Chapter 5 The Production Process and Costs - Custom Scholars
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# 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
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?
8
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?
7
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?
3
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?
4
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?
11
question
For the cost function C(Q) = 100 + 2Q + 3Q2, the average fixed cost of producing 2 units of output is
50
question
The production function Q = L.5K.5 is called
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
25
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
1/5
question
For a cost function C = 100 + 10Q + Q2, the marginal cost of producing 10 units of output is
30
question
Which of the following conditions is true when a producer minimizes the cost of producing a given level of output?
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
production function.
question
Total product begins to fall when
marginal product is zero.
question
The combinations of inputs that produce a given level of output are depicted by
isoquants.
question
The absolute value of the slope of the isoquant is the
marginal rate of technical substitution.
question
Fixed costs exist only in
the short run.
question
Costs that change as output changes are
variable costs.
question
Given a cost function C(Q) = 200 + 14Q + 8Q2, what is the marginal cost function?
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?
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?
\$230
question
Which of the following cost functions exhibits cost complementarity?
−4Q1Q2 + 8Q1
question
Which of the following is the most common source of technology?
independent R&D
question
The long run is defined as
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
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?
8
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?
7
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?
3
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?
4
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?
11
question
For the cost function C(Q) = 100 + 2Q + 3Q2, the average fixed cost of producing 2 units of output is
50
question
The production function Q = L.5K.5 is called
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
25
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
1/5
question
For a cost function C = 100 + 10Q + Q2, the marginal cost of producing 10 units of output is
30
question
Which of the following conditions is true when a producer minimizes the cost of producing a given level of output?
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
production function.
question
Total product begins to fall when
marginal product is zero.
question
The combinations of inputs that produce a given level of output are depicted by
isoquants.
question
The absolute value of the slope of the isoquant is the
marginal rate of technical substitution.
question
Fixed costs exist only in
the short run.
question
Costs that change as output changes are
variable costs.
question
Given a cost function C(Q) = 200 + 14Q + 8Q2, what is the marginal cost function?
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?
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?
\$230
question
Which of the following cost functions exhibits cost complementarity?
−4Q1Q2 + 8Q1
question
Which of the following is the most common source of technology?
independent R&D
question
The long run is defined as
the horizon in which the manager can adjust all factors of production.

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