Suppose the production function for a certain device is q = L + K. If neutral technical change has occurred, which of the following could be the new production function? A) q = L + 5K B) q = 5 (L + K) C) q = 5L + K D) All of the above […]
Date: September 9th, 2020
If a farmer produces 1000 bushels of corn using ten acres of land and one tractor and is able to produce 2000 bushels of corn using twenty acres of land and one tractor, the farmer has A) increasing returns to scale. B) constant returns to scale. C) decreasing returns to scale. D) no returns to […]
Date: September 9th, 2020
How much do outputs increase when labor and capital increase from 1 to 2 units for the following production function , q = 10L0.5K0.3? A) 7.4 units B) 7 units C) 8 units D) None of the above. ANSWER A
Date: September 9th, 2020
Let the production function be q = ALaKb. The function exhibits constant returns to scale if A) a + b = 1. B) a + b > 1. C) a + b < 1. D) Cannot be determined with the information given. ANSWER A
Date: September 9th, 2020
What is one reason “micro-managers” might be less successful than so-called “delegators”? A) Delegators are smarter. B) Delegators enjoy increasing returns to scale. C) Micro-managers suffer decreasing returns to scale. D) Micro-managers have constant returns to scale. ANSWER C
Date: September 9th, 2020
How much capital does a firm require to produce q = 3200 when labor is 4 and they have a production function equal to q = 200L0.5K0.5? A) K = 64 B) K = 8 C) K = 16 D) K = 25 ANSWER A
Date: September 9th, 2020
What is the MRTS for a firm with the following production function , q = 200L0.5K0.5 with L = 4 and K = 16? A) MRTS = -4 B) MRTS = -2 C) MRTS = -1 D) MRTS = -8 ANSWER A
Date: September 9th, 2020
If inputs into production cannot be substituted for each other but have to be employed in fixed proportions isoquants are straight, downward-sloping lines. Indicate whether the statement is true or false ANSWER False. Isoquants are straight lines when inputs are perfect substitutes. When input relations are fixed they are right angles.
Date: September 9th, 2020
Let the production function be q = ALaKb. The function exhibits increasing returns to scale if A) a + b = 1. B) a + b > 1. C) a + b < 1. D) Cannot be determined with the information given. ANSWER B
Date: September 9th, 2020
Let the production function be q = ALaKb. The function exhibits decreasing returns to scale if A) a + b = 1. B) a + b > 1. C) a + b < 1. D) Cannot be determined with the information given. ANSWER C
Date: September 9th, 2020
