A firm operating with diminishing total returns cannot be profit maximizing. Indicate whether the statement is true or false ANSWER True . This firm could produce more output with fewer inputs. This cannot be profit maximizing.
Date: September 9th, 2020
Suppose the production of paved roadways can be represented as q = L0.5 + K0.5. Which of the following statements is (are) TRUE? A) Labor is subject to diminishing marginal productivity in the short run. B) Labor and capital are imperfect substitutes. C) The isoquants for paved roadways are convex. D) All of the above. […]
Date: September 9th, 2020
A typical professional National Football League team has three quarterbacks on its roster. What is one reason why they might not have a fourth quarterback? A) The fourth quarterback’s marginal product is approximately zero. B) The fourth quarterback’s marginal product is approximately ten. C) The fourth quarterback’s marginal product is less than the first quarterback’s […]
Date: September 9th, 2020
In the long run, all factors of production are A) variable. B) fixed. C) materials. D) rented. ANSWER A
Date: September 9th, 2020
A production function tells the firm A) the maximum it can expect to produce with a given mix of inputs. B) the average it can expect to produce with a given mix of inputs. C) the minimum it can expect to produce with a given mix of inputs. D) the average level of production for […]
Date: September 9th, 2020
If the marginal productivity of labor is constant for all levels of output, then the average productivity of labor A) is constant. B) equals the marginal productivity of labor. C) Both A and B above. D) Either A or B above but not both. ANSWER C
Date: September 9th, 2020
Which of the following is least likely to be considered a capital input? A) a sewing machine B) a tractor C) a telephone D) a ten dollar bill ANSWER D
Date: September 9th, 2020
Production functions only apply to advanced economies. Indicate whether the statement is true or false ANSWER False. Production functions describe the relationship between inputs and outputs, and apply to all kinds of economies.
Date: September 9th, 2020
If the average productivity of labor equals the marginal productivity of labor, then A) the average productivity of labor is at a maximum. B) the marginal productivity of labor is at a maximum. C) Both A and B above. D) Neither A nor B above. ANSWER A
Date: September 9th, 2020
Which of the following inputs is easier to increase in the short run? A) number of airplanes B) size of the airport terminal C) ticket-counter sales people D) number of luggage carousels ANSWER C
Date: September 9th, 2020
