A competitive firm produces output using three fixed factors and one variable factor.The firm's short-run production function is q = 305x - 2x2, where x is the amount of variable factor used.The price of the output is $2 per unit and the price of the variable factor is $10 per unit.In the short run, how many units of x should the firm use?

A) 37 B) 150 C) 21 D) 75 E) None of the above. A) 37 B) 150 C) 21 D) 75 E) None of the above.

Exam 18: Profit Maximization-Part A

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A competitive firm's production function is f(x₁, x₂)= 6x^1/2₁ + 8x^1/2₂.The price of factor 1 is $1 and the price of factor 2 is $4.The price of output is $8.What is the profit-maximizing quantity of output?

(Multiple Choice)

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Question 21

A firm produces one output with one input and has decreasing returns to scale.The price that it pays per unit of input and the price it gets per unit of output are independent of the amount that this firm buys or sells.If the government taxes its net profits at some percentage rate and subsidizes its inputs at the same percentage rate, the firm's profit-maximizing output will not change.

(True/False)

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Question 22

A profit-maximizing competitive firm uses just one input, x.Its production function is q = 4x^1/2.The price of output is $28 and the factor price is $7.The amount of the factor that the firm demands is

(Multiple Choice)

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Question 23

A competitive firm produces a single output using several inputs.The price of output rises by $4 per unit.The price of one of the inputs increases by $4 and the quantity of this input that the firm uses increases by 16 units.The prices of all other inputs stay unchanged.From the weak axiom of profit maximization we can tell that

(Multiple Choice)

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Question 24

Just as in the theory of utility-maximizing consumers, the theory of profit-maximizing firms allows the possibility of Giffen factors.These are factors for which a fall in price leads to a fall in demand.

(True/False)

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Question 25

During the height of the pet rock craze in the 1970s, the price elasticity of demand was estimated to be 1.80.Since pet rocks have a marginal cost of zero, a profit-maximizing seller of pet rocks would

(Multiple Choice)

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Question 26

If the price of the output of a profit-maximizing, competitive firm rises and all other prices stay constant, then the firm's output cannot fall.

(True/False)

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Question 27

A competitive, profit-maximizing firm uses two inputs a and b.Its production function is F(a, b)= a1/2 +a1/2.Its output sells for $5 per unit.The price of input a is $1 per unit.If the price of output rises to $6 per unit but factor prices do not change.

(Multiple Choice)

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Question 28

The production function is given by F(L)=6L^2/3.Suppose that the cost per unit of labor is $16 and the price of output is $12.How many units of labor will the firm hire?

(Multiple Choice)

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Question 29

A competitive firm produces output using three fixed factors and one variable factor.The firm's short-run production function is q = 305x - 2x², where x is the amount of variable factor used.The price of the output is $2 per unit and the price of the variable factor is $10 per unit.In the short run, how many units of x should the firm use?

(Multiple Choice)

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Question 30

Diesel Dan is a contract truck driver.While his revenue is $2.50 per mile driven, the faster he drives, the greater the risk of a speeding ticket.The cost of driving his truck 1 hour at a speed of S miles per hour is C(S)=e^S^-^(60/5).To maximize his profit, Dan should drive

(Multiple Choice)

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Question 31

Diesel Dan is a contract truck driver.While his revenue is $2 per mile driven, the faster he drives, the greater the risk of a speeding ticket.The cost of driving his truck 1 hour at a speed of S miles per hour is C(S)=e^S^-^(60/5).To maximize his profit, Dan should drive

(Multiple Choice)

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Question 32

When Farmer Hoglund applies N pounds of fertilizer per acre, the marginal product of fertilizer is 1 -N/100 bushels of corn.If the price of corn is $2 per bushel and the price of fertilizer is $40 per pound, then how many pounds of fertilizer per acre should Farmer Hoglund use in order to maximize his profits?

(Multiple Choice)

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Question 33

Jiffy-Pol Consultants is paid $1,000,000 for each percentage of the vote that Senator Sleaze receives in the upcoming election.Sleaze's share of the vote is determined by the number of slanderous campaign ads run by Jiffy-Pol according to the function S = 100N/(N + 1), where N is the number of ads.If each ad costs $10,000 approximately how many ads should Jiffy-Pol buy in order to maximize its profits?

(Multiple Choice)

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Question 34

A competitive firm's production function is f(x₁, x₂)= 12x^1/2₁ + 4x^1/2₂.The price of factor 1 is $1 and the price of factor 2 is $2.The price of output is $4.What is the profit-maximizing quantity of output?

(Multiple Choice)

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Question 35

The production function is f(x₁, x₂)= x^1/2₁x^1/2₂.If the price of factor 1 is $12 and the price of factor 2 is $24, in what proportions should the firm use factors 1 and 2 if it wants to maximize profits?

(Multiple Choice)

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Question 36

If the short-run marginal costs of producing a good are $20 for the first 400 units and $30 for each additional unit beyond 400, then in the short run, if the market price of output is $24, a profit-maximizing firm will

(Multiple Choice)

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Question 37

If there is perfect certainty, a competitive firm will necessarily

(Multiple Choice)

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Question 38

Philip owns and operates a gas station.Philip works 40 hours a week managing the station but doesn't draw a salary.He could earn $700 a week doing the same work for Terrance.The station owes the bank $100,000 and Philip has invested $100,000 of his own money.If Philip's accounting profits are $1,000 per week while the interest on his bank debt is $400 per week, the business's economic profits are

(Multiple Choice)

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Question 39

A fixed factor is a factor of production that is used in fixed proportion to the level of output.

(True/False)

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Question 40

Showing 21 - 40 of 53

Exam 18: Profit Maximization-Part A

A competitive firm's production function is f(x1, x2)= 6x1/21 + 8x1/22.The price of factor 1 is $1 and the price of factor 2 is $4.The price of output is $8.What is the profit-maximizing quantity of output?

A profit-maximizing competitive firm uses just one input, x.Its production function is q = 4x1/2.The price of output is $28 and the factor price is $7.The amount of the factor that the firm demands is

Just as in the theory of utility-maximizing consumers, the theory of profit-maximizing firms allows the possibility of Giffen factors.These are factors for which a fall in price leads to a fall in demand.

During the height of the pet rock craze in the 1970s, the price elasticity of demand was estimated to be 1.80.Since pet rocks have a marginal cost of zero, a profit-maximizing seller of pet rocks would

If the price of the output of a profit-maximizing, competitive firm rises and all other prices stay constant, then the firm's output cannot fall.

A competitive, profit-maximizing firm uses two inputs a and b.Its production function is F(a, b)= a1/2 +a1/2.Its output sells for $5 per unit.The price of input a is $1 per unit.If the price of output rises to $6 per unit but factor prices do not change.

The production function is given by F(L)=6L2/3.Suppose that the cost per unit of labor is $16 and the price of output is $12.How many units of labor will the firm hire?

Diesel Dan is a contract truck driver.While his revenue is $2.50 per mile driven, the faster he drives, the greater the risk of a speeding ticket.The cost of driving his truck 1 hour at a speed of S miles per hour is C(S)=eS - (60/5).To maximize his profit, Dan should drive

Diesel Dan is a contract truck driver.While his revenue is $2 per mile driven, the faster he drives, the greater the risk of a speeding ticket.The cost of driving his truck 1 hour at a speed of S miles per hour is C(S)=eS - (60/5).To maximize his profit, Dan should drive

A competitive firm's production function is f(x1, x2)= 12x1/21 + 4x1/22.The price of factor 1 is $1 and the price of factor 2 is $2.The price of output is $4.What is the profit-maximizing quantity of output?

The production function is f(x1, x2)= x1/21x1/22.If the price of factor 1 is $12 and the price of factor 2 is $24, in what proportions should the firm use factors 1 and 2 if it wants to maximize profits?

If the short-run marginal costs of producing a good are $20 for the first 400 units and $30 for each additional unit beyond 400, then in the short run, if the market price of output is $24, a profit-maximizing firm will

If there is perfect certainty, a competitive firm will necessarily

A fixed factor is a factor of production that is used in fixed proportion to the level of output.

Budget Constraint-Part A

Budget Constraint-Part B

Preferences-Part A

Preferences-Part B

Utility-Part A

Utility-Part B

Choice-Part A

Choice-Part B

Demand-Part A

Demand-Part B

Revealed Preference-Part A

Revealed Preference-Part B

Slutsky Equation-Part A

Slutsky Equation-Part B

Buying and Selling-Part A

Buying and Selling-Part B

Intertemporal Choice-Part A

Intertemporal Choice-Part B

Asset Markets-Part A

Asset Markets-Part B

Uncertainty-Part A

Uncertainty-Part B

Risky Assets-Part A

Risky Assets-Part B

Consumers Surplus-Part A

Consumers Surplus-Part B

Market Demand-Part A

Market Demand-Part B

Equilibrium-Part A

Equilibrium-Part B

Auctions-Part A

Auctions-Part B

Technology-Part A

Technology-Part B

Profit Maximization-Part B

Cost Minimization-Part A

Cost Minimization-Part B

Cost Curves-Part A

Cost Curves-Part B

Firm Supply-Part A

Firm Supply-Part B

Industry Supply-Part A

Industry Supply-Part B

Monopoly-Part A

Monopoly-Part B

Monopoly Behavior-Part A

Monopoly Behavior-Part B

Factor Markets-Part A

Factor Markets-Part B

Oligopoly-Part A

Oligopoly-Part B

Game Theory-Part A

Game Theory-Part B

Game Applications-Part A

Game Applications-Part B

Behavioral Economics

Exchange-Part A

Exchange-Part B

Production-Part A

Production-Part B

Welfare-Part A

Welfare-Part B

Externalities-Part A

Externalities-Part B

Information Technology-Part A

A competitive firm's production function is f(x₁, x₂)= 6x^1/2₁ + 8x^1/2₂.The price of factor 1 is $1 and the price of factor 2 is $4.The price of output is $8.What is the profit-maximizing quantity of output?

A profit-maximizing competitive firm uses just one input, x.Its production function is q = 4x^1/2.The price of output is $28 and the factor price is $7.The amount of the factor that the firm demands is

The production function is given by F(L)=6L^2/3.Suppose that the cost per unit of labor is $16 and the price of output is $12.How many units of labor will the firm hire?

Diesel Dan is a contract truck driver.While his revenue is $2.50 per mile driven, the faster he drives, the greater the risk of a speeding ticket.The cost of driving his truck 1 hour at a speed of S miles per hour is C(S)=e^S^-^(60/5).To maximize his profit, Dan should drive

Diesel Dan is a contract truck driver.While his revenue is $2 per mile driven, the faster he drives, the greater the risk of a speeding ticket.The cost of driving his truck 1 hour at a speed of S miles per hour is C(S)=e^S^-^(60/5).To maximize his profit, Dan should drive

A competitive firm's production function is f(x₁, x₂)= 12x^1/2₁ + 4x^1/2₂.The price of factor 1 is $1 and the price of factor 2 is $2.The price of output is $4.What is the profit-maximizing quantity of output?

The production function is f(x₁, x₂)= x^1/2₁x^1/2₂.If the price of factor 1 is $12 and the price of factor 2 is $24, in what proportions should the firm use factors 1 and 2 if it wants to maximize profits?