The average product of capital of producing 2,991 units of output (find point B) in the above table is
Correct answer(s):
- 21.9
Topic
The Production Process and Costs
Practice related MCQ quizzes and improve step by step.
Quizzes in The Production Process and Costs
The production function in the above table exhibits decreasing marginal returns to capital over what output range?
Correct answer(s):
- Between 2,391 and 3,048
The production function in the above table exhibits negative marginal returns to capital over what output range?
Correct answer(s):
- Between 3,016 and 2,945
The production function for good X in the above table exhibits increasing marginal returns to capital over what output range?
Correct answer(s):
- Between 0 and 1,524
The marginal product of capital of producing 2,991 units of output (find point A) in the above table is
Correct answer(s):
- 26.7
In the short run, the marginal cost curve crosses the average total cost curve at
Correct answer(s):
- The minimum point of the average total cost curve
Changes in the price of an input cause
Correct answer(s):
- Slope changes in the isocost line
The point where diminishing marginal returns has begun to affect production, is best characterized by the point where the
Correct answer(s):
- Marginal product curve begins to be negatively sloped
The inputs that a manager uses to alter production are referred to as:
Correct answer(s):
- Variable factors
Which of the following conditions is true when a producer minimizes the cost of producing a given level of output?
Correct answer(s):
- The marginal product per dollar spent on all inputs is equal
Which of the following “costs” could a firm that wants to remain in business avoid if it halted current production?
Correct answer(s):
- Variable costs
If a firm’s production function is Leontief and the price of capital goes down the
Correct answer(s):
- Cost minimizing combination of capital and labor does not change
For the cost function C(Q) = 50 + 4Q + 2Q2, the total variable cost of producing 7 units of output is
Correct answer(s):
- 126
For the cost function C(Q) = 75 + 4Q + 2Q2, the marginal cost of producing 5 units of output is
Correct answer(s):
- 24
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?
Correct answer(s):
- 7
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?
Correct answer(s):
- 5
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?
Correct answer(s):
- 6
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
Correct answer(s):
- More capital and less labor
Two firms producing identical products may merge due to the existence of:
Correct answer(s):
- Economies of scale
Larger firms can produce a product at lower average cost than small firms when
Correct answer(s):
- Economies of scope exist