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What is the average total cost of producing 160 units of output?
Correct answer(s):
- 19.38
What is the average variable cost of producing 50 units of output?
Correct answer(s):
- 14
What is the total cost of producing 125 units of output?
Correct answer(s):
- 2400
Suppose you are a manager of a factory. You purchase five (5) new machines at one million dollars each. If you can resell two of the machines for $500,000 and three of the machines for $200,000, what are the sunk costs of purchasing the machines?
Correct answer(s):
- $3.4 million
Costs that are forever lost after they have been paid are:
Correct answer(s):
- Sunk costs
Costs that change as output changes are:
Correct answer(s):
- Variable costs
Fixed costs exist only in:
Correct answer(s):
- The short run
In order to minimize the cost of producing a given level of output, a firm manager should use more inputs when:
Correct answer(s):
- Its price falls
Which of the following sets of economic data is minimizing the cost of producing a given level of output?
Correct answer(s):
- MPL = 20, MPK = 40, w = $16, r = $32
Changes in the price of an input cause:
Correct answer(s):
- Slope changes in the isocost line
In order for isoquants to have a diminishing marginal rate of substitution they must be:
Correct answer(s):
- None of the statements associated with this question are correct
The Leontief production function implies:
Correct answer(s):
- L-shaped isoquants
The production function is Q = K.6 L.4. The marginal rate of technical substitution is:
Correct answer(s):
- 2/3 K L-1
The absolute value of the slope of the isoquant is the:
Correct answer(s):
- Marginal rate of technical substitution
Isoquants are normally drawn with a convex shape because:
Correct answer(s):
- Inputs are not perfectly sustainable
The combinations of inputs that produce a given level of output are depicted by:
Correct answer(s):
- Isoquants
For the production function Q = 5.2K + 3.8L, if K = 16 and L = 12, we know that MPK is:
Correct answer(s):
- 5.2
Given the production function Q = min {4K, 3L}, what is the average product of capital when 8 units of capital and 16 units of labor are used?
Correct answer(s):
- 4
Suppose the production function is given by Q = K1/2L1/2, and that Q = 30 and K = 25. How much labor is employed by the firm?
Correct answer(s):
- 36
Given the Leontief production function Q = min{5.5K, 6.7L}, how much output is produced when K = 40 and L = 35?
Correct answer(s):
- 220