equilibrium

Choice and Markets in the Presence of Risk

Elasticities, Price-Distorting Policies, and Non-Price Rationing

Distortionary Taxes and Subsidies

Prices and Distortions Across Markets

Externalities in Competitive Markets

Asymmetric Information in Competitive Markets

Monopoly

Strategic Thinking and Game Theory

Oligopoly

Product Differentiation and Innovation in Markets

Public Goods

Governments and Politics

What Is Good Challenges From Psychology and Philosophy

Filters

Exam 12: Production With Multiple Inputs

All economically efficient production plans are technologically efficient.

If producer choice sets are convex and a production plan satisfies the condition that the (marginal)technical rate of substitution is equal (in absolute value)to the ratio of input prices,then the production plan is profit maximizing.

Assuming an interior solution,a production plan is profit maximizing if and only if all marginal revenue products are equal to input prices.

Changing the labels on isoquants without changing the shapes of the isoquants implies no change in the underlying technology so long as the ordering of isoquants is preserved.

Increasing returns to scale production technologies cannot give rise to convex producer choice sets.

In one-input models,all technologically efficient production plans are economically efficient and vice versa.

If production technologies are homothetic,all cost-minimizing production plans lie on the same ray from the origin for a given set of input prices.

Just as indifference maps represent consumer tastes,so isoquant maps represent a producer tastes.

Cobb-Douglas production function have decreasing returns to scale.

Introduction

A Consumers Economic Circumstances

Economic Circumstances in Labor and Financial Markets

Tastes and Indifference Curves

Different Types of Tastes

Doing the Best We Can

Income and Substitution Effects in Consumer Goods Markets

Wealth and Substitution Effects in Labor and Capital Markets

Demand for Goods and Supply of Labor and Capital

Consumer Surplus and Deadweight Loss

One Input and One Output: a Short-Run Producer Model

Production Decisions in the Short and Long Run

Competitive Market Equilibrium

The Invisible Hand and the First Welfare Theorem

General Equilibrium

Choice and Markets in the Presence of Risk

Elasticities, Price-Distorting Policies, and Non-Price Rationing

Distortionary Taxes and Subsidies

Prices and Distortions Across Markets

Externalities in Competitive Markets

Asymmetric Information in Competitive Markets

Monopoly

Strategic Thinking and Game Theory

Oligopoly

Product Differentiation and Innovation in Markets

Public Goods

Governments and Politics

What Is Good Challenges From Psychology and Philosophy

Filters