Question 1

A firm's production function is f(x1, x2) = x1 + 2x2. This means that x2 is twice as expensive as x1.

Accepted Answer

A) True 
 B)False

Question 2

A firm uses 3 factors to produce its output. Its production function is f(x, y, z)  = min{ 2,   }. If the amount of each input is multiplied by 2, its output will be multiplied by A) 27 B) 4 C) 8 D)  0.40. E)  The answer depends on the original choice of x, y, and z." class="answers-bank-image d-inline" rel="preload" > , y2, 2,   }. If the amount of each input is multiplied by 2, its output will be multiplied by A) 27 B) 4 C) 8 D)  0.40. E)  The answer depends on the original choice of x, y, and z." class="answers-bank-image d-inline" rel="preload" > }. If the amount of each input is multiplied by 2, its output will be multiplied by

Accepted Answer

A)  27
B)  4
C)  8
D)   0.40.
E)   The answer depends on the original choice of x, y, and z.

Question 3

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.

Question 4

The UJava espresso stand needs two inputs, labor and coffee beans, to produce its only output, espresso. Producing an espresso always requires the same amount of coffee beans and the same amount of time. Which of the following production functions would appropriately describe the production process at UJava, where B represents ounces of coffee beans, and L represents hours of labor?

Accepted Answer

A)   Q = B0.60L0.40.
B)   Q =+.
C)   Q = min(2B, 60L) .
D)   Q = 0.5B + 0.5L0.5.
E)   None of the above.

Question 5

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 6

The UJava espresso stand needs two inputs, labor and coffee beans, to produce its only output, espresso. Producing an espresso always requires the same amount of coffee beans and the same amount of time. Which of the following production functions would appropriately describe the production process at UJava, where B represents ounces of coffee beans, and L represents hours of labor?

Accepted Answer

A)   Q = 0.5B + 0.5L0.5.
B)   Q = B0.80L0.20.
C)   Q = min(2B, 60L) .
D)   Q =+.
E)   None of the above.

Question 7

For each of the following production functions, draw a diagram showing the general shape of its corresponding isoquant. Comment on the ease at which labor and capital can be substituted for one another relative to the other two production functions.
a. Q = K + L. 
b. Q = K0.5L0.5. 
c. Q = min(K, L).

Accepted Answer

a. Isoquants are straight lines from the...

Question 8

A firm uses 3 factors to produce its output. Its production function is f(x, y, z)  = min{ 2,   }. If the amount of each input is multiplied by 3, its output will be multiplied by A) 27 B) 9 C) 3 D)  0.30. E)  The answer depends on the original choice of x, y, and z." class="answers-bank-image d-inline" rel="preload" > , y2, 2,   }. If the amount of each input is multiplied by 3, its output will be multiplied by A) 27 B) 9 C) 3 D)  0.30. E)  The answer depends on the original choice of x, y, and z." class="answers-bank-image d-inline" rel="preload" > }. If the amount of each input is multiplied by 3, its output will be multiplied by

Accepted Answer

A)  27
B)  9
C)  3
D)   0.30.
E)   The answer depends on the original choice of x, y, and z.

Question 9

A firm has the production function f(x1, x2)  = (xb1 + xb2) c, where b > 0 and c > 0. This firm will have

Accepted Answer

A)  Increasing returns to scale if and only if 2b + c > 1.
B)  Increasing returns to scale if and only if bc > 1.
C)  Increasing returns to scale if and only if b + c > 1.
D)  Constant returns to scale if and only if c = 1.

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

Which of the following production functions exhibit constant returns to scale? In each case y is output and K and L are inputs. (1)  y =  . (2)  y = 3  . (3)  y =  . (4)  y = 2K + 3L.

Accepted Answer

A)   1, 2, and 4
B)   2, 3, and 4
C)   1, 3, and 4
D)   2 and 3
E)   2 and 4

Question 12

A firm has the production function f(x1, x2)  = x0.601x0.302. The isoquant on which output is 1, x2)  = x0.601x0.302. The isoquant on which output is   has the equation A)  x2 = 80x-21. B)  x2 = 80x3.331. C)  = 2. D)  x2 = 80x-0.301. E)  x1 = 0.30x-0.702." class="answers-bank-image d-inline" rel="preload" > has the equation

Accepted Answer

A)   x2 = 80x-21.
B)   x2 = 80x3.331.
C)   = 2.
D)   x2 = 80x-0.301.
E)   x1 = 0.30x-0.702.

Exam 17: Technology

A firm's production function is f(x₁, x₂) = x₁ + 2x₂. This means that x₂ is twice as expensive as x₁.

Correct Answer
verified

For each of the following production functions, draw a diagram showing the general shape of its corresponding isoquant. Comment on the ease at which labor and capital can be substituted for one another relative to the other two production functions. a. Q = K + L. b. Q = K^0.5L^0.5. c. Q = min(K, L).

Correct Answer
verified
a. Isoquants are straight lines from the...
View Answer

A firm uses 3 factors to produce its output. Its production function is f(x, y, z) = min{ , y², }. If the amount of each input is multiplied by 2, its output will be multiplied by

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Which of the following production functions exhibit constant returns to scale? In each case y is output and K and L are inputs. (1) y = . (2) y = 3 . (3) y = . (4) y = 2K + 3L.

Correct Answer
verified

A firm has the production function f(x₁, x₂) = (x^b₁ + x_b²) c, where b > 0 and c > 0. This firm will have

Correct Answer
verified

A firm uses 3 factors to produce its output. Its production function is f(x, y, z) = min{ , y², }. If the amount of each input is multiplied by 3, its output will be multiplied by

Correct Answer
verified

A firm has the production function f(x₁, x₂) = x^0.60₁x^0.30₂. The isoquant on which output is has the equation

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Exam 17: Technology

A firm's production function is f(x1, x2) = x1 + 2x2. This means that x2 is twice as expensive as x1.

Correct AnswerverifiedShow Answer

For each of the following production functions, draw a diagram showing the general shape of its corresponding isoquant. Comment on the ease at which labor and capital can be substituted for one another relative to the other two production functions. a. Q = K + L. b. Q = K0.5L0.5. c. Q = min(K, L).

Correct Answerverifieda. Isoquants are straight lines from the...View AnswerShow Answer

A firm uses 3 factors to produce its output. Its production function is f(x, y, z) = min{ , y2, }. If the amount of each input is multiplied by 2, its output will be multiplied by

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following production functions exhibit constant returns to scale? In each case y is output and K and L are inputs. (1) y = . (2) y = 3 . (3) y = . (4) y = 2K + 3L.

Correct AnswerverifiedShow Answer

A firm has the production function f(x1, x2) = (xb1 + xb2) c, where b > 0 and c > 0. This firm will have

Correct AnswerverifiedShow Answer

A firm uses 3 factors to produce its output. Its production function is f(x, y, z) = min{ , y2, }. If the amount of each input is multiplied by 3, its output will be multiplied by

Correct AnswerverifiedShow Answer

A firm has the production function f(x1, x2) = x0.601x0.302. The isoquant on which output is has the equation

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A firm's production function is f(x₁, x₂) = x₁ + 2x₂. This means that x₂ is twice as expensive as x₁.

Correct Answer
verified

Correct Answer
verified
a. Isoquants are straight lines from the...
View Answer

A firm uses 3 factors to produce its output. Its production function is f(x, y, z) = min{ , y², }. If the amount of each input is multiplied by 2, its output will be multiplied by

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

A firm has the production function f(x₁, x₂) = (x^b₁ + x_b²) c, where b > 0 and c > 0. This firm will have

Correct Answer
verified

A firm uses 3 factors to produce its output. Its production function is f(x, y, z) = min{ , y², }. If the amount of each input is multiplied by 3, its output will be multiplied by

Correct Answer
verified

A firm has the production function f(x₁, x₂) = x^0.60₁x^0.30₂. The isoquant on which output is has the equation

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified