AgEc Exam 2 - Custom Scholars
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# AgEc Exam 2

question
Which of the following is true about the short run?
All inputs are fixed
question
An isoquant is defined by
Combinations of inputs required to produce a constant quantity of output.
question
The slope of an isoquant is
The Marginal Rate of Technical Substitution
(MRTS)
question
If two inputs are perfect substitutes, the MRTS is:
A constant
question
he slope of an isoquant is:
Equal to the ratio of marginal products
question
An isocost line is defined by:
Combinations of inputs required to incur constant cost.
question
The total costs:
Increase when output increases
question
A cost function is a function of:
Output and Input prices
question
To minimize costs, the marginal product per dollar for each input must be:
equal.
question
MRTS is the
Slope of an isoquant curve
question
MRTS =
Change in K/Change in L
question
If two inputs are perfect substitutes, their MRTS is
Constant
question
The law of diminishing marginal returns states that
As additional units of inputs are used, total physical product (TPP) will eventually decline
question
MPP > APP
Stage 1
- APP still increasing
- A rational producer would NOT continue
question
0 < MPP < APP
Stage 2
-Best stage
- A rational consumer WOULD continue to operate at this stage
question
MPP < 0
Stage 3
-TPP is decreasing
-A rational producer would NOT continue to operate this stage
question
TPP
TPP = Y (Output)
TPP = APP * X
question
APP
APP = TPP/X
question
MPP
MPP = Change in TPP/Change in X
(TPP2 - TPP1) / (X2 - X1)
question
Isocost Line Equation
TC = (Wage x Labor) + (Rent x K)
question
Graph an Isocost
a Latin phrase that means "all other things held constant"
question
ceteris paribus
Step 1: % change Q / % Change P
Step 2: Change in quantity demanded/average quantity
Step 3: Percentage change in price = Change in price/average price
Step 4: Elasticity
question
Own Price-Elasticity
As more of a variable resource is added to a given amount of a fixed resource, marginal product eventually declines and could become negative
question
Law of Diminishing Marginal Returns
Quantity is constant in short run regardless of output level
-Land, machinery, livestock, buildings
question
Fixed Input
Vary in quantity even in short run depending on output
-Fuel, energy, feed, employees
question
Variable Input
All inputs are variable
question
Which of the following is true about the long run?
Corn syrup vs Sugar
question
Substitutes in the production of a good
Constant
question
f two inputs are perfect substitutes, their MRTS is:
-Parallel Lines
-MRTS = 1
question
Perfect Substitutes Isocost
All points on the isoquant line have the save level of output
question
Isoquant Line
-No increase on amount produced unless both inputs increase
- Tractor and plow; you can't have a tractor without the plow
question
Perfect Compliments
Y(output) = f (function of) (L, K, A)
question
Production Function
undefined
1 of 33
question
Which of the following is true about the short run?
All inputs are fixed
question
An isoquant is defined by
Combinations of inputs required to produce a constant quantity of output.
question
The slope of an isoquant is
The Marginal Rate of Technical Substitution
(MRTS)
question
If two inputs are perfect substitutes, the MRTS is:
A constant
question
he slope of an isoquant is:
Equal to the ratio of marginal products
question
An isocost line is defined by:
Combinations of inputs required to incur constant cost.
question
The total costs:
Increase when output increases
question
A cost function is a function of:
Output and Input prices
question
To minimize costs, the marginal product per dollar for each input must be:
equal.
question
MRTS is the
Slope of an isoquant curve
question
MRTS =
Change in K/Change in L
question
If two inputs are perfect substitutes, their MRTS is
Constant
question
The law of diminishing marginal returns states that
As additional units of inputs are used, total physical product (TPP) will eventually decline
question
MPP > APP
Stage 1
- APP still increasing
- A rational producer would NOT continue
question
0 < MPP < APP
Stage 2
-Best stage
- A rational consumer WOULD continue to operate at this stage
question
MPP < 0
Stage 3
-TPP is decreasing
-A rational producer would NOT continue to operate this stage
question
TPP
TPP = Y (Output)
TPP = APP * X
question
APP
APP = TPP/X
question
MPP
MPP = Change in TPP/Change in X
(TPP2 - TPP1) / (X2 - X1)
question
Isocost Line Equation
TC = (Wage x Labor) + (Rent x K)
question
Graph an Isocost
a Latin phrase that means "all other things held constant"
question
ceteris paribus
Step 1: % change Q / % Change P
Step 2: Change in quantity demanded/average quantity
Step 3: Percentage change in price = Change in price/average price
Step 4: Elasticity
question
Own Price-Elasticity
As more of a variable resource is added to a given amount of a fixed resource, marginal product eventually declines and could become negative
question
Law of Diminishing Marginal Returns
Quantity is constant in short run regardless of output level
-Land, machinery, livestock, buildings
question
Fixed Input
Vary in quantity even in short run depending on output
-Fuel, energy, feed, employees
question
Variable Input
All inputs are variable
question
Which of the following is true about the long run?
Corn syrup vs Sugar
question
Substitutes in the production of a good
Constant
question
f two inputs are perfect substitutes, their MRTS is:
-Parallel Lines
-MRTS = 1
question
Perfect Substitutes Isocost
All points on the isoquant line have the save level of output
question
Isoquant Line
-No increase on amount produced unless both inputs increase
- Tractor and plow; you can't have a tractor without the plow
question
Perfect Compliments
Y(output) = f (function of) (L, K, A)
question
Production Function
undefined

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