The average product of capital of producing 2,991 units of output (find point B) in the above table is

  • 21.9

The production function in the above table exhibits decreasing marginal returns to capital over what output range?

  • Between 2,391 and 3,048

The production function in the above table exhibits negative marginal returns to capital over what output range?

  • 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?

  • 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

  • 26.7

In the short run, the marginal cost curve crosses the average total cost curve at

  • The minimum point of the average total cost curve

Changes in the price of an input cause

  • 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

  • Marginal product curve begins to be negatively sloped

The inputs that a manager uses to alter production are referred to as:

  • Variable factors

Which of the following conditions is true when a producer minimizes the cost of producing a given level of output?

  • 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?

  • Variable costs

If a firm’s production function is Leontief and the price of capital goes down the

  • 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

  • 126

For the cost function C(Q) = 75 + 4Q + 2Q2, the marginal cost of producing 5 units of output is

  • 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?

  • 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?

  • 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?

  • 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

  • More capital and less labor

Two firms producing identical products may merge due to the existence of:

  • Economies of scale

Larger firms can produce a product at lower average cost than small firms when

  • Economies of scope exist

Constant returns to scale exist when long-run average costs

  • Remain constant as output is increased

Suppose the long-run average cost curve is U-shaped. When LRAC is in the increasing stage, there exist

  • Dis economies of scale

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