Management Economics

0 min read

Posted on

March 14th, 2023

question

As usage of a variable input increases, a point is
reached beyond which its marginal product
decreases

answer

Law of diminishing marginal product

question

Maximum amount of output that can be
produced from any specified set of inputs,
given existing technology

answer

Production function

question

Achieved when maximum amount of output is
produced with a given combination of inputs

answer

Technical efficiency

question

An input employed in a fixed amount for any positive
level of output that need not be paid if output is zero

answer

Quasi-fixed input

question

Achieved when firm is producing a given
output at the lowest possible total cost

answer

Economic efficiency

question

An input for which the level of usage may be changed
quite readily

answer

Variable input

question

An input for which the level of usage cannot readily be
changed and which must be paid even if no output is
produced

answer

Fixed input

question

are considered variable or fixed
depending on how readily their usage can be
changed

answer

Inputs

question

*At least one input is fixed
*All changes in output achieved by
changing usage of variable inputs

answer

Short run

question

*All inputs are variable
*Output changed by varying usage of all
inputs

answer

Long run

question

Short run production function

answer

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

question

Only changes in the variable labor
input can change the level of output

answer

In the short run, capital is fixed

question

When AP is rising, MP is greater than AP

answer

TRUE

question

When AP is falling, MP is less than AP

answer

TRUE

question

When AP reaches it maximum, AP = MP

answer

TRUE

question

Marginal product of labor

answer

MP = ΔQ/ΔL

question

Average product of labor

answer

AP = Q/L

1 of 17

question

As usage of a variable input increases, a point is
reached beyond which its marginal product
decreases

answer

Law of diminishing marginal product

question

Maximum amount of output that can be
produced from any specified set of inputs,
given existing technology

answer

Production function

question

Achieved when maximum amount of output is
produced with a given combination of inputs

answer

Technical efficiency

question

An input employed in a fixed amount for any positive
level of output that need not be paid if output is zero

answer

Quasi-fixed input

question

Achieved when firm is producing a given
output at the lowest possible total cost

answer

Economic efficiency

question

An input for which the level of usage may be changed
quite readily

answer

Variable input

question

An input for which the level of usage cannot readily be
changed and which must be paid even if no output is
produced

answer

Fixed input

question

are considered variable or fixed
depending on how readily their usage can be
changed

answer

Inputs

question

*At least one input is fixed
*All changes in output achieved by
changing usage of variable inputs

answer

Short run

question

*All inputs are variable
*Output changed by varying usage of all
inputs

answer

Long run

question

Short run production function

answer

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

question

Only changes in the variable labor
input can change the level of output

answer

In the short run, capital is fixed

question

When AP is rising, MP is greater than AP

answer

TRUE

question

When AP is falling, MP is less than AP

answer

TRUE

question

When AP reaches it maximum, AP = MP

answer

TRUE

question

Marginal product of labor

answer

MP = ΔQ/ΔL

question

Average product of labor

answer

AP = Q/L

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