Question 1

Isoquants

Accepted Answer

A)  hold utility constant.
B)  hold capital constant.
C)  hold labor constant.
D)  hold output constant.

Question 2

Which of the following is an input to the production process?

Accepted Answer

A)  a janitor's time
B)  a cement mixer
C)  Both A and B.
D)  None of the above.

Question 3

Suppose that additional units of capital affect the marginal productivity of labor. This is not unrealistic. Word processors increase the marginal productivity of secretaries. On the other hand, robotic equipment can completely replace a worker and, thereby, lower the marginal productivity of labor. Given this possibility, determine the conditions under which isoquants will not be convex (i.e., concave).

Accepted Answer

The slope of the isoquant equals -MP_L/MP_K....

Question 4

With respect to production, the short run is best defined as a time period

Accepted Answer

A)  lasting about six months.
B)  lasting about two years.
C)  in which all inputs are fixed.
D)  in which at least one input is fixed.

Question 5

-The above figure shows the isoquants for producing steel. When producing between 10,000 and 20,000 tons, there are

Accepted Answer

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

Question 6

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

Accepted Answer

A)  increases first and then decreases.
B)  decreases first and then increases.
C)  decreases throughout.
D)  increases throughout.

Question 7

Which of the following is likely to have the longest long run?

Accepted Answer

A)  a beauty salon.
B)  a pizza parlor.
C)  a road construction firm.
D)  an airline.

Question 8

Average product will fall as long as

Accepted Answer

A)  marginal product is falling.
B)  it exceeds marginal product.
C)  it is less than marginal product.
D)  the number of workers is increasing.

Question 9

The actual time length of the short run is determined by when diminishing marginal returns start.

Accepted Answer

A) True 
 B)False

Question 10

Over a five-year span, the ABC Co. reduced the amount of labor it hired. At the same time, the marginal productivity of labor increased. Which of the following COULD explain this observation?

Accepted Answer

A)  the law of diminishing marginal returns
B)  labor saving technical change
C)  organizational innovation
D)  All of the above.

Question 11

The length of the short run is the same for all firms.

Accepted Answer

A) True 
 B)False

Question 12

Given the production function q = 4L + K, what is formula for the marginal product of labor?

Accepted Answer

A)  4
B)  4 + K
C)  4K
D)  Cannot be determined with the information given.

Question 13

Returns to scale refers to the change in output when

Accepted Answer

A)  all inputs increase proportionately.
B)  labor increases holding all other inputs fixed.
C)  capital equipment is doubled.
D)  specialization improves.

Question 14

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

Accepted Answer

A)  Generally, labor is a variable input.
B)  Generally, capital is a variable input.
C)  Raw materials are generally considered to be fixed inputs.
D)  Whether or not an input is considered fixed is dependent on the price paid for the input.

Question 15

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

Accepted Answer

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

Question 16

The implementation of the assembly line is an example how

Accepted Answer

A)  changes in the organization of production improve productivity.
B)  neutral technical change improves productivity.
C)  non-neutral technical change can decrease productivity.
D)  labor saving technical change increases economy-wide unemployment.

Question 17

Suppose the production of DVD players can be represented by the following production function: q = L0.4K0.4. Which of the following statements is (are) TRUE?

Accepted Answer

A)  The production function has decreasing returns to scale.
B)  The marginal productivity of labor falls as labor increases in the short run.
C)  Capital and labor can be substituted for one another.
D)  All of the above.

Question 18

Joey cuts lawns during the summer. Let q equal the number of acres mowed per day, and let L equal the number of hours worked per day. Joey never works more than eight hours per day, and during that time his short-run production function is q = 0.2 ∗ L. Which of the following statements is FALSE?

Accepted Answer

A)  Joey's marginal product equals his average product.
B)  Joey's marginal product diminishes by 0.2 for each additional hour worked.
C)  Joey's average product is constant.
D)  Joey's marginal product is constant.

Question 19

If production function q1 = f(L, K) , which of the following production functions illustrates neutral technical progress?

Accepted Answer

A)  q2 = f(1.25L, 1.25K) 
B)  q2 = f(1.25L, K) 
C)  q2 = f(L, 1.25K) 
D)  q2 = 1.25 ∗ f(L, K)

Question 20

Suppose the production of DVD players can be represented by the following production function: q = L0.4K0.4. The firm currently produces q1 units. If all inputs doubled, the new level of output will equal

Accepted Answer

A)  20.4 ∗ q1.
B)  20.8 ∗ q1.
C)  0.8 ∗ q1.
D)  1.6 ∗ q1.

Exam 5: Production

Joey cuts lawns during the summer. Let q equal the number of acres mowed per day, and let L equal the number of hours worked per day. Joey never works more than eight hours per day, and during that time his short-run production function is q = 0.2 ∗ L. Which of the following statements is FALSE?

Correct Answer
verified

-The above figure shows the isoquants for producing steel. When producing between 10,000 and 20,000 tons, there are

Correct Answer
verified

Over a five-year span, the ABC Co. reduced the amount of labor it hired. At the same time, the marginal productivity of labor increased. Which of the following COULD explain this observation?

Correct Answer
verified

Average product will fall as long as

Correct Answer
verified

The implementation of the assembly line is an example how

Correct Answer
verified

Which of the following is likely to have the longest long run?

Correct Answer
verified

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

Correct Answer
verified

Suppose the production of DVD players can be represented by the following production function: q = L^0.4K^0.4. The firm currently produces q1 units. If all inputs doubled, the new level of output will equal

Correct Answer
verified

Correct Answer
verified
The slope of the isoquant equals -MP_L/MP_K....
View Answer

Returns to scale refers to the change in output when

Correct Answer
verified

If production function q1 = f(L, K) , which of the following production functions illustrates neutral technical progress?

Correct Answer
verified

Isoquants

Correct Answer
verified

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

Correct Answer
verified

Which of the following is an input to the production process?

Correct Answer
verified

Given the production function q = 4L + K, what is formula for the marginal product of labor?

Correct Answer
verified

Suppose the production of DVD players can be represented by the following production function: q = L^0.4K^0.4. Which of the following statements is (are) TRUE?

Correct Answer
verified

The actual time length of the short run is determined by when diminishing marginal returns start.

Correct Answer
verified

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

Correct Answer
verified

The length of the short run is the same for all firms.

Correct Answer
verified

With respect to production, the short run is best defined as a time period

Correct Answer
verified

Exam 5: Production

Joey cuts lawns during the summer. Let q equal the number of acres mowed per day, and let L equal the number of hours worked per day. Joey never works more than eight hours per day, and during that time his short-run production function is q = 0.2 ∗ L. Which of the following statements is FALSE?

Correct AnswerverifiedShow Answer

-The above figure shows the isoquants for producing steel. When producing between 10,000 and 20,000 tons, there are

Correct AnswerverifiedShow Answer

Over a five-year span, the ABC Co. reduced the amount of labor it hired. At the same time, the marginal productivity of labor increased. Which of the following COULD explain this observation?

Correct AnswerverifiedShow Answer

Average product will fall as long as

Correct AnswerverifiedShow Answer

The implementation of the assembly line is an example how

Correct AnswerverifiedShow Answer

Which of the following is likely to have the longest long run?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Suppose the production of DVD players can be represented by the following production function: q = L0.4K0.4. The firm currently produces q1 units. If all inputs doubled, the new level of output will equal

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe slope of the isoquant equals -MPL/MPK....View AnswerShow Answer

Returns to scale refers to the change in output when

Correct AnswerverifiedShow Answer

If production function q1 = f(L, K) , which of the following production functions illustrates neutral technical progress?

Correct AnswerverifiedShow Answer

Isoquants

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is an input to the production process?

Correct AnswerverifiedShow Answer

Given the production function q = 4L + K, what is formula for the marginal product of labor?

Correct AnswerverifiedShow Answer

Suppose the production of DVD players can be represented by the following production function: q = L0.4K0.4. Which of the following statements is (are) TRUE?

Correct AnswerverifiedShow Answer

The actual time length of the short run is determined by when diminishing marginal returns start.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The length of the short run is the same for all firms.

Correct AnswerverifiedShow Answer

With respect to production, the short run is best defined as a time period

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Suppose the production of DVD players can be represented by the following production function: q = L^0.4K^0.4. The firm currently produces q1 units. If all inputs doubled, the new level of output will equal

Correct Answer
verified

Correct Answer
verified
The slope of the isoquant equals -MP_L/MP_K....
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Suppose the production of DVD players can be represented by the following production function: q = L^0.4K^0.4. Which of the following statements is (are) TRUE?

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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