EXAM 2 AGEC 3423 questions well
answered already passed
Two inputs that have a constant substitution ratio usually contribute nearly the same resources
to a production process. - correct answer ✔✔ True
Supplementary enterprises will generally be supplementary over a limited range and then
become competitive. - correct answer ✔✔ True
At the level of input and output where marginal revenue is equal to marginal cost, profit will
always be positive. - correct answer ✔✔ False
When average physical product (grain yield per acre, for example) begins to decrease, you
should stop adding more fertilizer. - correct answer ✔✔ False
The most important factor in deciding when to replace machinery should be the amount of
income tax that can be saved in the year of purchase. - correct answer ✔✔ False
Variable costs such as seed and fertilizer that have already been paid for and applied are called
"sunk costs." - correct answer ✔✔ True
Both fixed and variable costs exist in the long, long run. - correct answer ✔✔ False
Two or more operators can reduce machinery costs by owning some or all of their machinery
jointly, but scheduling the use of the machinery may be a problem. - correct answer ✔✔ True
Diseconomies of size result in lower average total costs. - correct answer ✔✔ False
, Only actual field time should be considered when labor costs for machinery are calculated. -
correct answer ✔✔ False
To maximize total profit, farms or ranches should produce the level of output at which average
total cost per unit is minimized. - correct answer ✔✔ False
Doubling both input and output price will change the profit maximizing input and output level. -
correct answer ✔✔ False
Price changes cause changes in the input substitution ratio. - correct answer ✔✔ False
Labor can be either a cash expense or an opportunity cost. - correct answer ✔✔ True
A production process requires at least one fixed input for the law of diminishing returns to be in
effect. - correct answer ✔✔ True
It is possible for the opportunity cost of an input to be very low or zero if there is no alternative
use for it. - correct answer ✔✔ True
Marginal Physical Product (MPP) can never be negative. - correct answer ✔✔ False
Machinery ownership costs are often called fixed costs because they do not change when the
annual use of the machine changes. - correct answer ✔✔ True
The majority of agricultural enterprises will exhibit a competitive enterprise relationship. -
correct answer ✔✔ True
answered already passed
Two inputs that have a constant substitution ratio usually contribute nearly the same resources
to a production process. - correct answer ✔✔ True
Supplementary enterprises will generally be supplementary over a limited range and then
become competitive. - correct answer ✔✔ True
At the level of input and output where marginal revenue is equal to marginal cost, profit will
always be positive. - correct answer ✔✔ False
When average physical product (grain yield per acre, for example) begins to decrease, you
should stop adding more fertilizer. - correct answer ✔✔ False
The most important factor in deciding when to replace machinery should be the amount of
income tax that can be saved in the year of purchase. - correct answer ✔✔ False
Variable costs such as seed and fertilizer that have already been paid for and applied are called
"sunk costs." - correct answer ✔✔ True
Both fixed and variable costs exist in the long, long run. - correct answer ✔✔ False
Two or more operators can reduce machinery costs by owning some or all of their machinery
jointly, but scheduling the use of the machinery may be a problem. - correct answer ✔✔ True
Diseconomies of size result in lower average total costs. - correct answer ✔✔ False
, Only actual field time should be considered when labor costs for machinery are calculated. -
correct answer ✔✔ False
To maximize total profit, farms or ranches should produce the level of output at which average
total cost per unit is minimized. - correct answer ✔✔ False
Doubling both input and output price will change the profit maximizing input and output level. -
correct answer ✔✔ False
Price changes cause changes in the input substitution ratio. - correct answer ✔✔ False
Labor can be either a cash expense or an opportunity cost. - correct answer ✔✔ True
A production process requires at least one fixed input for the law of diminishing returns to be in
effect. - correct answer ✔✔ True
It is possible for the opportunity cost of an input to be very low or zero if there is no alternative
use for it. - correct answer ✔✔ True
Marginal Physical Product (MPP) can never be negative. - correct answer ✔✔ False
Machinery ownership costs are often called fixed costs because they do not change when the
annual use of the machine changes. - correct answer ✔✔ True
The majority of agricultural enterprises will exhibit a competitive enterprise relationship. -
correct answer ✔✔ True
