Question 1

The costs that influence decisions to supply are always:

Accepted Answer

A)  average costs.
B)  avoidable costs.
C)  sunk costs.
D)  costs not yet incurred.E) B) and C)
F) A) and B)

Question 2

The cost to a cab driver of taking the day off increases when:

Accepted Answer

A)  it rains.
B)  the price of gasoline rises.
C)  it is sunny.
D)  more cabs enter the business.E) C) and D)
F) B) and D) A

Question 3

Figure 6A

-At point B in Figure 6A, the MP and AP are equal to each other because:

Accepted Answer

A)  the total product function has reached its maximum.
B)  the variable resource is most productive.
C)  the slopes of a ray from the origin and of the TP are equal.
D)  the fixed resources are no longer productive.E) B) and C)
F) A) and B)

Question 4

The marginal product of labour is:

Accepted Answer

A)  the amount of capital that would have the same cost as an additional worker.
B)  the additional output from an additional worker.
C)  the amount of capital that one worker could replace keeping output constant.
D)  the additional cost of an additional worker.E) A) and C)
F) All of the above B

Question 5

Widgets are produced according to the production function: F(K,L) = 2K+L. If K = 10 how much L is needed to produce 100 widgets?

Accepted Answer

A)  70
B)  60
C)  80
D)  40E) None of the above
F) A) and B)

Question 6

If STC = 7q3 + 3q + 7, then AVC is:

Accepted Answer

A)  7q2 + 3 + 7/q.
B)  7q2 + 3q + 7/q.
C)  7q2 + 3.
D)  7q2 + 3q.E) A) and C)
F) None of the above

Question 7

The free- disposal assumption implies that:

Accepted Answer

A)  the MP of an input cannot be negative.
B)  garbage disposal is costless.
C)  excess use on an input reduces output unless more of others are used.
D)  total product always increases as quantity of a variable input.E) A) and D)
F) A) and C)

Question 8

A firm should allocate its output between the two plants such that the average cost in the two plants is the same.

Accepted Answer

A) True 
 B)False

Question 9

The total product function of a variable input depends on:

Accepted Answer

A)  fixed quantities of all other inputs.
B)  careful monitoring of finished goods.
C)  the market price of the resource.
D)  technology available at the time.E) A) and B)
F) C) and D)

Question 10

Which of the following would be considered a sunk cost to a pharmaceutical company?

Accepted Answer

A)  clinical trials
B)  the lighting costs of the pill making factory
C)  pill making machines
D)  the ingredients to make pillsE) B) and C)
F) None of the above

Question 11

If STC = 3q2 + 7q + 15 , then:

Accepted Answer

A)  AFC = 15.
B)  SMC = 6q.
C)  VC = 3q2 + 7q.
D)  ATC = 3q + 7.E) B) and D)
F) All of the above C

Question 12

When a firm produces its product using the quantity of the variable resource which maximizes its average product:

Accepted Answer

A)  marginal cost is minimized.
B)  average cost equals marginal cost.
C)  marginal product is also maximized.
D)  average cost is maximized.E) B) and D)
F) All of the above

Question 13

The diminishing marginal product of labour refers to:

Accepted Answer

A)  that as more and more workers are hired holding the level of capital fixed, the additional output will decrease.
B)  a decline in our educational system.
C)  workers getting lazy with age.
D)  that as more and more workers are hired holding the level of capital fixed, the total output will decrease.E) A) and B)
F) C) and D)

Question 14

If a firm uses a fixed- proportions production technology to produce its final output:

Accepted Answer

A)  the AP of the variable factor is constant.
B)  the cost curves are obtained in a similar fashion with the non- fixed- proportion technologies.
C)  it will always employ the same amount of the variable factor.
D)  the law of diminishing marginal productivity does not apply.E) A) and B)
F) A) and C)

Question 15

Suppose that the production function for a truck driver is M = 34.641M0·5G0·5 where M is miles traveled, G is gallons of gasoline, and S is speed in kilometers per hour. Which of the following is the name of this type of production function?

Accepted Answer

A)  Leontief
B)  Fixed proportions
C)  Polynomial
D)  Cobb- DouglasE) A) and B)
F) B) and D)

Question 16

Sam produces widgets according to the production function F(L)= 100L(1/2).
i)What is Sam's average productivity of labour?
ii)What is Sam's marginal productivity of labour?
iii)Graph APL and MPL on a diagram. Show that MPL is lower than APL for all values of L.

Accepted Answer

i)APL = 100L⁽^-^1/2)
ii)MPL = 50L⁽^-^1/2)
iii)...

Question 17

Herongate Horses produces saddles (y)using two inputs, leather (z1)and labour (z2). Herongate Horses' production function is given by: F(z1,z2)= (1/4)z1z2 . Suppose that z2 is fixed at 2.
i)Find Herongate Horses' total product function, TP(z1)when w1 = 5 and w2 = 20.
ii)Find Herongate Horses' variable cost function, VC(y). Find and graph the average variable cost function,
AVC(y).

Accepted Answer

i)TP(z₁)= z...

Question 18

The higher the level of FC:

Accepted Answer

A)  the lower the level of output which minimizes SMC.
B)  the lower the profit, ceteris paribus.
C)  the higher the level of output at which AFC reaches a minimum.
D)  the more likely a firm will substitute variables for fixed factors.E) A) and D)
F) None of the above

Question 19

The variable cost function shows the expenditure on the variable output:

Accepted Answer

A)  needed for technically efficient production, given an input price.
B)  as the price of the variable input changes.
C)  as the level of the variable input employed changes.
D)  which gives the least- cost combination of inputs for an output level.E) B) and C)
F) A) and D)

Question 20

A firm should allocate its workforce between the two plants such that the average product of workers in the two plants is the same.

Accepted Answer

A) True 
 B)False

Exam 6: Production Cost: One Variable Input

The costs that influence decisions to supply are always:

Correct Answer
verified

The cost to a cab driver of taking the day off increases when:

Correct Answer
verified
A

Figure 6A -At point B in Figure 6A, the MP and AP are equal to each other because:

Correct Answer
verified

The marginal product of labour is:

Correct Answer
verified
B

Widgets are produced according to the production function: F(K,L) = 2K+L. If K = 10 how much L is needed to produce 100 widgets?

Correct Answer
verified

If STC = 7q³+ 3q + 7, then AVC is:

Correct Answer
verified

The free- disposal assumption implies that:

Correct Answer
verified

A firm should allocate its output between the two plants such that the average cost in the two plants is the same.

Correct Answer
verified

The total product function of a variable input depends on:

Correct Answer
verified

Which of the following would be considered a sunk cost to a pharmaceutical company?

Correct Answer
verified

If STC = 3q²+ 7q + 15 , then:

Correct Answer
verified
C

When a firm produces its product using the quantity of the variable resource which maximizes its average product:

Correct Answer
verified

The diminishing marginal product of labour refers to:

Correct Answer
verified

If a firm uses a fixed- proportions production technology to produce its final output:

Correct Answer
verified

Suppose that the production function for a truck driver is M = 34.641M⁰·⁵G⁰·⁵where M is miles traveled, G is gallons of gasoline, and S is speed in kilometers per hour. Which of the following is the name of this type of production function?

Correct Answer
verified

Sam produces widgets according to the production function F(L)= 100L^(1/2). i)What is Sam's average productivity of labour? ii)What is Sam's marginal productivity of labour? iii)Graph APL and MPL on a diagram. Show that MPL is lower than APL for all values of L.

Correct Answer
verified
i)APL = 100L⁽^-^1/2)
ii)MPL = 50L⁽^-^1/2)
iii)...
View Answer

Correct Answer
verified
i)TP(z₁)= z...
View Answer

The higher the level of FC:

Correct Answer
verified

The variable cost function shows the expenditure on the variable output:

Correct Answer
verified

A firm should allocate its workforce between the two plants such that the average product of workers in the two plants is the same.

Correct Answer
verified

Exam 6: Production Cost: One Variable Input

The costs that influence decisions to supply are always:

Correct AnswerverifiedShow Answer

The cost to a cab driver of taking the day off increases when:

Correct AnswerverifiedA

Figure 6A -At point B in Figure 6A, the MP and AP are equal to each other because:

Correct AnswerverifiedShow Answer

The marginal product of labour is:

Correct AnswerverifiedB

Widgets are produced according to the production function: F(K,L) = 2K+L. If K = 10 how much L is needed to produce 100 widgets?

Correct AnswerverifiedShow Answer

If STC = 7q3 + 3q + 7, then AVC is:

Correct AnswerverifiedShow Answer

The free- disposal assumption implies that:

Correct AnswerverifiedShow Answer

A firm should allocate its output between the two plants such that the average cost in the two plants is the same.

Correct AnswerverifiedShow Answer

The total product function of a variable input depends on:

Correct AnswerverifiedShow Answer

Which of the following would be considered a sunk cost to a pharmaceutical company?

Correct AnswerverifiedShow Answer

If STC = 3q2 + 7q + 15 , then:

Correct AnswerverifiedC

When a firm produces its product using the quantity of the variable resource which maximizes its average product:

Correct AnswerverifiedShow Answer

The diminishing marginal product of labour refers to:

Correct AnswerverifiedShow Answer

If a firm uses a fixed- proportions production technology to produce its final output:

Correct AnswerverifiedShow Answer

Suppose that the production function for a truck driver is M = 34.641M0·5G0·5 where M is miles traveled, G is gallons of gasoline, and S is speed in kilometers per hour. Which of the following is the name of this type of production function?

Correct AnswerverifiedShow Answer

Sam produces widgets according to the production function F(L)= 100L(1/2). i)What is Sam's average productivity of labour? ii)What is Sam's marginal productivity of labour? iii)Graph APL and MPL on a diagram. Show that MPL is lower than APL for all values of L.

Correct Answerverifiedi)APL = 100L(- 1/2)ii)MPL = 50L(- 1/2)iii)...View AnswerShow Answer

Correct Answerverifiedi)TP(z1)= z...View AnswerShow Answer

The higher the level of FC:

Correct AnswerverifiedShow Answer

The variable cost function shows the expenditure on the variable output:

Correct AnswerverifiedShow Answer

A firm should allocate its workforce between the two plants such that the average product of workers in the two plants is the same.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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A

Correct Answer
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Correct Answer
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B

Correct Answer
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If STC = 7q³+ 3q + 7, then AVC is:

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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If STC = 3q²+ 7q + 15 , then:

Correct Answer
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C

Correct Answer
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Correct Answer
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Correct Answer
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Suppose that the production function for a truck driver is M = 34.641M⁰·⁵G⁰·⁵where M is miles traveled, G is gallons of gasoline, and S is speed in kilometers per hour. Which of the following is the name of this type of production function?

Correct Answer
verified

Sam produces widgets according to the production function F(L)= 100L^(1/2). i)What is Sam's average productivity of labour? ii)What is Sam's marginal productivity of labour? iii)Graph APL and MPL on a diagram. Show that MPL is lower than APL for all values of L.

Correct Answer
verified
i)APL = 100L⁽^-^1/2)
ii)MPL = 50L⁽^-^1/2)
iii)...
View Answer

Correct Answer
verified
i)TP(z₁)= z...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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