ECO10A ECONOMICS ACTUAL
EXAM 2026 Questions and Answers
Factors of Production - Correct answer-inputs to production; include land, labor,
capital, and raw materials
Capital Goods - Correct answer-inputs to production that are themselves produced
goods; includes physical and human capital
Technological Constraints - Correct answer-only certain combinations of inputs are
feasible ways to produce a given amount of output
Production Set - Correct answer-the set of all combinations of inputs and outputs
that comprise a technologically feasible way to produce
Production Function - Correct answer-the maximum possible output for a given
level of input; the boundary of the production set; Y = f(x1, x2)
Isoquant - Correct answer-the graph of all possible combinations of x1 and x2 that
are just sufficient to produce a given amount of output
Isoquant Graphs: - Correct answer-- Fixed Proportions (L-shaped)
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, - Perfect Substitutes (negative-slope lines)
- Cobb-Douglas (convex diminishing)
Monotonic Inputs - Correct answer-if you increase the amount of at least one of the
inputs, it should be possible to produce at least as much output as you were
producing originally
Convex Inputs - Correct answer-if you have two ways to produce y units of output,
(x1, x2) and (z1, z2), then their weighted average will produce at least y units of
output
Production Techniques - Correct answer-different ways to produce the same output
Marginal Product - Correct answer-the extra amount of output per unit of extra
input; MP1(x1, x2) = ∂y/∂x1
Technical Rate of Substitution (TRS) - Correct answer-the slope of the isoquant;
the extra amount of x2 needed to give up some amount of x1; TRS = MP1(x1, x2) /
MP2 (x1, x2)
Law of Diminishing MP - Correct answer-the marginal product of a factor will
diminish as we get more of that factor; applies only when all other inputs are fixed
Diminishing TRS - Correct answer-as factor x1 increases and factor x2 decreases,
TRS decreases; implies isoquant has convex shape
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
EXAM 2026 Questions and Answers
Factors of Production - Correct answer-inputs to production; include land, labor,
capital, and raw materials
Capital Goods - Correct answer-inputs to production that are themselves produced
goods; includes physical and human capital
Technological Constraints - Correct answer-only certain combinations of inputs are
feasible ways to produce a given amount of output
Production Set - Correct answer-the set of all combinations of inputs and outputs
that comprise a technologically feasible way to produce
Production Function - Correct answer-the maximum possible output for a given
level of input; the boundary of the production set; Y = f(x1, x2)
Isoquant - Correct answer-the graph of all possible combinations of x1 and x2 that
are just sufficient to produce a given amount of output
Isoquant Graphs: - Correct answer-- Fixed Proportions (L-shaped)
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
, - Perfect Substitutes (negative-slope lines)
- Cobb-Douglas (convex diminishing)
Monotonic Inputs - Correct answer-if you increase the amount of at least one of the
inputs, it should be possible to produce at least as much output as you were
producing originally
Convex Inputs - Correct answer-if you have two ways to produce y units of output,
(x1, x2) and (z1, z2), then their weighted average will produce at least y units of
output
Production Techniques - Correct answer-different ways to produce the same output
Marginal Product - Correct answer-the extra amount of output per unit of extra
input; MP1(x1, x2) = ∂y/∂x1
Technical Rate of Substitution (TRS) - Correct answer-the slope of the isoquant;
the extra amount of x2 needed to give up some amount of x1; TRS = MP1(x1, x2) /
MP2 (x1, x2)
Law of Diminishing MP - Correct answer-the marginal product of a factor will
diminish as we get more of that factor; applies only when all other inputs are fixed
Diminishing TRS - Correct answer-as factor x1 increases and factor x2 decreases,
TRS decreases; implies isoquant has convex shape
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
