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Exam 19:Technology-Part A

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Question 1

Multiple Choice

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In any production process,the marginal product of labor equals

A) the value of total output minus the cost of the fixed capital stock.
B) the change in output per unit change in labor input for "small" changes in the amount of input.
C) total output divided by total labor inputs.
D) total output produced with the given labor inputs.
E) the average output of the least-skilled workers employed by the firm.

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B

Question 2

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A firm uses only two inputs to produce its output.These inputs are perfect substitutes.This firm

A) must have increasing returns to scale.
B) must have constant returns to scale.
C) could have increasing returns to scale,constant returns to scale,or decreasing returns to scale.
D) must have decreasing returns to scale.
E) must have decreasing returns to scale in the short run and constant returns to scale in the long run.

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Question 3

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A firm has the production function f(X,Y) =X^3/4 Y^1/4,where X is the amount of factor x used and Y is the amount of factor y used.On a diagram we put X on the horizontal axis and Y on the vertical axis.We draw some isoquants.Now we draw a straight line on the graph and we notice that wherever this line meets an isoquant,the isoquant has a slope of-9.The straight line we drew

If the production function is f(x,y)=min{12x,3y},then there is convexity in production.

A firm has the production function f(x,y) = x+min{x,y}.The isoquants for the firm

A firm has two variable factors and a production function f(x₁,x₂)=(2x₁ + 4x₂)^1/2.The technical rate of substitution between x₁ and x₂ is constant.

A firm has the production function f(x₁,x₂) =x¹¹x^0.50₂.The isoquant on which output is 30^5/10 has the equation

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

A firm has the production function f(x,y) =x.₅ + y,where x is the amount of factor x it uses and y is the amount of factor y.On a diagram we put x on the horizontal axis and y on the vertical axis.We draw some isoquants.Now we draw a straight line on the graph and we notice that the slopes of all the isoquants that it meets have the same slope at the point where they meet this line.The straight line we drew was

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

A firm has the production function f(x₁,x₂) =x^0.80₁x^0.20₂.The isoquant on which output is 70^2/10 has the equation

On separate axes,draw typical production isoquants for each of the following production functions. a.f(x,y)= min{2x,x + y}. b.f(x,y)= xy. c.f(x,y)= x +min{x,y}. d.(x,y)= x + y^1/2.

It is possible to have decreasing marginal products for all inputs,and yet have increasing returns to scale.

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

If there is one input used in production and if there are decreasing returns to scale,then the marginal product for the input will be diminishing.

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

If a firm moves from one point on a production isoquant to another point on the same isoquant,which of the following will certainly not happen?

If there are constant returns to scale,then doubling the amount of any input will exactly double the amount of output.

The production set of a firm is the set of all products the firm can produce.

A firm has the production function f(X,Y) = X ^1/2 Y ^1/2,where X is the amount of factor x used and Y is the amount of factor y used.On a diagram we put X on the horizontal axis and Y on the vertical axis.We draw some isoquants.Now we draw a straight line on the graph and we notice that wherever this line meets an isoquant,the isoquant has a slope of 23.The straight line we drew