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The isoquants are normally drawn with a convex shape because inputs are
Correct answer(s):
- Not perfectly substitutable
An isoquant defines the combination of inputs that yield the producer
Correct answer(s):
- The same level of output
The average product of labor depends on how many units of
Correct answer(s):
- Labor and capital are used
The Cobb-Douglas production function is
Correct answer(s):
- Q = KaLb
With a linear production function there is a
Correct answer(s):
- Perfect substitutable relationship between all inputs
The Leontief production function
Correct answer(s):
- Implies inputs are used in fixed proportions
The demand for an input is
Correct answer(s):
- The VMP of the input
The demand for labor by a profit-maximizing firm is determined by
Correct answer(s):
- VMPL = W
It is profitable to hire labor so long as the
Correct answer(s):
- VMPL is greater than wage
The value of marginal product of an input is the value of the
Correct answer(s):
- Output produced by the last unit of an input
The manager institutes an incentive structure to ensure
Correct answer(s):
- The firm produces on the production function
If a firm is operating on the production function, then workers
Correct answer(s):
- Must be putting forth maximal effort
As the usage of an input increases, marginal product
Correct answer(s):
- Initially increases then begins to decline
As long as marginal product is increasing, marginal product is
Correct answer(s):
- Greater than average product
The marginal product of an input is defined as the change in
Correct answer(s):
- Total output attributable to the last unit of an input
Which of the following is not a measure of productivity?
Correct answer(s):
- Average advertising
The long-run is defined as
Correct answer(s):
- The horizon in which the manager can adjust all factors of production
The short-run is defined as the time-frame
Correct answer(s):
- In which there are fixed factors of production
Variable factors of production are the inputs that a manager
Correct answer(s):
- May adjust in order to alter production
Which of the following is the most common source of technology?
Correct answer(s):
- independent R&D