Question 1

A firm using two inputs,X and Y,is using them in the most efficient manner when

Accepted Answer

A) MPx = MPy. 
B) Px = Py and MPx = MPy. 
C) MPx/Py = MPy/Px. 
D) MPx/MPy = Px/Py. 
A) MPx = MPy. 
B) Px = Py and MPx = MPy. 
C) MPx/Py = MPy/Px. 
D) MPx/MPy = Px/Py.

Question 2

The marginal product of the variable input

Accepted Answer

A) is always positive. 
B) typically falls then rises. 
C) is equal to the total product divided by the total amount of the variable input employed. 
D) None of the above 
A) is always positive. 
B) typically falls then rises. 
C) is equal to the total product divided by the total amount of the variable input employed. 
D) None of the above

Question 3

What does the expansion path represent?

Accepted Answer

The expansion path represents

Question 4

In the short run,finding the optimal amount of variable input involves which relationship?

Accepted Answer

A) MP = MC 
B) AP = MP 
C) MP = 0 
D) MRP = MFC 
A) MP = MC 
B) AP = MP 
C) MP = 0 
D) MRP = MFC

Question 5

Which of the following is the best example of two inputs that would exhibit a constant marginal rate of technical substitution?

Accepted Answer

A) trucks and truck drivers 
B) natural gas and oil 
C) personal computers and clerical workers 
D) company-employed computer programmers and temporary supplemental computer programmers 
A) trucks and truck drivers 
B) natural gas and oil 
C) personal computers and clerical workers 
D) company-employed computer programmers and temporary supplemental computer programmers

Question 6

The difference between the short-run and the long-run is

Accepted Answer

A) three months,or one business quarter. 
B) the time it takes for firms to change all inputs in the production process. 
C) the time it takes for firms to change only their variable inputs. 
D) More information is required to answer this question. 
A) three months,or one business quarter. 
B) the time it takes for firms to change all inputs in the production process. 
C) the time it takes for firms to change only their variable inputs. 
D) More information is required to answer this question.

Question 7

A firm has two plants,one in the United States and one in Mexico,and it cannot change the size of the plants or the amount of capital equipment.The wage in Mexico is $5.The wage in the U.S.is $20.Given current employment,the marginal product of the last worker in Mexico is 100,and the marginal product of the last worker in the U.S.is 500.
a.Is the firm maximizing output relative to its labor cost? Show how you know.
b.If it is not,what should the firm do?

Accepted Answer

a.Maximizing output between plants requi

Question 8

In a call center,which of the following situations can be considered as a variable input in the short run?

Accepted Answer

A) the level of computer software being utilized 
B) the number of call center representatives on duty at the center 
C) the number of call center managers or supervisors 
D) the size (e.g.,square footage)of the call center 
A) the level of computer software being utilized 
B) the number of call center representatives on duty at the center 
C) the number of call center managers or supervisors 
D) the size (e.g.,square footage)of the call center

Question 9

$\begin{array} { | c | c | } 
\hline \begin{array} { c } 
\text { Number of } \
\text { Workers }
\end{array} & \text { Output } \
\hline 0 & 0 \
\hline 1 & 50 \
\hline 2 & 110 \
\hline 3 & 300 \
\hline 4 & 450 \
\hline 5 & 590 \
\hline 6 & 665 \
\hline 7 & 700 \
\hline 8 & 725 \
\hline 9 & 710 \
\hline 10 & 705 \
\hline
\end{array}$

-Based on the table above,if the wage rate is $500 and the price of output is $5,how many workers should the firm hire?

Accepted Answer

@#IMG-DLM& The firm should hir

Question 10

Which of the following combination of inputs is most closely reflective of decreasing marginal rate of technical substitution (MRTS)?

Accepted Answer

A) oil and natural gas 
B) sugar and high fructose corn syrup 
C) computers and clerks 
D) keyboards and computers 
A) oil and natural gas 
B) sugar and high fructose corn syrup 
C) computers and clerks 
D) keyboards and computers

Question 11

Decreasing returns to scale

Accepted Answer

A) indicate that an increase in all inputs by some proportion will result in a decrease in output. 
B) must always occur at some point in the production process. 
C) are directly related to the law of diminishing returns. 
D) All of the above are true. 
E) None of the above is true. 
A) indicate that an increase in all inputs by some proportion will result in a decrease in output. 
B) must always occur at some point in the production process. 
C) are directly related to the law of diminishing returns. 
D) All of the above are true. 
E) None of the above is true.

Question 12

An isoquant indicates different combinations of

Accepted Answer

A) two inputs that can be purchased for the same amount of money. 
B) two inputs that can produce the same amount of output. 
C) output that can be produced with the same amount of input. 
D) output that cost the same amount to produce. 
A) two inputs that can be purchased for the same amount of money. 
B) two inputs that can produce the same amount of output. 
C) output that can be produced with the same amount of input. 
D) output that cost the same amount to produce.

Question 13

Q = K1/2L1/2
w = $2,r = $2
The firm would like to know the minimum cost of producing 2000 units of output.Find the combination of inputs that minimizes the cost of producing 2000 units,the total cost,and identify the expansion path.

Accepted Answer

MP_L= 1/2 K^1/2L^-1/2 MP_K= 1/2 K^-1/2L^1/2 Optimization requi

Question 14

The production period in which at least one input is fixed in quantity is the

Accepted Answer

A) production run. 
B) long run. 
C) short run. 
D) planning horizon. 
A) production run. 
B) long run. 
C) short run. 
D) planning horizon.

Question 15

The following Cobb-Douglas production function,Q = 1.8L0.74K0.36,exhibits

Accepted Answer

A) increasing returns. 
B) constant returns. 
C) decreasing returns. 
D) Both A and B 
A) increasing returns. 
B) constant returns. 
C) decreasing returns. 
D) Both A and B

Question 16

When the law of diminishing returns takes effect

Accepted Answer

A) firms must add increasingly more input if they are to maintain the same extra amount of output. 
B) firms must add decreasingly more input if they are to maintain the same extra amount of output. 
C) more input must be added in order to increase its output. 
D) a firm must always try to add the same amount of input to the production process. 
A) firms must add increasingly more input if they are to maintain the same extra amount of output. 
B) firms must add decreasingly more input if they are to maintain the same extra amount of output. 
C) more input must be added in order to increase its output. 
D) a firm must always try to add the same amount of input to the production process.

Question 17

For each of the following functions,describe returns to scale.
a.Q = K + L
b.Q = K1/2L3/4
c.Q = K2L

Accepted Answer

a.Constant returns t

Question 18

Stage III of the short-run Production Function is

Accepted Answer

A) the most efficient mix of inputs. 
B) the least costly level of output. 
C) where additional units of variable inputs will lead to less output. 
D) where additional units of variable inputs will lead to more output. 
A) the most efficient mix of inputs. 
B) the least costly level of output. 
C) where additional units of variable inputs will lead to less output. 
D) where additional units of variable inputs will lead to more output.

Question 19

A firm is making a long-run planning decision.It wants to decide on the optimal size of plant and labor force.It is considering building a medium-sized plant and hiring 100 workers.Engineering estimates suggest that at those levels,the marginal product of capital will be 100 and the marginal product of labor will be 75.If the wage rate is $5 and the rental rate on capital is $10,is the firm making the right decision? Support your answer.

Accepted Answer

No,the firm is not making the right deci

Question 20

Which of the following is not true about the law of diminishing returns?

Accepted Answer

A) It is a short-run phenomenon. 
B) It refers to diminishing marginal product. 
C) It will have an impact on the firm's marginal cost. 
D) It divides Stage I and II of the production process. 
E) All of the above are true. 
A) It is a short-run phenomenon. 
B) It refers to diminishing marginal product. 
C) It will have an impact on the firm's marginal cost. 
D) It divides Stage I and II of the production process. 
E) All of the above are true.

A firm using two inputs,X and Y,is using them in the most efficient manner when

The marginal product of the variable input

What does the expansion path represent?

In the short run,finding the optimal amount of variable input involves which relationship?

Which of the following is the best example of two inputs that would exhibit a constant marginal rate of technical substitution?

The difference between the short-run and the long-run is

In a call center,which of the following situations can be considered as a variable input in the short run?

Number of Workers Output 0 0 1 50 2 110 3 300 4 450 5 590 6 665 7 700 8 725 9 710 10 705 -Based on the table above,if the wage rate is $500 and the price of output is $5,how many workers should the firm hire?

Which of the following combination of inputs is most closely reflective of decreasing marginal rate of technical substitution (MRTS)?

Decreasing returns to scale

An isoquant indicates different combinations of

Q = K^1/2L^1/2 w = $2,r = $2 The firm would like to know the minimum cost of producing 2000 units of output.Find the combination of inputs that minimizes the cost of producing 2000 units,the total cost,and identify the expansion path.

The production period in which at least one input is fixed in quantity is the

The following Cobb-Douglas production function,Q = 1.8L^0.74K^0.36,exhibits

When the law of diminishing returns takes effect

For each of the following functions,describe returns to scale. a.Q = K + L b.Q = K^1/2L^3/4 c.Q = K²L

Stage III of the short-run Production Function is

Which of the following is not true about the law of diminishing returns?

Introduction

The Firm and Its Goals

Supply and Demand

Demand Elasticity

Demand Estimation and Forecasting Appendices 5A and 5B

The Theory and Estimation of Cost Appendices 7A,7B,and 7C

Pricing and Output Decisions: Perfect Competition and Monopoly Appendices 8A and 8B

Pricing and Output Decisions: Monopolistic Competition and Oligopoly

Special Pricing Practices

Game Theory and Asymmetric Information

Capital Budgeting and Risk

The Multinational Corporation in a Global Setting

Government and Industry: Challenges and Opportunities for Todays Manager

The Global Soft Drink Industry

Filters

Exam 6: The Theory and Estimation of Production Appendices 6A,6B,and 6C

A firm using two inputs,X and Y,is using them in the most efficient manner when

The marginal product of the variable input

What does the expansion path represent?

In the short run,finding the optimal amount of variable input involves which relationship?

Which of the following is the best example of two inputs that would exhibit a constant marginal rate of technical substitution?

The difference between the short-run and the long-run is

In a call center,which of the following situations can be considered as a variable input in the short run?

Number of Workers Output 0 0 1 50 2 110 3 300 4 450 5 590 6 665 7 700 8 725 9 710 10 705 -Based on the table above,if the wage rate is $500 and the price of output is $5,how many workers should the firm hire?

Which of the following combination of inputs is most closely reflective of decreasing marginal rate of technical substitution (MRTS)?

Decreasing returns to scale

An isoquant indicates different combinations of

Q = K1/2L1/2 w = $2,r = $2 The firm would like to know the minimum cost of producing 2000 units of output.Find the combination of inputs that minimizes the cost of producing 2000 units,the total cost,and identify the expansion path.

The production period in which at least one input is fixed in quantity is the

The following Cobb-Douglas production function,Q = 1.8L0.74K0.36,exhibits

When the law of diminishing returns takes effect

For each of the following functions,describe returns to scale. a.Q = K + L b.Q = K1/2L3/4 c.Q = K2L

Stage III of the short-run Production Function is

Which of the following is not true about the law of diminishing returns?

Introduction

The Firm and Its Goals

Supply and Demand

Demand Elasticity

Demand Estimation and Forecasting Appendices 5A and 5B

The Theory and Estimation of Cost Appendices 7A,7B,and 7C

Pricing and Output Decisions: Perfect Competition and Monopoly Appendices 8A and 8B

Pricing and Output Decisions: Monopolistic Competition and Oligopoly

Special Pricing Practices

Game Theory and Asymmetric Information

Capital Budgeting and Risk

The Multinational Corporation in a Global Setting

Government and Industry: Challenges and Opportunities for Todays Manager

The Global Soft Drink Industry

Filters

Q = K^1/2L^1/2 w = $2,r = $2 The firm would like to know the minimum cost of producing 2000 units of output.Find the combination of inputs that minimizes the cost of producing 2000 units,the total cost,and identify the expansion path.

The following Cobb-Douglas production function,Q = 1.8L^0.74K^0.36,exhibits

For each of the following functions,describe returns to scale. a.Q = K + L b.Q = K^1/2L^3/4 c.Q = K²L