ALA #5 - Assignment Essays

question

A production function can include many inputs. Which of the following are the most commonly used inputs?

answer

Capital and Labor

question

The ________ run is a period of time during which at least one factor of production is fixed.

answer

short

question

If, in the short run, capital is fixed and equal to K = 2A, what is the short-run production function?

answer

Q = f(L) = F(K*, L)

question

If 15 workers produce 180 cars per day, what is the average product of labor (APL)?

answer

APL = Q/L
=180/15
=12

question

In a production function, the input that refers to machinery is called

answer

capital

question

Which of the following describes the maximum output that can be produced with a fixed set of inputs?

answer

- Q = F{K,L}, where K is capital and L is labor
- Total product
-Production function

question

Marginal Product of Capital (MPk) is given by:

answer

MPk = ΔQ/ΔK

question

The ________ run is a period of time during which a manager can change all factors of production.

answer

long

question

The short-run production function is generally expressed as a function of which of the following inputs?

answer

labor only

question

Jack operates a small, farm-to-table, organic rice packaging plant. Jack hired another employee and saw output fall from 300 to 297 boxes of rice per day. What is this an example of?

answer

Negative marginal returns

question

What is a scheme used by managers to ensure maximum worker effort?

answer

incentive structures

question

Assume that each unit of labor costs $500. If a worker's marginal product of labor (MPL) equals 115 and the firm sells its product for $6.00, the value of the additional output exceeds the cost of hiring the worker by $___

answer

190

question

If the cost of each additional unit of labor is w, a firm will employ additional workers until _____________________ in the range of diminishing marginal product

answer

VMPL= w

question

The MPL of the 5th worker is 9 units, the MPL of the 6th worker is 7 units and the MPL of the 7th worker is 4 units. This is an example of which of the following?

answer

decreasing marginal returns

question

In the production process, the manager must do which of the following?

answer

-Establish the correct level of inputs
-Ensure the firm operates on the production function

question

The value of the output produced by the last unit of a particular input is called

answer

value marginal product.

question

The downward-sloping portion of the VMPL defines the demand for __________ by a profit maximizing firm. It slopes downward due to ___________.

answer

labor; diminishing marginal returns

question

In a linear production function, inputs are

answer

perfect substitutes.

question

When each additional unit of an input increases total output by more than did the previous unit, the firm is experiencing

answer

increasing marginal returns.

question

What is another name for the Leontief production function?

answer

Fixed proportions production function

question

Which of the following is a Cobb-Douglas production function?

answer

: Q = F(K,L) = K^α*L^β
: Q = F(K,L) = K^0.25*L^0.75

question

What is the marginal product of capital (MPK) for the following linear production function?

Q = F(K,L) = αK + βL

answer

question

What is the marginal product of capital (MPK) for the following Cobb-Douglas production function?
Q = F(K, L) = K^αL^β

answer

αK^(α-1)*L^β

question

Suppose the linear production function for a firm is given by:Q = F(K,L,) = 3K + 2L.If the firm employs 3 machines and 5 workers, output is equal to

answer

question

A firm that always employs two workers for each unit of capital follows which type of production function?

answer

Leontief

question

A production function that assumes that inputs are relatively substitutable is called a ______.

answer

Cobb-Douglas production function

question

What is the marginal product of labor (MPL) for the following linear production function?

Q = F(K,L) = αK + βL

answer

question

What is the analytical tool that defines a combination of inputs that yields the same output?

answer

Isoquant

question

What is the marginal product of labor (MPL) for the following Cobb-Douglas production function?
Q = F(K, L) = K^α*L^β

answer

βK^α*L^(β-1)

question

Suppose the linear production function of a firm is given by Q = F(K, L) = aK + bL, where a and b are constants. Suppose it takes workers (L) 4 hours to produce what a machine (K) can make in 1 hour. Which of the following equations correctly states the production function of the firm?
Multiple choice question.

answer

Q = 4K +L

question

What is the term given to the ratio of the marginal products of labor and capital?

answer

Marginal rate of technical substitution

question

The Leontief production function implies that isoquants are what shape?

answer

L-shaped

question

What must be true about combinations of labor and capital along a given isoquant?

answer

They all must produce the same amount of output

question

Using calculus, what is the marginal product of an input in the following production function?
Q = F(K, L) = K^α*L^β

answer

The partial derivative with respect to the input

question

Which of the following production functions imply isoquants that have a diminishing marginal rate of technical substitution?

answer

Cobb-Douglas

question

Which of the following represents an isocost line?

answer

C = wL + rK

question

Which of the following describes the rate at which labor and capital can be substituted for each other?

answer

Marginal rate of technical substitution

question

For a linear production function, Q = αK + βL, what is the marginal rate of technical substitution (MRTS)?

answer

β/α

question

According to the law of diminishing marginal rate of technical substitution, as a producer uses __________ of an input, ___________ of the other input must be used to achieve the same level of output.

answer

less; more

question

A line that represents the combinations of inputs that will cost the producer the same amount of money is called a(n)_____.

answer

isocost line

question

The marginal rate of technical substitution between labor and capital is

answer

-the rate at which labor and capital can be substituted for each other.
-the absolute value of the slope of the isoquant.
: MPL/MPK

question

When the price of labor rises, firms have a tendency to use

answer

less labor and more capital.

question

The minimum possible cost of producing each output level with fixed and variable factors is given by

answer

the short-run cost function.

question

Suppose capital, K, is on the vertical axis and labor, L, is on the horizontal axis in a graph. Which of the following would be true if the price of labor, w, increased?

answer

The isocost line rotates clockwise

question

Fixed cost (FC) equals

answer

TC-VC

question

The expression, VC(Q)/Q, defines

answer

average variable cost

question

Suppose a firm produces 1000 units of a good. If fixed costs (FC) equal $2500 and variable costs (VC) equal $3700 at that output level, average total cost (ATC) of each unit is equal to $

answer

6.20

question

Where does the marginal cost (MC) curve intersect the average variable cost (AVC) curve?

answer

At minimum AVC.

question

The expression, FC/Q, defines

answer

average fixed cost

question

Suppose that increasing output from 1000 units to 1100 units increases costs from $5,500 to $7,000. The marginal cost of producing each of the additional units is $

answer

MC= dTC/dQ
=(7000-5500)/(1100-1000)
= 15

question

Which of the following types of functions is C(Q) = f + aQ + bQ^2 + cQ^3?

answer

Cubic cost function

question

With respect to the short-run average cost curves, what is true of the long-run average cost curve?

answer

-It lies above no point of the short-run average cost curves.
-It equals short-run average cost when short-run curves use fixed inputs optimally.

question

When average total cost (ATC) is at its minimum, marginal cost (MC) __________ average total cost (ATC).

answer

equals

question

What happens to average fixed cost (AFC) as output declines?

answer

AFC increases

question

Suppose a firm expands its output and experiences higher long-run average cost. What is this condition called?

answer

Diseconomies of scale

question

In the long run, all costs are _______?

answer

variable

question

As output increases, what happens to the difference between ATC and AVC?

answer

decreases

question

When a firm experiences economies of scale, increasing the size of the operation _________ the minimum average cost.

answer

decreases

question

The multiproduct cost function assumes that all inputs are utilized ________ (efficiently/effectively).

answer

efficiently

question

When C(Q1,0) + C(Q2, 0) > C(Q1, Q2), we say that ______ ____ ________ exist

answer

economies of scope

question

What exists when an increase in the output of one product reduces the marginal cost of a second product?

answer

Cost complementarity

question

Which function defines the cost of producing at least two types of output?

answer

Multiproduct cost function

question

The following Quadratic Multiproduct Cost Function:
C(Q1, Q2) = f + aQ1Q2 + (Q1)^2 + (Q2)^2

exhibits Economies of Scope when

answer

f - aQ1Q2 >0

question

Suppose it is cheaper for an auto maker to produce hybrid vehicles and diesel SUVs in the same factory than it is to have two separate facilities for each vehicle. What condition exists?

answer

economies of scope

1 of 64

question

A production function can include many inputs. Which of the following are the most commonly used inputs?

answer

Capital and Labor

question

The ________ run is a period of time during which at least one factor of production is fixed.

answer

short

question

If, in the short run, capital is fixed and equal to K = 2A, what is the short-run production function?

answer

Q = f(L) = F(K*, L)

question

If 15 workers produce 180 cars per day, what is the average product of labor (APL)?

answer

APL = Q/L
=180/15
=12

question

In a production function, the input that refers to machinery is called

answer

capital

question

Which of the following describes the maximum output that can be produced with a fixed set of inputs?

answer

- Q = F{K,L}, where K is capital and L is labor
- Total product
-Production function

question

Marginal Product of Capital (MPk) is given by:

answer

MPk = ΔQ/ΔK

question

The ________ run is a period of time during which a manager can change all factors of production.

answer

long

question

The short-run production function is generally expressed as a function of which of the following inputs?

answer

labor only

question

Jack operates a small, farm-to-table, organic rice packaging plant. Jack hired another employee and saw output fall from 300 to 297 boxes of rice per day. What is this an example of?

answer

Negative marginal returns

question

What is a scheme used by managers to ensure maximum worker effort?

answer

incentive structures

question

answer

190

question

If the cost of each additional unit of labor is w, a firm will employ additional workers until _____________________ in the range of diminishing marginal product

answer

VMPL= w

question

The MPL of the 5th worker is 9 units, the MPL of the 6th worker is 7 units and the MPL of the 7th worker is 4 units. This is an example of which of the following?

answer

decreasing marginal returns

question

In the production process, the manager must do which of the following?

answer

-Establish the correct level of inputs
-Ensure the firm operates on the production function

question

The value of the output produced by the last unit of a particular input is called

answer

value marginal product.

question

The downward-sloping portion of the VMPL defines the demand for __________ by a profit maximizing firm. It slopes downward due to ___________.

answer

labor; diminishing marginal returns

question

In a linear production function, inputs are

answer

perfect substitutes.

question

When each additional unit of an input increases total output by more than did the previous unit, the firm is experiencing

answer

increasing marginal returns.

question

What is another name for the Leontief production function?

answer

Fixed proportions production function

question

Which of the following is a Cobb-Douglas production function?

answer

: Q = F(K,L) = K^α*L^β
: Q = F(K,L) = K^0.25*L^0.75

question

What is the marginal product of capital (MPK) for the following linear production function?

Q = F(K,L) = αK + βL

answer

question

What is the marginal product of capital (MPK) for the following Cobb-Douglas production function?
Q = F(K, L) = K^αL^β

answer

αK^(α-1)*L^β

question

Suppose the linear production function for a firm is given by:Q = F(K,L,) = 3K + 2L.If the firm employs 3 machines and 5 workers, output is equal to

answer

question

A firm that always employs two workers for each unit of capital follows which type of production function?

answer

Leontief

question

A production function that assumes that inputs are relatively substitutable is called a ______.

answer

Cobb-Douglas production function

question

What is the marginal product of labor (MPL) for the following linear production function?

Q = F(K,L) = αK + βL

answer

question

What is the analytical tool that defines a combination of inputs that yields the same output?

answer

Isoquant

question

What is the marginal product of labor (MPL) for the following Cobb-Douglas production function?
Q = F(K, L) = K^α*L^β

answer

βK^α*L^(β-1)

question

answer

Q = 4K +L

question

What is the term given to the ratio of the marginal products of labor and capital?

answer

Marginal rate of technical substitution

question

The Leontief production function implies that isoquants are what shape?

answer

L-shaped

question

What must be true about combinations of labor and capital along a given isoquant?

answer

They all must produce the same amount of output

question

Using calculus, what is the marginal product of an input in the following production function?
Q = F(K, L) = K^α*L^β

answer

The partial derivative with respect to the input

question

Which of the following production functions imply isoquants that have a diminishing marginal rate of technical substitution?

answer

Cobb-Douglas

question

Which of the following represents an isocost line?

answer

C = wL + rK

question

Which of the following describes the rate at which labor and capital can be substituted for each other?

answer

Marginal rate of technical substitution

question

For a linear production function, Q = αK + βL, what is the marginal rate of technical substitution (MRTS)?

answer

β/α

question

answer

less; more

question

A line that represents the combinations of inputs that will cost the producer the same amount of money is called a(n)_____.

answer

isocost line

question

The marginal rate of technical substitution between labor and capital is

answer

-the rate at which labor and capital can be substituted for each other.
-the absolute value of the slope of the isoquant.
: MPL/MPK

question

When the price of labor rises, firms have a tendency to use

answer

less labor and more capital.

question

The minimum possible cost of producing each output level with fixed and variable factors is given by

answer

the short-run cost function.

question

Suppose capital, K, is on the vertical axis and labor, L, is on the horizontal axis in a graph. Which of the following would be true if the price of labor, w, increased?

answer

The isocost line rotates clockwise

question

Fixed cost (FC) equals

answer

TC-VC

question

The expression, VC(Q)/Q, defines

answer

average variable cost

question

Suppose a firm produces 1000 units of a good. If fixed costs (FC) equal $2500 and variable costs (VC) equal $3700 at that output level, average total cost (ATC) of each unit is equal to $

answer

6.20

question

Where does the marginal cost (MC) curve intersect the average variable cost (AVC) curve?

answer

At minimum AVC.

question

The expression, FC/Q, defines

answer

average fixed cost

question

Suppose that increasing output from 1000 units to 1100 units increases costs from $5,500 to $7,000. The marginal cost of producing each of the additional units is $

answer

MC= dTC/dQ
=(7000-5500)/(1100-1000)
= 15

question

Which of the following types of functions is C(Q) = f + aQ + bQ^2 + cQ^3?

answer

Cubic cost function

question

With respect to the short-run average cost curves, what is true of the long-run average cost curve?

answer

-It lies above no point of the short-run average cost curves.
-It equals short-run average cost when short-run curves use fixed inputs optimally.

question

When average total cost (ATC) is at its minimum, marginal cost (MC) __________ average total cost (ATC).

answer

equals

question

What happens to average fixed cost (AFC) as output declines?

answer

AFC increases

question

Suppose a firm expands its output and experiences higher long-run average cost. What is this condition called?

answer

Diseconomies of scale

question

In the long run, all costs are _______?

answer

variable

question

As output increases, what happens to the difference between ATC and AVC?

answer

decreases

question

When a firm experiences economies of scale, increasing the size of the operation _________ the minimum average cost.

answer

decreases

question

The multiproduct cost function assumes that all inputs are utilized ________ (efficiently/effectively).

answer

efficiently

question

When C(Q1,0) + C(Q2, 0) > C(Q1, Q2), we say that ______ ____ ________ exist

answer

economies of scope

question

What exists when an increase in the output of one product reduces the marginal cost of a second product?

answer

Cost complementarity

question

Which function defines the cost of producing at least two types of output?

answer

Multiproduct cost function

question

The following Quadratic Multiproduct Cost Function:
C(Q1, Q2) = f + aQ1Q2 + (Q1)^2 + (Q2)^2

exhibits Economies of Scope when

answer

f - aQ1Q2 >0

question

Suppose it is cheaper for an auto maker to produce hybrid vehicles and diesel SUVs in the same factory than it is to have two separate facilities for each vehicle. What condition exists?

answer

economies of scope

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