Question 1

With capital on the vertical axis and labor on the horizontal axis,vertical isoquants imply that

Accepted Answer

A)   capital and labor are perfect substitutes.
B)   capital and labor must be used together in a certain proportion.
C)   capital is not productive.
D)   labor is not productive.

Question 2

-The above figure shows the isoquants for producing steel.Increasing returns to scale are

Accepted Answer

A)   present when producing less than 10,000 tons.
B)   present when producing less than 20,000 tons.
C)   present when producing less than 30,000 tons.
D)   never present.

Question 3

Each additional worker produces two extra units of output until the first three units are produced for some production function.After the third unit is produced each additional worker produces one extra unit of output.What are the total product of labor,average product of labor and marginal product of labor for the first five units of production associated with this production function?

Accepted Answer

The answer of Each additional worker produces two extra units...

Question 4

Suppose the production of mp3 players can be represented by the following production function: q = L0.4K0.4. Which of the following statements is TRUE?

Accepted Answer

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.

Question 5

-The above figure shows the short-run production function for Albert's Pretzels.The marginal productivity of labor for the third worker is

Accepted Answer

A)   6.
B)   8.
C)   24.
D)   not known from the information provided.

Question 6

-The table in the above figure shows the levels of output resulting from different levels of inputs.Returns to scale are greatest at which level of output?

Accepted Answer

A)   100-200 units
B)   200-400 units
C)   400-600 units
D)   There is insufficient information to answer the question.

Question 7

-The above figure 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 8

-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 9

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

Question 10

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

Accepted Answer

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

Question 11

A production function tells the firm

Accepted Answer

A)   the maximum it can expect to produce with a given mix of inputs.
B)   the average it can expect to produce with a given mix of inputs.
C)   the minimum it can expect to produce with a given mix of inputs.
D)   the average level of production for other firms in the industry.

Question 12

-The above figure shows the isoquants for producing steel.When producing less than 10,000 tons there are

Accepted Answer

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

Question 13

The implementation of the assembly line is an example of 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 14

Which entity produces the greatest proportion of U.S.gross national product?

Accepted Answer

A)   government
B)   non-profit organizations such as hospitals
C)   firms
D)   universities

Question 15

-The above figure shows the isoquants for producing steel.When producing more than 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 16

Economists typically assume that the owners of firms wish to

Accepted Answer

A)   produce efficiently.
B)   maximize sales revenues.
C)   maximize profits.
D)   All of the above.

Question 17

Average productivity will fall as long as

Accepted Answer

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

Question 18

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 19

-The above figure shows the short-run production function for Albert's Pretzels.The marginal productivity of labor equals the average productivity of labor

Accepted Answer

A)   for all levels of labor.
B)   at none of the levels of labor.
C)   only for the first worker.
D)   only for the fifth worker.

Question 20

During the "computer revolution" of the 1980s and 1990s,many firms replaced old technology with new technology.What might explain why firms don't change technology as quickly today?

Accepted Answer

The marginal rate of technical substitut...

Exam 6: Firms and Production

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

Correct Answer
verified

During the "computer revolution" of the 1980s and 1990s,many firms replaced old technology with new technology.What might explain why firms don't change technology as quickly today?

Correct Answer
verified
The marginal rate of technical substitut...
View Answer

-The above figure shows the short-run production function for Albert's Pretzels.The marginal productivity of labor for the third worker is

Correct Answer
verified

The implementation of the assembly line is an example of how

Correct Answer
verified

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

Let the production function be q = AL^aK^b.The function exhibits constant returns to scale if

Correct Answer
verified

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

Average productivity will fall as long as

Correct Answer
verified

Economists typically assume that the owners of firms wish to

Correct Answer
verified

Which entity produces the greatest proportion of U.S.gross national product?

Correct Answer
verified

-The above figure shows the isoquants for producing steel.When producing more than 20,000 tons there are

Correct Answer
verified

With capital on the vertical axis and labor on the horizontal axis,vertical isoquants imply that

Correct Answer
verified

-The above figure shows the short-run production function for Albert's Pretzels.The marginal productivity of labor equals the average productivity of labor

Correct Answer
verified

A production function tells the firm

Correct Answer
verified

Suppose the production of mp3 players can be represented by the following production function: q = L^0.4K^0.4.Which of the following statements is TRUE?

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

-The table in the above figure shows the levels of output resulting from different levels of inputs.Returns to scale are greatest at which level of output?

Correct Answer
verified

-The above figure shows the isoquants for producing steel.When producing less than 10,000 tons there are

Correct Answer
verified

-The above figure shows the isoquants for producing steel.Increasing returns to scale are

Correct Answer
verified

Exam 6: Firms and Production

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

Correct AnswerverifiedShow Answer

During the "computer revolution" of the 1980s and 1990s,many firms replaced old technology with new technology.What might explain why firms don't change technology as quickly today?

Correct AnswerverifiedThe marginal rate of technical substitut...View AnswerShow Answer

-The above figure shows the short-run production function for Albert's Pretzels.The marginal productivity of labor for the third worker is

Correct AnswerverifiedShow Answer

The implementation of the assembly line is an example of how

Correct AnswerverifiedShow Answer

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

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

Correct AnswerverifiedShow Answer

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

Average productivity will fall as long as

Correct AnswerverifiedShow Answer

Economists typically assume that the owners of firms wish to

Correct AnswerverifiedShow Answer

Which entity produces the greatest proportion of U.S.gross national product?

Correct AnswerverifiedShow Answer

-The above figure shows the isoquants for producing steel.When producing more than 20,000 tons there are

Correct AnswerverifiedShow Answer

With capital on the vertical axis and labor on the horizontal axis,vertical isoquants imply that

Correct AnswerverifiedShow Answer

-The above figure shows the short-run production function for Albert's Pretzels.The marginal productivity of labor equals the average productivity of labor

Correct AnswerverifiedShow Answer

A production function tells the firm

Correct AnswerverifiedShow Answer

Suppose the production of mp3 players can be represented by the following production function: q = L0.4K0.4. Which of the following statements is TRUE?

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

-The table in the above figure shows the levels of output resulting from different levels of inputs.Returns to scale are greatest at which level of output?

Correct AnswerverifiedShow Answer

-The above figure shows the isoquants for producing steel.When producing less than 10,000 tons there are

Correct AnswerverifiedShow Answer

-The above figure shows the isoquants for producing steel.Increasing returns to scale are

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
The marginal rate of technical substitut...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Let the production function be q = AL^aK^b.The function exhibits constant returns to scale if

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Suppose the production of mp3 players can be represented by the following production function: q = L^0.4K^0.4.Which of the following statements is TRUE?

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
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