Multiple Choice: This Activity Contains 20 Questions

Multiple Choice
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Multiple Choice
Multiple Choice
This activity contains 20 questions.
The production decisions of a firm focus on

input choices. production technology. cost constraints. All of the above.
A production function shows

various levels of output associated with specific plant sizes. how to double output by changing the amount of inputs. the highest output that a firm can produce for every specified combination of inputs. combinations of inputs that can be used to produce a given amount of output.
In the theory of the firm, how long does the short run last?
Five years. One month. One year. None of the above.
Suppose that the short-run production function at Skip's Pottery can be represented as Q = 100L L2 where Q is clay pots produced per week and L is the number of hours Skip works per week. If Skip works 40 hours per week, what is his marginal product of labor?
20 40 60 80
Suppose that the short-run production function at Skip's Pottery can be represented as Q = 100L L2 where Q is clay pots produced per week and L is the number of hours Skip works per week. If Skip works 40 hours per week, what is his average product of labor?
20 80 60 40
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If the marginal product of labor is below the average product of labor, it must be true that
the average product of labor is falling. the marginal product of labor is negative. the average product of labor is negative. the marginal product of labor is zero.
The average product of labor is maximized when the marginal product of labor
equals zero. is maximized. equals the average product of labor. None of the above.
As one moves along a convex isoquant, which of the following does not change?
The marginal rate of technical substitution. The level output produced. The capital-labor ratio. The marginal product of labor relative to the marginal product of capital.
A technological improvement
has no impact on the production function. shifts the short-run production function upward. results in a move from one point to another along a short-run production function. changes the shape of the short-run production function.
For the production function, Q = L1/3 K1/3, what shape will the isoquants have?
L shaped. negatively sloped and concave. negatively sloped and convex. negatively sloped straight lines.
The production function, Q = L1/3 K1/3 , exhibits
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Multiple Choice
constant returns to scale at all levels of production. increasing returns to scale at all levels of production. increasing returns to scale initially, then decreasing returns to scale. decreasing returns to scale at all levels of production.
Labor is measured on the horizontal axis, and capital is measured on the vertical axis. If an isoquant is relatively flat at a certain combination of capital and labor, we know that
there are constant returns to scale. the amount of labor hired is high relative to the amount of capital hired. the marginal product of labor is less than the marginal product of capital. capital and labor must be combined in fixed proportions.
If the isoquants for two different types of inputs are negatively sloped straight lines, then
the two inputs are perfect substitutes for one another. the two inputs are perfect complements for one another. the marginal rate of technical substitution is zero. the marginal productivity of one of the inputs is negative.
If decreasing returns to scale are present, then if all inputs are increased by 10%,
output will increase by more than 10%. output will increase by 10%. output will increase by less than 10%. output will decrease by 10%.
With input combinations (L = 25, K =6), Alma harvested 200 bushels of wheat. After one of the machines broke, she hired more labor. As a result, with input combinations (L = 30, K = 5), she still harvested 200 bushels. One can conclude from these results that
this production function exhibits constant returns to scale. the marginal product of labor is less than the marginal product of capital. the isoquants for this production function are convex. All of the above.
The manager at Skip's Pottery knows the marginal product of labor equals 6 and the marginal product of capital equals 30. Skip will be purchasing one more unit of capital. If the firm wishes to keep the level of output unchanged, then the manager must
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Multiple Choice
decrease labor hired by 1/5 unit. increase labor hired by 5 units. decrease labor hired by 5 units. increase labor hired by 1/5 unit.
A production function can be written as Q = F(L,K). After various combinations of inputs were used, the following results were obtained: 1000 = F(120,6) 2000 = F(200,10) 3000 = F(300,15) 4000 = F(400,20) 5000 = F(500, 25) 6000 = F(700,35). Over which range of output are there constant returns to scale?
The entire range. 1000 to 3000 units of output only. 4000 to 6000 units of output only. 2000 to 5000 units of output only.
A production function can be written as Q = F(L,K). After various combinations of inputs were used, the following results were obtained: 1000 = F(120,6) 2000 = F(200,10) 3000 = F(300,15) 4000 = F(400,20) 5000 = F(500, 25) 6000 = F(700,35). Increasing returns to scale are present over which range of output?
The entire range. More than 5000 units of output only. Up to 3000 units of output only. Up to 2000 units of output only.
The local factory noticed that each of the following combinations of capital and labor produced the same level of output: (L=1, K=20) (L=2, K=15) (L=3, K=11) (L=4, K=8) (L=5, K=6) (L =6, K=5). In going from 5 units of labor to 6 units of labor along the isoquant, this evidence suggests that
the marginal product of labor equals the marginal product of capital. the isoquant is horizontal. ALL of the above. the marginal product of labor equals 1.
The local factory noticed that each of the following combinations of capital and labor produced the same level of output: (L=1, K=20) (L=2, K=15) (L=3, K=11) (L=4, K=8) (L=5, K=6) (L =6, K=5). This evidence suggests that
capital and labor are perfect substitutes. there are decreasing returns to scale. capital and labor are perfect complements. the isoquant is convex.
Answer choices in this exercise appear in a different order each time the page is loaded.
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Multiple Choice
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Multiple Choice

The production decisions of a firm focus on

A production function shows

The production function, Q = L1/3 K1/3 , exhibits

Legal Notice | Privacy Policy | Permissions

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