Question 1

Say you own a Mexican place that produces, among other things, Mexican burritos. The marginal product of your last worker was 5. If the marginal rate of technical substitution between capital and labor is 0.5, then marginal product of capital is

Accepted Answer

A)  10.
B)  5.
C)  1.
D)  we can't say with the information given

Question 2

If the owner of an ice-cream stand told a student looking for summer work that he would not hire him even if he worked for nothing, we can infer that

Accepted Answer

A)  the marginal product of the labor is zero or less.
B)  the average product of labor is rising.
C)  the marginal product of labor is rising.
D)  the owner is producing at the lowest cost.

Question 3

Returns to scale refers to

Accepted Answer

A)  what happens to output when at least one input is fixed and one is varied.
B)  what happens to output when all inputs are held fixed.
C)  what happens to output when all inputs are varied in some proportion.
D)  the law of diminishing returns.

Question 4

In conceptual production functions, technological change is

Accepted Answer

A)  treated like an addition to the capital stock.
B)  treated as a movement upward along a given production function.
C)  a factor that eliminates diminishing returns to a production function.
D)  not considered and is therefore assumed to be constant in all deliberations.

Question 5

Say you are the owner of a Pizza place. You know that when you produce 10 pizzas, the average product of each of your workers is 10, and the marginal product of your last worker is 15. From this information you know that

Accepted Answer

A)  the marginal product is increasing.
B)  the average product is increasing.
C)  the average product is decreasing.
D)  the marginal product is decreasing.

Question 6

Say you own a Mexican place that produces, among other things, Mexican burritos. Your production of burritos is given by the equation Q = 6KL2, where Q is the amount of burritos, K is the amount of capital and L is the amount of labor. How many workers would you need to use in order to minimize the cost of producing 100 burritos when the capital is, K, is 20?

Accepted Answer

A)  1
B)  2
C)  4
D)  0

Question 7

In a typical short-run production function, before diminishing returns set in, the slope of the total product curve

Accepted Answer

A)  is decreasing.
B)  is increasing.
C)  rises and then falls before diminishing returns sets in.
D)  falls and then rises before diminishing returns sets in.

Question 8

In the long run

Accepted Answer

A)  all inputs are fixed.
B)  only capital inputs are fixed.
C)  all intermediate goods are fixed.
D)  all inputs are variable.

Question 9

Geometrically, the marginal product

Accepted Answer

A)  is the slope of the line joining the origin to the corresponding point on the total product curve.
B)  at any point is the slope of the total product curve at that point.
C)  is that point at which the total product curve exhibits diminishing returns.
D)  is the slope of the average product curve.

Question 10

If capital and labor are perfect substitutes in a production function, the isoquants for this function will be

Accepted Answer

A)  concave from above.
B)  convex from above.
C)  a straight line.
D)  any one of these depending on the particular combination of labor and capital employed.

Question 11

(Appendix) In the production function Q = 10L1/2K1/2, is diminishing returns a characteristic of this production function?

Accepted Answer

Question 12

Suppose you are using 10 units of labor in your short-run production process. At this point, the average product of your labor is 10, and the marginal product of the last unit of labor was 14. Given this, we know that the

Accepted Answer

A)  average product of labor must be increasing.
B)  average product of labor must be decreasing.
C)  marginal product of labor must be increasing.
D)  marginal product of labor must be decreasing.

Question 13

(Appendix) A daily production function for calculators is Q = 12L2 - L3. Show all your work for the following questions.
a) What is the marginal product equation for labor?
b) What is the APL function?

Accepted Answer

a) MPL = 24L - 3L²; b) APL = 12L - L²

Question 14

In a value added production function like the one used in the text, raw materials are

Accepted Answer

A)  counted as inputs in a production process.
B)  called intermediate goods.
C)  are counted in the final product of any production process as part of the value of output.
D)  called final goods.

Question 15

Sketch a long-run production function with isoquants numbered so that the graph clearly shows increasing returns to scale over the entire range of production.

Accepted Answer

The sketch should have isoquan...

Question 16

The average product of a variable input

Accepted Answer

A)  decreases at an increasing rate.
B)  constantly rises over the relevant range of production.
C)  is the change in the total product that occurs when the variable input increases one unit.
D)  is defined as the total product divided by the quantity of the variable input.

Question 17

If climate change starts creating earthquakes, storms, droughts and all manner of obstacles to production operations, the effects can be shown on effected production function graphs by

Accepted Answer

A)  eliminating the increasing returns portion of the short run production function.
B)  lowering the short run production function and reducing the numbers on each isoquant.
C)  changing the curves of the isoquants to straight lines.
D)  eliminating long run production functions because they are irrelevant.

Question 18

For production functions with decreasing returns to scale, a proportional increase in output

Accepted Answer

A)  requires a less-than-proportional growth in all inputs.
B)  requires a more-than-proportional growth in all inputs.
C)  exhibits diminishing returns.
D)  requires proportional growth in all inputs.

Question 19

What will happen to a typical isoquant if robots become increasingly good at doing manual and mental labor?

Accepted Answer

A)  Isoquants will become much steeper.
B)  Isoquants will not change but movement will occur upward on the curve.
C)  Isoquants will become much flatter.
D)  Isoquants will become a negatively sloped straight line. C

Question 20

If a chef and her equipment transform $50 worth of raw foodstuff into a meal with a total value of $150, the resulting output would be

Accepted Answer

A)  measured as the $150 total value.
B)  referred to as an intermediate product.
C)  measured as the $100 of value added.
D)  measured as $200 of value added. C

Exam 8: Production

Say you own a Mexican place that produces, among other things, Mexican burritos. The marginal product of your last worker was 5. If the marginal rate of technical substitution between capital and labor is 0.5, then marginal product of capital is

Correct Answer
verified

If the owner of an ice-cream stand told a student looking for summer work that he would not hire him even if he worked for nothing, we can infer that

Correct Answer
verified

Returns to scale refers to

Correct Answer
verified

In conceptual production functions, technological change is

Correct Answer
verified

Say you are the owner of a Pizza place. You know that when you produce 10 pizzas, the average product of each of your workers is 10, and the marginal product of your last worker is 15. From this information you know that

Correct Answer
verified

Correct Answer
verified

In a typical short-run production function, before diminishing returns set in, the slope of the total product curve

Correct Answer
verified

In the long run

Correct Answer
verified

Geometrically, the marginal product

Correct Answer
verified

If capital and labor are perfect substitutes in a production function, the isoquants for this function will be

Correct Answer
verified

(Appendix) In the production function Q = 10L^1/2K^1/2, is diminishing returns a characteristic of this production function?

Correct Answer
verified

Suppose you are using 10 units of labor in your short-run production process. At this point, the average product of your labor is 10, and the marginal product of the last unit of labor was 14. Given this, we know that the

Correct Answer
verified

(Appendix) A daily production function for calculators is Q = 12L² - L³. Show all your work for the following questions. a) What is the marginal product equation for labor? b) What is the APL function?

Correct Answer
verified
a) MPL = 24L - 3L²; b) APL = 12L - L²

In a value added production function like the one used in the text, raw materials are

Correct Answer
verified

Sketch a long-run production function with isoquants numbered so that the graph clearly shows increasing returns to scale over the entire range of production.

Correct Answer
verified
The sketch should have isoquan...
View Answer

The average product of a variable input

Correct Answer
verified

If climate change starts creating earthquakes, storms, droughts and all manner of obstacles to production operations, the effects can be shown on effected production function graphs by

Correct Answer
verified

For production functions with decreasing returns to scale, a proportional increase in output

Correct Answer
verified

What will happen to a typical isoquant if robots become increasingly good at doing manual and mental labor?

Correct Answer
verified
C

If a chef and her equipment transform $50 worth of raw foodstuff into a meal with a total value of $150, the resulting output would be

Correct Answer
verified
C

Exam 8: Production

Say you own a Mexican place that produces, among other things, Mexican burritos. The marginal product of your last worker was 5. If the marginal rate of technical substitution between capital and labor is 0.5, then marginal product of capital is

Correct AnswerverifiedShow Answer

If the owner of an ice-cream stand told a student looking for summer work that he would not hire him even if he worked for nothing, we can infer that

Correct AnswerverifiedShow Answer

Returns to scale refers to

Correct AnswerverifiedShow Answer

In conceptual production functions, technological change is

Correct AnswerverifiedShow Answer

Say you are the owner of a Pizza place. You know that when you produce 10 pizzas, the average product of each of your workers is 10, and the marginal product of your last worker is 15. From this information you know that

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In a typical short-run production function, before diminishing returns set in, the slope of the total product curve

Correct AnswerverifiedShow Answer

In the long run

Correct AnswerverifiedShow Answer

Geometrically, the marginal product

Correct AnswerverifiedShow Answer

If capital and labor are perfect substitutes in a production function, the isoquants for this function will be

Correct AnswerverifiedShow Answer

(Appendix) In the production function Q = 10L1/2K1/2, is diminishing returns a characteristic of this production function?

Correct AnswerverifiedShow Answer

Suppose you are using 10 units of labor in your short-run production process. At this point, the average product of your labor is 10, and the marginal product of the last unit of labor was 14. Given this, we know that the

Correct AnswerverifiedShow Answer

(Appendix) A daily production function for calculators is Q = 12L2 - L3. Show all your work for the following questions. a) What is the marginal product equation for labor? b) What is the APL function?

Correct Answerverifieda) MPL = 24L - 3L2; b) APL = 12L - L2

In a value added production function like the one used in the text, raw materials are

Correct AnswerverifiedShow Answer

Sketch a long-run production function with isoquants numbered so that the graph clearly shows increasing returns to scale over the entire range of production.

Correct AnswerverifiedThe sketch should have isoquan...View AnswerShow Answer

The average product of a variable input

Correct AnswerverifiedShow Answer

If climate change starts creating earthquakes, storms, droughts and all manner of obstacles to production operations, the effects can be shown on effected production function graphs by

Correct AnswerverifiedShow Answer

For production functions with decreasing returns to scale, a proportional increase in output

Correct AnswerverifiedShow Answer

What will happen to a typical isoquant if robots become increasingly good at doing manual and mental labor?

Correct AnswerverifiedC

If a chef and her equipment transform $50 worth of raw foodstuff into a meal with a total value of $150, the resulting output would be

Correct AnswerverifiedC

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(Appendix) In the production function Q = 10L^1/2K^1/2, is diminishing returns a characteristic of this production function?

Correct Answer
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Correct Answer
verified

(Appendix) A daily production function for calculators is Q = 12L² - L³. Show all your work for the following questions. a) What is the marginal product equation for labor? b) What is the APL function?

Correct Answer
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a) MPL = 24L - 3L²; b) APL = 12L - L²

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The sketch should have isoquan...
View Answer

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C

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C