Microeconomics Study Set 46

Business

Quiz 6 :

Producer Behavior

Quiz 6 :

Producer Behavior

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(Figure: Capital and Labor XVI) Consider the production function Q = L0.5K0.5, with MPK = L0.5/K0.5 and MPL = K0.5/L0.5. img The slope of the isoquant at Point A is ____.
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A

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Which of the following statements is (are) TRUE? I. If labor and capital are perfect substitutes in production, the isoquant is a downward-sloping line. II. If a company needs to use inputs in fixed proportion such that the capital to labor ratio is always 2, the firm's isoquants are L-shaped. III. If the production function is given by Q = min(14, 7), the firm can produce, at minimum, 21 units of output.
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D

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(Table: Capital and Labor XIV) Consider the production function that this table shows. img Suppose the firm is using 3 units of capital and 2 units of labor and then decides to employ a third worker. The marginal product of the third worker is ____.
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B

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(Figure: Capital and Labor VI) Suppose a firm spends $4,000 per day producing a good. The wage rate per worker is $200 per day and rental rate per unit of capital is $500 per day. The firm's isocost line at the current expenditure level is represented by: img
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For the production function Q(K,L) = 3K + 2L, the marginal rate of technical substitution MRTSLK is:
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(Table: Short-run Production I) The short-run production situation for a firm is listed on this table. img The marginal product of labor with one unit of labor is ____.
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(Table: Capital and Labor XIV) Consider the production function that this table shows. img Suppose the firm is using 2 units of capital and 1 unit of labor. The marginal product of capital for K = 3 is ____.
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(Figure: Production Function I) Which of the following statements is (are) TRUE? img I. At L = 5, MPTL > APL. II) At L = 2, MPL = APL. III) For this production function, MPL is greater at L = 2 than at L = 8. IV) For this production function, MPL is always greater than APL.
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(Table: Capital and Labor XIV) Consider the production function that this table shows. img Suppose the firm is using 3 units of capital and 1 unit of labor. The marginal product of capital for K = 4 is ____.
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(Figure: Capital and Labor XII) Which of the following statements is (are) TRUE? img img I. Panel a illustrates constant returns to scale. II. Panel b illustrates decreasing returns to scale. III. Panel a illustrates increasing returns to scale IV. Panel b illustrates constant returns to scale.
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Capital cannot be adjusted in the short run because:
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(Table: Capital and Labor XIV) Consider the production function that this table shows. img With 4 units of labor and 2 units of capital, the level of output is ____.
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(Table: Capital and Labor II) Which of the following statements is (are) TRUE? img I. A combination of 4 units of capital and 2 units of labor produces the same amount of output as a combination of 3 units of capital and 3 units of labor. II) If labor is fixed at 3 units, adding more capital increases output at an increasing rate. III) If capital is fixed at 2 units, adding more labor results in diminishing returns. IV) A combination of 3 units of capital and 4 units of labor produces 171.4 units of output.
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(Table: Short-run Production I) The short-run production situation for a firm is listed on this table. img The total output with two units of labor is ____.
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Suppose that a community health center finds that, regardless of the number of physicians or nurse practitioners employed, it can always replace one family practice physician by using two additional nurse practitioners without affecting the quantity or quality of patient office visits. This finding implies that:
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Suppose the production function for a car manufacturer is: Q = 2K2L2 Where Q is the number of cars produced, K is the number of machine hours used, and L is the number of worker hours used. The function for the marginal product of labor is ____.
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Suppose the production function for a coffee shop is: Q = 2K + 5L Where Q is the number of cups of coffee produced, K is the number of coffee makers, and L is the number of workers. The function for the marginal product of labor is ____.
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Suppose the production function for a bakery is: Q = 4K0.4L0.6 Where Q is the number of loaves of bread produced per day, K is the number of ovens, and L is the number of workers employed. The function for the marginal rate of technical substitution is ____.
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Suppose the production function for a car manufacturer is: Q = 2K2L2 Where Q is the number of cars produced, K is the number of machine hours used, and L is the number of worker hours used. The function for the marginal rate of technical substitution is ____.
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Suppose a firm is producing 2,475 units of output by hiring 50 workers (W = $20 per hour) and 25 units of capital (R = $10 per hour). The marginal product of labor and marginal product of capital are 40 and 25, respectively. Is the firm minimizing the cost of producing 2,475 units of output?
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