Intermediate Microeconomics Module 5

question

Technology

answer

Is a process by which inputs are converted to an output

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Input Bundle

answer

A vector of the input levels

(x1, x2, ... , xn). X(I) denotes the amount used of input i

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The technology's production function

answer

States the maximum amount of output possible from an input bundle

Y = f(x(1), x(2),....., x(n)

Y denotes the output level

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Production Plan

answer

Is an input bundle and an output level

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The y output unit isoquant is......

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Is the set of all input bundles that yield at most the same output level y

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Cobb-Douglass Production Function

answer

Y = Ax(1)^a x(2)^b

Q=f(k,L)
Quantity is a function of (capital, labor) (output)
The maximum amount of output that can be produced with K units of capital and L units of labor

question

Fixed-Proportions Production Function

answer

Y = min(a(1)x(1), a(2)x(2))

Production function with L-shaped isoquants, so that only one combination of labor and capital can be used to produce each level of output.

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The Marginal Product of Labor (i)

answer

Is the rate or change of the output level as the level of input i changes, holding all other input levels of fixed

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The Marginal Product of input i is diminishing if it.....

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Becomes smaller as the level of input i increases

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If, for any input bundle the value is greater than 1..........

answer

Then the technology described by the production function f exhibits increasing returns to scale

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If, for any input bundle the value is less than 1..........

answer

Then the technology described by the production function f exhibits diminishing returns to scale

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If, for any input bundle the value is equal to 1..........

answer

Then the technology described by the production function f exhibits constant returns to scale

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The perfect substitutes production function is.........

answer

y = a1x1 + a2x2

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Both the perfect substitutes and the fixed proportion production functions exhibit........

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Constant returns to scale

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Perfect Substitutes

answer

Y = x1 + x2

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Technical Rate of Substitution

answer

the rate at which a firm will have to substitute one input for another in order to keep output constant

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Returns to scale

answer

rate at which output increases as inputs are increased proportionately

1 of 17

question

Technology

answer

Is a process by which inputs are converted to an output

question

Input Bundle

answer

A vector of the input levels

(x1, x2, ... , xn). X(I) denotes the amount used of input i

question

The technology's production function

answer

States the maximum amount of output possible from an input bundle

Y = f(x(1), x(2),....., x(n)

Y denotes the output level

question

Production Plan

answer

Is an input bundle and an output level

question

The y output unit isoquant is......

answer

Is the set of all input bundles that yield at most the same output level y

question

Cobb-Douglass Production Function

answer

Y = Ax(1)^a x(2)^b

Q=f(k,L)
Quantity is a function of (capital, labor) (output)
The maximum amount of output that can be produced with K units of capital and L units of labor

question

Fixed-Proportions Production Function

answer

Y = min(a(1)x(1), a(2)x(2))

Production function with L-shaped isoquants, so that only one combination of labor and capital can be used to produce each level of output.

question

The Marginal Product of Labor (i)

answer

Is the rate or change of the output level as the level of input i changes, holding all other input levels of fixed

question

The Marginal Product of input i is diminishing if it.....

answer

Becomes smaller as the level of input i increases

question

If, for any input bundle the value is greater than 1..........

answer

Then the technology described by the production function f exhibits increasing returns to scale

question

If, for any input bundle the value is less than 1..........

answer

Then the technology described by the production function f exhibits diminishing returns to scale

question

If, for any input bundle the value is equal to 1..........

answer

Then the technology described by the production function f exhibits constant returns to scale

question

The perfect substitutes production function is.........

answer

y = a1x1 + a2x2

question

Both the perfect substitutes and the fixed proportion production functions exhibit........

answer

Constant returns to scale

question

Perfect Substitutes

answer

Y = x1 + x2

question

Technical Rate of Substitution

answer

the rate at which a firm will have to substitute one input for another in order to keep output constant

question

Returns to scale

answer

rate at which output increases as inputs are increased proportionately

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Intermediate Microeconomics Module 5

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