Question 1

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 2

As we move downward along a typical isoquant, the slope of the isoquant:

Accepted Answer

A)   becomes flatter.
B)   becomes steeper.
C)   remains constant.
D)   becomes linear.

Question 3

Figure 6.3.1
-Refer to Figure 6.3.1 above. The ability to produce output in this isoquant map shows:

Accepted Answer

A)   increasing marginal returns.
B)   diminishing marginal returns.
C)   constant returns to both labor and capital.
D)   negative returns to both labor and capital.

Question 4

Figure 6.2.2
-Joe owns a coffee house and produces coffee drinks under the production function q = 5KL where q is the number of cups generated per hour, K is the number of coffee machines (capital) , and L is the number of employees hired per hour (labor) . The average product of labor and the marginal product of labor are both equal to AP = MP = 5K. Does labor exhibit diminishing marginal returns in this case?

Accepted Answer

A)   Yes, if capital also exhibits diminishing marginal returns.
B)   Yes, this is true for all values of K.
C)   No, the marginal product of labor is constant (for a given K) .
D)   No, the marginal product of labor is increasing (for a given K) .

Question 5

The slope of the total product curve is the:

Accepted Answer

A)   average product.
B)   slope of a line from the origin to the point.
C)   marginal product.
D)   marginal rate of technical substitution.

Question 6

Complete the following table:

Accepted Answer

The answer of Complete the following table: ...

Question 7

Many mining and mineral extraction processes tend to exhibit increasing returns to scale. Suppose copper mines have increasing returns, and the existing copper mines reduce their capital and labor inputs by 25 percent in response to a global recession. What is the expected impact on copper output?

Accepted Answer

A)   Output increases by less than 25 percent.
B)   Output decreases by less than 25 percent.
C)   Output decreases by exactly 25 percent.
D)   Output decreases by more than 25 percent.

Question 8

Which of the following equations based on capital (K)  and labor (L)  inputs does not represent a plausible production function?

Accepted Answer

A)   F(K,L)  = 3KL
B)   F(K,L)  = 3K
C)   F(K,L)  = K + L - 1
D)   F(K,L)  = 10(KL) 0.5

Question 9

Sarah's Pretzel Plant produces pretzels according to the function  K is the number of ovens, and L is the number of labor hours Sarah uses to produce her pretzels. At the moment, Sarah uses 9 ovens. Also, she plans to hire 64 labor hours. Sarah can sell each unit of pretzels produced for $3.50. Fill in the table below. If Sarah increased her use of labor hours to 65, would the value of the marginal product of labor exceed the wage rate of $8.50?

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> If Sarah uses 65 hours of labor, the va...

Question 10

Figure 6.2.2
-Joe owns a coffee house and produces coffee drinks under the production function q = 5KL where q is the number of cups generated per hour, K is the number of coffee machines (capital) , and L is the number of employees hired per hour (labor) . What is the marginal product of labor?

Accepted Answer

A)   MP = 5
B)   MP = 5K
C)   MP = 5L
D)   MP = 5K/L

Question 11

The law of diminishing returns applies to:

Accepted Answer

A)   the short run only.
B)   the long run only.
C)   both the short and the long run.
D)   neither the short nor the long run.
E)   all inputs, with no reference to the time period.

Question 12

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.

Question 13

Which of the following ideas were central to the conclusions drawn by Thomas Malthus in his 1798 "Essay on the Principle of Population"?

Accepted Answer

A)   Short-run time period
B)   Shortage of labor
C)   Law of diminishing resource availability
D)   Law of diminishing returns

Question 14

The function which shows combinations of inputs that yield the same output is called a(n) :

Accepted Answer

A)   isoquant curve.
B)   isocost curve.
C)   production function.
D)   production possibilities frontier.

Question 15

Figure 6.2.2
-Refer to Figure 6.2.2 above. This figure shows the impact of technological improvements and conveys the idea that:

Accepted Answer

A)   productivity increases with technology, but just as labor is subject to diminishing returns, so is technology.
B)   technology causes an increase in the output per time period, but as the production functions show, the contributions of technology are also subject to diminishing marginal returns.
C)   even though any given production process exhibits diminishing returns, labor productivity increases with technological improvements.
D)   without an increase in the productivity of labor, the contributions of technology are insufficient to avoid diminishing returns as the production function shifts upward.

Question 16

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 17

Which of the following production functions exhibits constant returns to scale?

Accepted Answer

A)   q = KL
B)   q = KL0.5
C)   q = K + L
D)   q = log(KL)

Question 18

If the isoquants are straight lines, then:

Accepted Answer

A)   inputs have fixed costs at all use rates.
B)   the marginal rate of technical substitution of inputs is constant.
C)   only one combination of inputs is possible.
D)   there are constant returns to scale.

Question 19

Use the following statements to answer this question. I. The numerical labels attached to indifference curves are meaningful only in an ordinal way.
II)  The numerical labels attached to isoquants are meaningful only in an ordinal way.

Accepted Answer

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

Question 20

The Malthusian dilemma relates to marginal product in that:

Accepted Answer

A)   starvation can be averted only if marginal product is constant.
B)   because of diminishing marginal product, the amount of food produced by each additional member of the population increases.
C)   because of diminishing marginal product, the amount of food produced by each additional member of the population decreases.
D)   because of diminishing marginal product, the wage falls as the population decreases.
E)   because of diminishing average product, the population will not have additional capital to work with.

Exam 6: Production

Correct Answer
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The marginal product of an input is:

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The slope of the total product curve is the:

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If the isoquants are straight lines, then:

Correct Answer
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The function which shows combinations of inputs that yield the same output is called a(n) :

Correct Answer
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Complete the following table:

Correct Answer
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The law of diminishing returns applies to:

Correct Answer
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Figure 6.3.1 -Refer to Figure 6.3.1 above. The ability to produce output in this isoquant map shows:

Correct Answer
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The Malthusian dilemma relates to marginal product in that:

Correct Answer
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Figure 6.2.2 -Refer to Figure 6.2.2 above. This figure shows the impact of technological improvements and conveys the idea that:

Correct Answer
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As we move downward along a typical isoquant, the slope of the isoquant:

Correct Answer
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Correct Answer
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If Sarah uses 65 hours of labor, the va...
View Answer

Many mining and mineral extraction processes tend to exhibit increasing returns to scale. Suppose copper mines have increasing returns, and the existing copper mines reduce their capital and labor inputs by 25 percent in response to a global recession. What is the expected impact on copper output?

Correct Answer
verified

Correct Answer
verified

Which of the following ideas were central to the conclusions drawn by Thomas Malthus in his 1798 "Essay on the Principle of Population"?

Correct Answer
verified

When the average product is decreasing, marginal product:

Correct Answer
verified

Use the following statements to answer this question. I. The numerical labels attached to indifference curves are meaningful only in an ordinal way. II) The numerical labels attached to isoquants are meaningful only in an ordinal way.

Correct Answer
verified

Figure 6.2.2 -Joe owns a coffee house and produces coffee drinks under the production function q = 5KL where q is the number of cups generated per hour, K is the number of coffee machines (capital) , and L is the number of employees hired per hour (labor) . What is the marginal product of labor?

Correct Answer
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Which of the following production functions exhibits constant returns to scale?

Correct Answer
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Which of the following equations based on capital (K) and labor (L) inputs does not represent a plausible production function?

Correct Answer
verified

Exam 6: Production

Correct AnswerverifiedShow Answer

The marginal product of an input is:

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The slope of the total product curve is the:

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If the isoquants are straight lines, then:

Correct AnswerverifiedShow Answer

The function which shows combinations of inputs that yield the same output is called a(n) :

Correct AnswerverifiedShow Answer

Complete the following table:

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The law of diminishing returns applies to:

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Figure 6.3.1 -Refer to Figure 6.3.1 above. The ability to produce output in this isoquant map shows:

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The Malthusian dilemma relates to marginal product in that:

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Figure 6.2.2 -Refer to Figure 6.2.2 above. This figure shows the impact of technological improvements and conveys the idea that:

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As we move downward along a typical isoquant, the slope of the isoquant:

Correct AnswerverifiedShow Answer

Correct Answerverified If Sarah uses 65 hours of labor, the va...View AnswerShow Answer

Many mining and mineral extraction processes tend to exhibit increasing returns to scale. Suppose copper mines have increasing returns, and the existing copper mines reduce their capital and labor inputs by 25 percent in response to a global recession. What is the expected impact on copper output?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following ideas were central to the conclusions drawn by Thomas Malthus in his 1798 "Essay on the Principle of Population"?

Correct AnswerverifiedShow Answer

When the average product is decreasing, marginal product:

Correct AnswerverifiedShow Answer

Use the following statements to answer this question. I. The numerical labels attached to indifference curves are meaningful only in an ordinal way. II) The numerical labels attached to isoquants are meaningful only in an ordinal way.

Correct AnswerverifiedShow Answer

Figure 6.2.2 -Joe owns a coffee house and produces coffee drinks under the production function q = 5KL where q is the number of cups generated per hour, K is the number of coffee machines (capital) , and L is the number of employees hired per hour (labor) . What is the marginal product of labor?

Correct AnswerverifiedShow Answer

Which of the following production functions exhibits constant returns to scale?

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Which of the following equations based on capital (K) and labor (L) inputs does not represent a plausible production function?

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If Sarah uses 65 hours of labor, the va...
View Answer

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