Question 1

L-shaped isoquants imply that production requires that the inputs

Accepted Answer

A)  are perfect substitutes.
B)  are imperfect substitutes.
C)  cannot be used together.
D)  must be used together in a certain proportion.

Question 2

Which of the following is NOT a factor of production?

Accepted Answer

A)  labor
B)  capital
C)  money
D)  materials

Question 3

Which of the following statements is TRUE in the short run?

Accepted Answer

A)  Generally, labor is a fixed input.
B)  Generally, capital is a fixed input.
C)  Raw materials are generally considered to be fixed inputs.
D)  None of the above.

Question 4

Which of the following statements is TRUE?

Accepted Answer

A)  Labor is always a variable input, whereas Capital is always a fixed input.
B)  Labor is always a fixed input, whereas Capital is always a variable input.
C)  Labor can be a fixed input., and Capital can be a variable input.
D)  Labor can be a fixed input, and Capital is always a fixed input.

Question 5

Thomas Malthus' prediction of mass starvation resulting from diminishing marginal returns has NOT been fulfilled because

Accepted Answer

A)  the law of diminishing marginal returns did not hold in this case.
B)  Malthus ignored other factors like technological change.
C)  relative to Malthus' day, a larger percentage of today's labor force works in the agricultural sector.
D)  All of the above.

Question 6

One way to explain the convexity of isoquants is to say that

Accepted Answer

A)  as labor increases and capital decreases, MPL rises while MPK falls.
B)  as labor increases and capital decreases, MPL falls while MPK rises.
C)  as labor increases and capital decreases, MPL and MPK both fall.
D)  as labor increases and capital decreases, MPL and MPK both rise.

Question 7

Given the production function q = 4LK, what is the marginal product of labor when capital is fixed at 25?

Accepted Answer

A)  4K
B)  100
C)  100K
D)  100L

Question 8

-According to the table above, clothing production exhibits

Accepted Answer

A)  decreasing returns to scale.
B)  constant returns to scale.
C)  increasing returns to scale.
D)  varying returns to scale.

Question 9

Which of the following statements is TRUE?

Accepted Answer

A)  A Cobb-Douglas production function can have different returns to scale at different output levels.
B)  It is impossible to have increasing returns to scale for one output level, and decreasing returns to scale for a different output level.
C)  It is possible to have increasing returns to scale for one output level, and decreasing returns to scale for a different output level.
D)  None of the above.

Question 10

Which of the following is NOT an output of the production function?

Accepted Answer

A)  a haircut
B)  a share of Acme Corporation stock
C)  a case of soda pop
D)  an extra-large pepperoni pizza

Question 11

-The above table shows the short-run production function for Albert's Pretzels. The marginal product of labor equals the average product of labor

Accepted Answer

A)  for all levels of labor.
B)  at none of the levels of labor.
C)  only for the first worker.
D)  only for the fifth worker.

Question 12

Returns to scale is a concept that operates

Accepted Answer

A)  only in the short run.
B)  only in the long run.
C)  in both the long run and the short run.
D)  in either the long run or the short run depending on the industry of the firm.

Question 13

Which of the following statements best describes a production function?

Accepted Answer

A)  The maximum profit generated from given levels of inputs.
B)  The maximum level of output generated from given levels of inputs.
C)  All levels of output that can be generated from given levels of inputs.
D)  All levels of inputs that could produce a given level of output.

Question 14

If a firm doubles inputs and produces three times the output, then there are

Accepted Answer

A)  constant returns to scale.
B)  increasing marginal returns.
C)  decreasing returns to scale.
D)  increasing returns to scale.

Question 15

Given the production function q = 1.37LK, what is the marginal product of labor?

Accepted Answer

A)  1.37
B)  0
C)  1.37K
D)  Cannot be determined with the information given.

Question 16

Explain how firms that each produce as efficiently as they can may not be equally productive.

Accepted Answer

Firm-specific characteristics ...

Question 17

At any given point on the curve, the slope of the total product curve always equals

Accepted Answer

A)  the ratio of the marginal product and the average product.
B)  the change in input divided by the change in output.
C)  the average product of the input.
D)  the marginal product of the input.

Question 18

If capital increases by two units, and MRTS is 1, then what is the MPL?

Accepted Answer

A)  2
B)  1/2
C)  1
D)  Not enough information given.

Question 19

If a firm cuts inputs in half, and output falls by more than half, then there are

Accepted Answer

A)  increasing returns to scale.
B)  decreasing returns to scale.
C)  constant returns to scale.
D)  decreasing marginal returns.

Question 20

A factor of production that cannot be easily changed in the relevant time period is called a

Accepted Answer

A)  short-run factor.
B)  fixed input.
C)  variable input.
D)  production anchor.

Exam 5: Production

Which of the following statements best describes a production function?

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Thomas Malthus' prediction of mass starvation resulting from diminishing marginal returns has NOT been fulfilled because

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Given the production function q = 4LK, what is the marginal product of labor when capital is fixed at 25?

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Which of the following statements is TRUE in the short run?

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Explain how firms that each produce as efficiently as they can may not be equally productive.

Correct AnswerverifiedFirm-specific characteristics ...View AnswerShow Answer

Which of the following statements is TRUE?

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If a firm doubles inputs and produces three times the output, then there are

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L-shaped isoquants imply that production requires that the inputs

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Which of the following statements is TRUE?

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If a firm cuts inputs in half, and output falls by more than half, then there are

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If capital increases by two units, and MRTS is 1, then what is the MPL?

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-The above table shows the short-run production function for Albert's Pretzels. The marginal product of labor equals the average product of labor

Correct AnswerverifiedShow Answer

One way to explain the convexity of isoquants is to say that

Correct AnswerverifiedShow Answer

At any given point on the curve, the slope of the total product curve always equals

Correct AnswerverifiedShow Answer

A factor of production that cannot be easily changed in the relevant time period is called a

Correct AnswerverifiedShow Answer

Which of the following is NOT an output of the production function?

Correct AnswerverifiedShow Answer

-According to the table above, clothing production exhibits

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Which of the following is NOT a factor of production?

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Given the production function q = 1.37LK, what is the marginal product of labor?

Correct AnswerverifiedShow Answer

Returns to scale is a concept that operates

Correct AnswerverifiedShow Answer

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Firm-specific characteristics ...
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If capital increases by two units, and MRTS is 1, then what is the MP_L?

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