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If the marginal product of labor is constant for all levels of output,then the average product of labor


A) is constant.
B) equals the marginal product of labor.
C) Both A and B above.
D) Either A or B above but not both.

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Lectures in microeconomics can be delivered either by an instructor (labor) or a movie (capital) or any combination of both.Each minute of the instructor's time delivers the same amount of information as a minute of the movie.Which graph in the above figure best represents the isoquants for lectures in microeconomics when capital per day is on the vertical axis and labor per day is on the horizontal axis?


A) Graph A
B) Graph B
C) Graph C
D) Graph D

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


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, larger percentage of today's labor works in the agricultural sector.
D) All of the above.

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Which of the following statements is TRUE?


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.

Correct Answer

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Returns to scale refers to the change in output when


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

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Suppose the production of DVD players can be represented by the following production function: q = Suppose the production of DVD players can be represented by the following production function: q = .Which of the following statements is TRUE? A) The production function has decreasing returns to scale. B) The production function has increasing returns to scale. C) The production function has constant returns to scale. D) Returns to scale vary with the level of output. Suppose the production of DVD players can be represented by the following production function: q = .Which of the following statements is TRUE? A) The production function has decreasing returns to scale. B) The production function has increasing returns to scale. C) The production function has constant returns to scale. D) Returns to scale vary with the level of output. .Which of the following statements is TRUE?


A) The production function has decreasing returns to scale.
B) The production function has increasing returns to scale.
C) The production function has constant returns to scale.
D) Returns to scale vary with the level of output.

Correct Answer

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Let the production function be q=ALᡃKᡇ.The function exhibits constant returns to scale if


A) a + b = 1.
B) a + b > 1.
C) a + b < 1.
D) Cannot be determined with the information given.

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Which of the following is least likely to be considered a capital input?


A) a sewing machine
B) a tractor
C) a telephone
D) a ten dollar bill

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Returns to scale is a concept that operates


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 but never both.

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Which graph in the above figure represents the isoquants where,as the amount of labor used increases and the amount of capital used decreases,the marginal product of labor rises (units of capital per day is on the vertical axis and units of labor per day is on the horizontal axis) ?


A) Graph A
B) Graph B
C) Graph C
D) Graph D

Correct Answer

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-The above figure shows the isoquants for producing steel.When producing between 10,000 and 20,000 tons there are A) increasing returns to scale. B) decreasing returns to scale. C) constant returns to scale. D) economies of scale. -The above figure shows the isoquants for producing steel.When producing between 10,000 and 20,000 tons there are


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

Correct Answer

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Returns to specialization can occur when


A) increasing the amount of labor allows individuals to specialize.
B) the exponents of the Cobb-Douglas production function are greater than 1.
C) a firm doubles its inputs.
D) the average cost curve is above the marginal costs curve.

Correct Answer

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Which of the following market structures is likely to have the lowest productivity,given identical inputs?


A) oligopoly
B) monopsony
C) competitive
D) monopoly

Correct Answer

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


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

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The slope of an isoquant


A) gives the substitutability of inputs while keeping output constant.
B) shows how output varies while keeping inputs constant.
C) is independent of the marginal product of capital.
D) shows the firm's returns to scale.

Correct Answer

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Which of the following inputs is normally considered to be variable in the short run?


A) labor
B) raw materials
C) capital
D) Both A and B

Correct Answer

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


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.

Correct Answer

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The Average Product of Labor is


A) the change in total product resulting from an extra unit of labor, holding other factors constant.
B) the ratio of output to the number of workers used to produce that output.
C) the amount of output that can be produced by a given amount of labor.
D) equal to the marginal product of labor when the average product is increasing.

Correct Answer

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Consider Johnson Mechanical is the only seller in its particular regional market.On the other hand,Amato Mechanical is one of twenty sellers in its particular regional market.All else equal,we would expect


A) Johnson Mechanical to be relatively more productive than Amato Mechanical.
B) Amato Mechanical to be relatively more productive than Johnson Mechanical.
C) no difference in productivity between the two firms.
D) Amato Mechanical might be more productive than Johnson Mechanical, but only if management for Amato Mechanical is a sole proprietorship.

Correct Answer

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An isoquant represents levels of capital and labor that


A) have constant marginal productivity.
B) yield the same level of output.
C) incur the same total cost.
D) All of the above.

Correct Answer

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