Suppose the production function is given by Q = 4K + 6L. What is the average product of capital when 10 units of capital and 5 units of labor are employed?
Multiple Choice Quizzes with Answer in English (Page: 397)
Suppose the production function is given by Q = 2K + 5L. What is the marginal product of labor when 15 units of capital and 10 units of labor are employed?
Suppose the production function is Q = min {3K, L}. How much output is produced when 6 units of labor and 3 units of capital are employed?
Suppose the marginal product of labor is 10 and the marginal product of capital is 8. If the wage rate is $5 and the price of capital is $2, then in order to minimize costs the firm should use
Two firms producing identical products may merge due to the existence of:
Larger firms can produce a product at lower average cost than small firms when
Constant returns to scale exist when long-run average costs
Suppose the long-run average cost curve is U-shaped. When LRAC is in the increasing stage, there exist
The long-run average cost curve defines the minimum average cost of producing alternative levels of output, allowing for optimal selection of
Economies of scale exist whenever long-run average costs
When there are economies of scope between products, selling off an unprofitable subsidiary could lead to
When there are economies of scope between two products which are separately produced by two firms, merging into a single firm can
Cost complementary exits in a multi-product cost function when
The difference between average total costs and average variable costs is
When marginal cost curve is below an average cost curve, average cost is
The marginal cost curve
Average fixed cost
Sunk costs are those costs that
If the price of labor increases, in order to minimize the costs of producing a given level of output, the firm manager should use
If the marginal product per dollar spent on capital is less than the marginal product per dollar spent on labor, then in order to minimize costs the firm should use