Question 1

If a firm moves from one point on a production isoquant to another point on the same isoquant,which of the following will certainly not happen?

Accepted Answer

A)  A change in the level of output 
B)  A change in the ratio in which the inputs are combined 
C)  A change in the marginal products of the inputs 
D)  A change in the rate of technical substitution 
E)  A change in profitability 
A)  A change in the level of output 
B)  A change in the ratio in which the inputs are combined 
C)  A change in the marginal products of the inputs 
D)  A change in the rate of technical substitution 
E)  A change in profitability A

Question 2

If there are constant returns to scale,then doubling the amount of any input will exactly double the amount of output.

Accepted Answer

A) True 
 B)False  False

Question 3

In any production process,the marginal product of labor equals

Accepted Answer

A)  the value of total output minus the cost of the fixed capital stock. 
B)  the change in output per unit change in labor input for "small" changes in the amount of input. 
C)  total output divided by total labor inputs. 
D)  total output produced with the given labor inputs. 
E)  the average output of the least-skilled workers employed by the firm. 
A)  the value of total output minus the cost of the fixed capital stock. 
B)  the change in output per unit change in labor input for "small" changes in the amount of input. 
C)  total output divided by total labor inputs. 
D)  total output produced with the given labor inputs. 
E)  the average output of the least-skilled workers employed by the firm. B

Question 4

It is possible to have decreasing marginal products for all inputs,and yet have increasing returns to scale.

Accepted Answer

A) True 
 B)False

Question 5

A firm has the production function f(X,Y)=X3/4 Y1/4,where X is the amount of factor x used and Y is the amount of factor y used.On a diagram we put X on the horizontal axis and Y on the vertical axis.We draw some isoquants.Now we draw a straight line on the graph and we notice that wherever this line meets an isoquant,the isoquant has a slope of-9.The straight line we drew

Accepted Answer

A)  is horizontal. 
B)  is a ray through the origin with slope 3. 
C)  is vertical. 
D)  is a ray through the origin with slope 4. 
E)  has a negative slope. 
A)  is horizontal. 
B)  is a ray through the origin with slope 3. 
C)  is vertical. 
D)  is a ray through the origin with slope 4. 
E)  has a negative slope.

Question 6

A firm has the production function f(x,y)=x.5 + y,where x is the amount of factor x it uses and y is the amount of factor y.On a diagram we put x on the horizontal axis and y on the vertical axis.We draw some isoquants.Now we draw a straight line on the graph and we notice that the slopes of all the isoquants that it meets have the same slope at the point where they meet this line.The straight line we drew was

Accepted Answer

A)  vertical. 
B)  horizontal. 
C)  diagonal through the origin with slope 0.5. 
D)  diagonal with slope 2. 
E)  diagonal with slope greater than 2. 
A)  vertical. 
B)  horizontal. 
C)  diagonal through the origin with slope 0.5. 
D)  diagonal with slope 2. 
E)  diagonal with slope greater than 2.

Question 7

If the production function is f(x,y)=min{12x,3y},then there is convexity in production.

Accepted Answer

A) True 
 B)False

Question 8

A firm has the production function f(X,Y)= X 1/2 Y 1/2,where X is the amount of factor x used and Y is the amount of factor y used.On a diagram we put X on the horizontal axis and Y on the vertical axis.We draw some isoquants.Now we draw a straight line on the graph and we notice that wherever this line meets an isoquant,the isoquant has a slope of 23.The straight line we drew

Accepted Answer

A)  is vertical. 
B)  is horizontal. 
C)  is a ray through the origin with slope 3. 
D)  is a ray through the origin with slope 4. 
E)  has a negative slope. 
A)  is vertical. 
B)  is horizontal. 
C)  is a ray through the origin with slope 3. 
D)  is a ray through the origin with slope 4. 
E)  has a negative slope.

Question 9

The production function Q =50K0.25L0.75 exhibits

Accepted Answer

A)  increasing,then diminishing returns to scale. 
B)  increasing returns to scale. 
C)  decreasing returns to scale. 
D)  constant returns to scale. 
E)  negative returns to scale. 
A)  increasing,then diminishing returns to scale. 
B)  increasing returns to scale. 
C)  decreasing returns to scale. 
D)  constant returns to scale. 
E)  negative returns to scale.

Question 10

The production set of a firm is the set of all products the firm can produce.

Accepted Answer

A) True 
 B)False

Question 11

A firm has the production function f(x1,x2)=x0.801x0.202.The isoquant on which output is 702/10 has the equation

Accepted Answer

A)  x2=70x51. 
B)  x1/x2 =4. 
C)  x2=70x-41. 
D)  x2 =70x-0.201. 
E)  x1 =0.20x-0.802. 
A)  x2=70x51. 
B)  x1/x2 =4. 
C)  x2=70x-41. 
D)  x2 =70x-0.201. 
E)  x1 =0.20x-0.802.

Question 12

A firm uses only two inputs to produce its output.These inputs are perfect substitutes.This firm

Accepted Answer

A)  must have increasing returns to scale. 
B)  must have constant returns to scale. 
C)  could have increasing returns to scale,constant returns to scale,or decreasing returns to scale. 
D)  must have decreasing returns to scale. 
E)  must have decreasing returns to scale in the short run and constant returns to scale in the long run. 
A)  must have increasing returns to scale. 
B)  must have constant returns to scale. 
C)  could have increasing returns to scale,constant returns to scale,or decreasing returns to scale. 
D)  must have decreasing returns to scale. 
E)  must have decreasing returns to scale in the short run and constant returns to scale in the long run.

Question 13

The production function Q=50K0.25L0.75 exhibits

Accepted Answer

A)  increasing returns to scale. 
B)  decreasing returns to scale. 
C)  constant returns to scale. 
D)  increasing,then diminishing returns to scale. 
E)  negative returns to scale. 
A)  increasing returns to scale. 
B)  decreasing returns to scale. 
C)  constant returns to scale. 
D)  increasing,then diminishing returns to scale. 
E)  negative returns to scale.

Question 14

A firm has two variable factors and a production function f(x1,x2)=(2x1 + 4x2)1/2.The technical rate of substitution between x1 and x2 is constant.

Accepted Answer

A) True 
 B)False

Question 15

A firm has the production function f(x,y)= x+min{x,y}.The isoquants for the firm

Accepted Answer

A)  are L-shaped with the corners of the L's on the line y = x. 
B)  are L-shaped with the corners of the L's on the line y = x + 1. 
C)  consist of two line segments,one vertical and the other with a slope of -1. 
D)  consist of two line segments,one horizontal and the other with a slope of -1. 
E)  are upside down L-shaped. 
A)  are L-shaped with the corners of the L's on the line y = x. 
B)  are L-shaped with the corners of the L's on the line y = x + 1. 
C)  consist of two line segments,one vertical and the other with a slope of -1. 
D)  consist of two line segments,one horizontal and the other with a slope of -1. 
E)  are upside down L-shaped.

Question 16

If the marginal product of each factor decreases as the amount of that factor used increases,then there must be decreasing returns to scale.

Accepted Answer

A) True 
 B)False

Question 17

If there is one input used in production and if there are decreasing returns to scale,then the marginal product for the input will be diminishing.

Accepted Answer

A) True 
 B)False

Question 18

A firm has the production function f(x1,x2)=x11x0.502.The isoquant on which output is 305/10 has the equation

Accepted Answer

A)  x2 =30x-21. 
B)  x2 = 30x21. 
C)  x2 =30x-0.501. 
D)  x1/x2 = 2. 
E)  x1 =0.50x-0.502. 
A)  x2 =30x-21. 
B)  x2 = 30x21. 
C)  x2 =30x-0.501. 
D)  x1/x2 = 2. 
E)  x1 =0.50x-0.502.

Question 19

On separate axes,draw typical production isoquants for each of the following production functions.
a.f(x,y)= min{2x,x + y}.
b.f(x,y)= xy.
c.f(x,y)= x +min{x,y}.
d.(x,y)= x + y1/2.

Accepted Answer

a.The isoquants have a kink at the line

Question 20

The production function Q=50K0.25L0.25 exhibits

Accepted Answer

A)  increasing returns to scale. 
B)  constant returns to scale. 
C)  decreasing returns to scale. 
D)  increasing,then diminishing returns to scale. 
E)  negative returns to scale. 
A)  increasing returns to scale. 
B)  constant returns to scale. 
C)  decreasing returns to scale. 
D)  increasing,then diminishing returns to scale. 
E)  negative returns to scale.

Exam 19:Technology-Part A

If a firm moves from one point on a production isoquant to another point on the same isoquant,which of the following will certainly not happen?

If there are constant returns to scale,then doubling the amount of any input will exactly double the amount of output.

In any production process,the marginal product of labor equals

It is possible to have decreasing marginal products for all inputs,and yet have increasing returns to scale.

If the production function is f(x,y)=min{12x,3y},then there is convexity in production.

The production function Q =50K0.25L0.75 exhibits

The production set of a firm is the set of all products the firm can produce.

A firm has the production function f(x1,x2)=x0.801x0.202.The isoquant on which output is 702/10 has the equation

A firm uses only two inputs to produce its output.These inputs are perfect substitutes.This firm

The production function Q=50K0.25L0.75 exhibits

A firm has two variable factors and a production function f(x1,x2)=(2x1 + 4x2)1/2.The technical rate of substitution between x1 and x2 is constant.

A firm has the production function f(x,y)= x+min{x,y}.The isoquants for the firm

If the marginal product of each factor decreases as the amount of that factor used increases,then there must be decreasing returns to scale.

If there is one input used in production and if there are decreasing returns to scale,then the marginal product for the input will be diminishing.

A firm has the production function f(x1,x2)=x11x0.502.The isoquant on which output is 305/10 has the equation

On separate axes,draw typical production isoquants for each of the following production functions. a.f(x,y)= min{2x,x + y}. b.f(x,y)= xy. c.f(x,y)= x +min{x,y}. d.(x,y)= x + y1/2.

The production function Q=50K0.25L0.25 exhibits

Demand-Part A

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 B

Profit Maximization-Part A

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-Part A

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

Information Technology-Part B

Public Goods-Part A

Public Goods-Part B

Asymmetric Information-Part A

Asymmetric Information-Part B

Filters

The production function Q =50K^0.25L^0.75 exhibits

A firm has the production function f(x₁,x₂)=x^0.80₁x^0.20₂.The isoquant on which output is 70^2/10 has the equation

The production function Q=50K^0.25L^0.75 exhibits

A firm has two variable factors and a production function f(x₁,x₂)=(2x₁ + 4x₂)^1/2.The technical rate of substitution between x₁ and x₂ is constant.

A firm has the production function f(x₁,x₂)=x¹¹x^0.50₂.The isoquant on which output is 30^5/10 has the equation

On separate axes,draw typical production isoquants for each of the following production functions. a.f(x,y)= min{2x,x + y}. b.f(x,y)= xy. c.f(x,y)= x +min{x,y}. d.(x,y)= x + y^1/2.

The production function Q=50K^0.25L^0.25 exhibits