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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
Given the linear production function Q = 10K + 5L, if Q = 10,000 and K = 500, how much labor is utilized?
Correct answer(s):
- 1,000 units
Firm managers should use inputs at levels where the:
Correct answer(s):
- Marginal benefit equals marginal cost and value marginal product of labor equals wage
It is profitable to hire units of labor as long as the value of marginal product
Correct answer(s):
- Exceeds wage
What is the value marginal product of labor if: P = $10, MPL = $25, and APL = 40?
Correct answer(s):
- $250
Total product begins to fall when:
Correct answer(s):
- Marginal product is zero
If the last unit of input increases total product we know that the marginal product is:
Correct answer(s):
- Positive
The change in total output attributable to the last unit of an input is the:
Correct answer(s):
- Marginal product
What is the average product of labor, given that the level of labor equals 10, total output equals 1200 and the marginal product of labor equals 200?
Correct answer(s):
- 120
Inputs a manager may adjust in order to alter production are:
Correct answer(s):
- Variable factors
Which of the following is not a means of acquiring product and process innovations?
Correct answer(s):
- Mass production of the existing product