Chapter 5 The Production Process and Costs

question

Suppose the marginal product of labor is 8 and the marginal product of capital is 2. If the wage rate is $4 and the price of capital is $2, then in order to minimize costs the firm should use

answer

more labor and less capital.

question

Suppose the production function is Q = min{K, 2L}. How much output is produced when 4 units of labor and 9 units of capital are employed?

answer

question

Suppose the production function is given by Q = 3K + 4L. What is the average product of capital when 10 units of capital and 10 units of labor are employed?

answer

question

Suppose the production function is given by Q = 3K + 4L. What is the marginal product of capital when 10 units of capital and 10 units of labor are employed?

answer

question

Suppose the production function is given by Q = min{K, L}. How much output is produced when 4 units of labor and 9 units of capital are employed?

answer

question

Suppose the production function is given by Q = 3K + 4L. What is the average product of capital when 5 units of capital and 10 units of labor are employed?

answer

question

For the cost function C(Q) = 100 + 2Q + 3Q2, the average fixed cost of producing 2 units of output is

answer

question

The production function Q = L.5K.5 is called

answer

Cobb Douglas.

question

The production function for a competitive firm is Q = K.5L.5. The firm sells its output at a price of $10 and can hire labor at a wage of $5. Capital is fixed at 25 units. The profit-maximizing quantity of labor is

answer

question

If the production function is Q = K.5L.5 and capital is fixed at 1 unit, then the average product of labor when L = 25 is

answer

1/5

question

For a cost function C = 100 + 10Q + Q2, the marginal cost of producing 10 units of output is

answer

question

Which of the following conditions is true when a producer minimizes the cost of producing a given level of output?

answer

The MRTS is equal to the ratio of input prices, and the marginal product per dollar spent on all inputs is equal.

question

The recipe that defines the maximum amount of output that can be produced with K units of capital and L units of labor is the

answer

production function.

question

Total product begins to fall when

answer

marginal product is zero.

question

The combinations of inputs that produce a given level of output are depicted by

answer

isoquants.

question

The absolute value of the slope of the isoquant is the

answer

marginal rate of technical substitution.

question

Fixed costs exist only in

answer

the short run.

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Costs that change as output changes are

answer

variable costs.

question

Given a cost function C(Q) = 200 + 14Q + 8Q2, what is the marginal cost function?

answer

14 + 16Q

question

What is implied when the total cost of producing Q1 and Q2 together is less than the total cost of producing Q1 and Q2 separately?

answer

economies of scope

question

For the cost function C(Q) = 1000 + 14Q + 9Q2 + 3Q3, what is the marginal cost of producing the fourth unit of output?

answer

$230

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Which of the following cost functions exhibits cost complementarity?

answer

−4Q1Q2 + 8Q1

question

Which of the following is the most common source of technology?

answer

independent R&D

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The long run is defined as

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the horizon in which the manager can adjust all factors of production.

1 of 24

question

Suppose the marginal product of labor is 8 and the marginal product of capital is 2. If the wage rate is $4 and the price of capital is $2, then in order to minimize costs the firm should use

answer

more labor and less capital.

question

Suppose the production function is Q = min{K, 2L}. How much output is produced when 4 units of labor and 9 units of capital are employed?

answer

question

Suppose the production function is given by Q = 3K + 4L. What is the average product of capital when 10 units of capital and 10 units of labor are employed?

answer

question

Suppose the production function is given by Q = 3K + 4L. What is the marginal product of capital when 10 units of capital and 10 units of labor are employed?

answer

question

Suppose the production function is given by Q = min{K, L}. How much output is produced when 4 units of labor and 9 units of capital are employed?

answer

question

Suppose the production function is given by Q = 3K + 4L. What is the average product of capital when 5 units of capital and 10 units of labor are employed?

answer

question

For the cost function C(Q) = 100 + 2Q + 3Q2, the average fixed cost of producing 2 units of output is

answer

question

The production function Q = L.5K.5 is called

answer

Cobb Douglas.

question

answer

question

If the production function is Q = K.5L.5 and capital is fixed at 1 unit, then the average product of labor when L = 25 is

answer

1/5

question

For a cost function C = 100 + 10Q + Q2, the marginal cost of producing 10 units of output is

answer

question

Which of the following conditions is true when a producer minimizes the cost of producing a given level of output?

answer

The MRTS is equal to the ratio of input prices, and the marginal product per dollar spent on all inputs is equal.

question

The recipe that defines the maximum amount of output that can be produced with K units of capital and L units of labor is the

answer

production function.

question

Total product begins to fall when

answer

marginal product is zero.

question

The combinations of inputs that produce a given level of output are depicted by

answer

isoquants.

question

The absolute value of the slope of the isoquant is the

answer

marginal rate of technical substitution.

question

Fixed costs exist only in

answer

the short run.

question

Costs that change as output changes are

answer

variable costs.

question

Given a cost function C(Q) = 200 + 14Q + 8Q2, what is the marginal cost function?

answer

14 + 16Q

question

What is implied when the total cost of producing Q1 and Q2 together is less than the total cost of producing Q1 and Q2 separately?

answer

economies of scope

question

For the cost function C(Q) = 1000 + 14Q + 9Q2 + 3Q3, what is the marginal cost of producing the fourth unit of output?

answer

$230

question

Which of the following cost functions exhibits cost complementarity?

answer

−4Q1Q2 + 8Q1

question

Which of the following is the most common source of technology?

answer

independent R&D

question

The long run is defined as

answer

the horizon in which the manager can adjust all factors of production.

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Chapter 5 The Production Process and Costs

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