Question 1

We manufacturer automobiles given the production function q = 5KL where q is the number of autos assembled per eight-hour shift,K is the number of robots used on the assembly line (capital) and L is the number of workers hired per hour (labor) .If we use K=10 robots and L=10 workers in order to produce q = 450 autos per shift,then we know that production is:

Accepted Answer

A)  technologically efficient.
B)  technologically inefficient.
C)  maximized.
D)  optimal.

Question 2

When labor usage is at 12 units,output is 36 units.From this we may infer that

Accepted Answer

A)  the marginal product of labor is 3.
B)  the total product of labor is 1/3.
C)  the average product of labor is 3.
D)  none of the above

Question 3

Figure 6.3
-Refer to Figure 6.3.The situation pictured is one of

Accepted Answer

A)  constant returns to scale,because the line through the origin is linear.
B)  decreasing returns to scale,because the isoquants are convex.
C)  decreasing returns to scale,because doubling inputs results in less than double the amount of output.
D)  increasing returns to scale,because the isoquants are convex.
E)  increasing returns to scale,because doubling inputs results in more than double the amount of output.

Question 4

If the isoquants in an isoquant map are downward sloping but bowed away from the origin (i.e.,concave to the origin) ,then the production technology violates the assumption of:

Accepted Answer

A)  technical efficiency.
B)  free disposal.
C)  diminishing marginal returns.
D)  positive average product.

Question 5

With increasing returns to scale,isoquants for unit increases in output become

Accepted Answer

A)  farther and farther apart.
B)  closer and closer together.
C)  the same distance apart.
D)  none of these.

Question 6

Figure 6.3
-The situation pictured in Figure 6.3

Accepted Answer

A)  is one of increasing marginal returns to labor.
B)  is one of increasing marginal returns to capital.
C)  is not consistent with diminishing marginal product of labor or capital.
D)  shows constant returns to scale.
E)  shows diminishing marginal products of labor and capital.

Question 7

For many firms,capital is the production input that is typically fixed in the short run.Which of the following firms would face the longest time required to adjust its capital inputs?

Accepted Answer

A)  Firm that makes DVD players.
B)  Computer chip fabricator
C)  Flat-screen TV manufacturer
D)  Nuclear power plant

Question 8

The marginal product of an input is

Accepted Answer

A)  total product divided by the amount of the input used to produce this amount of output.
B)  the addition to total output that adds nothing to total revenue.
C)  the addition to total output that adds nothing to profit.
D)  the addition to total output due to the addition of one unit of all other inputs.
E)  the addition to total output due to the addition of the last unit of an input,holding all other inputs constant. E

Question 9

When the average product is decreasing,marginal product

Accepted Answer

A)  equals average product.
B)  is increasing.
C)  exceeds average product.
D)  is decreasing.
E)  is less than average product.

Question 10

The short run is

Accepted Answer

A)  less than a year.
B)  three years.
C)  however long it takes to produce the planned output.
D)  a time period in which at least one input is fixed.
E)  a time period in which at least one set of outputs has been decided upon.

Question 11

An important factor that contributes to labor productivity growth is:

Accepted Answer

A)  growth in the capital stock.
B)  technological change.
C)  the standard of living.
D)  A and B only
E)  A,B,and C are correct.

Question 12

A farmer uses M units of machinery and L hours of labor to produce C tons of corn,with the following production function C = L0.5M0.75.This production function exhibits

Accepted Answer

A)  decreasing returns to scale for all output levels.
B)  constant returns to scale for all output levels.
C)  increasing returns to scale for all output levels.
D)  no clear pattern of returns to scale.

Question 13

Consider the following statements when answering this question; I.If a technology exhibits diminishing returns then it also exhibits decreasing return to scale.
II.If a technology exhibits decreasing returns to scale then it also exhibits diminishing returns.

Accepted Answer

A)  I is true,and II is false.
B)  I is false,and II is true.
C)  Both I and II are true.
D)  Both I and II are false.

Question 14

You operate a car detailing business with a fixed amount of machinery (capital) ,but you have recently altered the number of workers that you employ per hour.Three employees can generate an average product of 4 cars per person in each hour,and five employees can generate an average product of 3 cars per person in each hour.What is the marginal product of labor as you increase the labor from three to five employees?

Accepted Answer

A)  MP = 3 cars
B)  MP = 1.5 cars
C)  MP = 15 cars
D)  MP = -1 cars

Question 15

Increasing returns to scale in production means

Accepted Answer

A)  more than 10% as much of all inputs are required to increase output 10%.
B)  less than twice as much of all inputs are required to double output.
C)  more than twice as much of only one input is required to double output.
D)  isoquants must be linear. B

Question 16

An isoquant

Accepted Answer

A)  must be linear.
B)  cannot have a negative slope.
C)  is a curve that shows all the combinations of inputs that yield the same total output.
D)  is a curve that shows the maximum total output as a function of the level of labor input.
E)  is a curve that shows all possible output levels that can be produced at the same cost.

Question 17

Joe owns a small coffee shop,and his production function is q = 3KL where q is total output in cups per hour,K is the number of coffee machines (capital) ,and L is the number of employees hired per hour (labor) .If Joe's capital is currently fixed at K=3 machines,what is his short-run production function?

Accepted Answer

A)  q = 3L
B)  q = 3L2
C)  q = 9L
D)  q = 3K2

Question 18

You are currently using three printing presses and five employees to print 100 sales manuals per hour.If the MRTS at this point is -0.5,then you would be willing to exchange __________ employees for two more printing presses in order to maintain current output.

Accepted Answer

A)  zero
B)  one
C)  two
D)  three

Question 19

A straight-line isoquant

Accepted Answer

A)  is impossible.
B)  would indicate that the firm could switch from one output to another costlessly.
C)  would indicate that the firm could not switch from one output to another.
D)  would indicate that capital and labor cannot be substituted for each other in production.
E)  would indicate that capital and labor are perfect substitutes in production. E

Question 20

Does it make sense to consider the returns to scale of a production function in the short run?

Accepted Answer

A)  Yes,this is an important short-run characteristic of production functions.
B)  Yes,returns to scale determine the diminishing marginal returns of the inputs.
C)  No,returns to scale is a property of the consumer's utility function.
D)  No,we cannot change all of the production inputs in the short run.

Exam 6: Production

Correct Answer
verified

When labor usage is at 12 units,output is 36 units.From this we may infer that

Correct Answer
verified

Figure 6.3 -Refer to Figure 6.3.The situation pictured is one of

Correct Answer
verified

If the isoquants in an isoquant map are downward sloping but bowed away from the origin (i.e.,concave to the origin) ,then the production technology violates the assumption of:

Correct Answer
verified

With increasing returns to scale,isoquants for unit increases in output become

Correct Answer
verified

Figure 6.3 -The situation pictured in Figure 6.3

Correct Answer
verified

For many firms,capital is the production input that is typically fixed in the short run.Which of the following firms would face the longest time required to adjust its capital inputs?

Correct Answer
verified

The marginal product of an input is

Correct Answer
verified
E

When the average product is decreasing,marginal product

Correct Answer
verified

The short run is

Correct Answer
verified

An important factor that contributes to labor productivity growth is:

Correct Answer
verified

A farmer uses M units of machinery and L hours of labor to produce C tons of corn,with the following production function C = L^0.5M^0.75.This production function exhibits

Correct Answer
verified

Consider the following statements when answering this question; I.If a technology exhibits diminishing returns then it also exhibits decreasing return to scale. II.If a technology exhibits decreasing returns to scale then it also exhibits diminishing returns.

Correct Answer
verified

Correct Answer
verified

Increasing returns to scale in production means

Correct Answer
verified
B

An isoquant

Correct Answer
verified

Correct Answer
verified

You are currently using three printing presses and five employees to print 100 sales manuals per hour.If the MRTS at this point is -0.5,then you would be willing to exchange __________ employees for two more printing presses in order to maintain current output.

Correct Answer
verified

A straight-line isoquant

Correct Answer
verified
E

Does it make sense to consider the returns to scale of a production function in the short run?

Correct Answer
verified

Exam 6: Production

Correct AnswerverifiedShow Answer

When labor usage is at 12 units,output is 36 units.From this we may infer that

Correct AnswerverifiedShow Answer

Figure 6.3 -Refer to Figure 6.3.The situation pictured is one of

Correct AnswerverifiedShow Answer

If the isoquants in an isoquant map are downward sloping but bowed away from the origin (i.e.,concave to the origin) ,then the production technology violates the assumption of:

Correct AnswerverifiedShow Answer

With increasing returns to scale,isoquants for unit increases in output become

Correct AnswerverifiedShow Answer

Figure 6.3 -The situation pictured in Figure 6.3

Correct AnswerverifiedShow Answer

For many firms,capital is the production input that is typically fixed in the short run.Which of the following firms would face the longest time required to adjust its capital inputs?

Correct AnswerverifiedShow Answer

The marginal product of an input is

Correct AnswerverifiedE

When the average product is decreasing,marginal product

Correct AnswerverifiedShow Answer

The short run is

Correct AnswerverifiedShow Answer

An important factor that contributes to labor productivity growth is:

Correct AnswerverifiedShow Answer

A farmer uses M units of machinery and L hours of labor to produce C tons of corn,with the following production function C = L0.5M0.75.This production function exhibits

Correct AnswerverifiedShow Answer

Consider the following statements when answering this question; I.If a technology exhibits diminishing returns then it also exhibits decreasing return to scale. II.If a technology exhibits decreasing returns to scale then it also exhibits diminishing returns.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Increasing returns to scale in production means

Correct AnswerverifiedB

An isoquant

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

You are currently using three printing presses and five employees to print 100 sales manuals per hour.If the MRTS at this point is -0.5,then you would be willing to exchange __________ employees for two more printing presses in order to maintain current output.

Correct AnswerverifiedShow Answer

A straight-line isoquant

Correct AnswerverifiedE

Does it make sense to consider the returns to scale of a production function in the short run?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
E

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

A farmer uses M units of machinery and L hours of labor to produce C tons of corn,with the following production function C = L^0.5M^0.75.This production function exhibits

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
B

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
E

Correct Answer
verified