ECP3704 UPDATED COMPREHENSIVE ALL
QUESTIONS AND ANSWERS SURE A+
✔✔An isocost line
Represents the combinations of w and K that cost the firm the same amount of moey
Represents the combinations of K and L that cost the firm the same amount of money
Represents the combinations of r and w that cost the firm the same amount of money
Has a convex shape - ✔✔Represents the combinations of K and L that cost the firm the
same amount of money
✔✔With a linear production function there is a
Perfect complementary relationship between all inputs
Perfect substitutable relationship between all inputs
Fixed-proportions relationship between all inputs
Variable-proportions relationship between all inputs - ✔✔Perfect substitutable
relationship between all inputs
✔✔When marginal cost curve is below an average cost curve, average cost is
Increasing with output
Declining with output
Not varying with output
None of the statements associated with this question are correct - ✔✔Declining with
output
✔✔It is profitable to hire labor so long as the
MPL is greater than wage
MPL is less than wage
VMPL is less than wage
VMPL is greater than wage - ✔✔VMPL is greater than wage
✔✔The Leontief production function
Implies inputs are used in variable proportions
, Implies inputs are used in fixed proportions
Is Q = max {bK, cL}
Is Q = aK + bL - ✔✔Implies inputs are used in fixed proportions
✔✔The short-run is defined as the time-frame
In which there are no fixed factors of production
In which there are fixed factors of production
Less than one year
Less than three years - ✔✔In which there are fixed factors of production
✔✔For the cost function C(Q) = 200 + 3Q + 8Q^2 + 4Q^3, what is the average fixed
cost of producing six units of output?
18.31
212.61
42.12
33.33 - ✔✔33.33
✔✔The marginal product of an input is defined as the change in
Average output attributable to the last unit of an input
Total output attributable to the last unit of an input
Total input attributable to the last unit of an output
Average output attributable to the last unit of an output - ✔✔Total output attributable to
the last unit of an input
✔✔The absolute value of the slope of the isoquant is the:
Marginal rate of technical substitution
Marginal product of capital
Marginal rate of substitution
Value marginal product of labor - ✔✔Marginal rate of technical substitution
✔✔Given the linear production function Q = 10K + 5L, if Q = 10,000 and K = 500, how
much labor is utilized?
600 units
800 units
500 units
1000 units - ✔✔1000 units
✔✔Isoquants are normally drawn with a convex shape because:
Inputs are perfectly substitutable
Inputs are perfectly complementary
Inputs are not perfectly substitutable
Inputs are not perfectly complementary - ✔✔Inputs are not perfectly substitutable
QUESTIONS AND ANSWERS SURE A+
✔✔An isocost line
Represents the combinations of w and K that cost the firm the same amount of moey
Represents the combinations of K and L that cost the firm the same amount of money
Represents the combinations of r and w that cost the firm the same amount of money
Has a convex shape - ✔✔Represents the combinations of K and L that cost the firm the
same amount of money
✔✔With a linear production function there is a
Perfect complementary relationship between all inputs
Perfect substitutable relationship between all inputs
Fixed-proportions relationship between all inputs
Variable-proportions relationship between all inputs - ✔✔Perfect substitutable
relationship between all inputs
✔✔When marginal cost curve is below an average cost curve, average cost is
Increasing with output
Declining with output
Not varying with output
None of the statements associated with this question are correct - ✔✔Declining with
output
✔✔It is profitable to hire labor so long as the
MPL is greater than wage
MPL is less than wage
VMPL is less than wage
VMPL is greater than wage - ✔✔VMPL is greater than wage
✔✔The Leontief production function
Implies inputs are used in variable proportions
, Implies inputs are used in fixed proportions
Is Q = max {bK, cL}
Is Q = aK + bL - ✔✔Implies inputs are used in fixed proportions
✔✔The short-run is defined as the time-frame
In which there are no fixed factors of production
In which there are fixed factors of production
Less than one year
Less than three years - ✔✔In which there are fixed factors of production
✔✔For the cost function C(Q) = 200 + 3Q + 8Q^2 + 4Q^3, what is the average fixed
cost of producing six units of output?
18.31
212.61
42.12
33.33 - ✔✔33.33
✔✔The marginal product of an input is defined as the change in
Average output attributable to the last unit of an input
Total output attributable to the last unit of an input
Total input attributable to the last unit of an output
Average output attributable to the last unit of an output - ✔✔Total output attributable to
the last unit of an input
✔✔The absolute value of the slope of the isoquant is the:
Marginal rate of technical substitution
Marginal product of capital
Marginal rate of substitution
Value marginal product of labor - ✔✔Marginal rate of technical substitution
✔✔Given the linear production function Q = 10K + 5L, if Q = 10,000 and K = 500, how
much labor is utilized?
600 units
800 units
500 units
1000 units - ✔✔1000 units
✔✔Isoquants are normally drawn with a convex shape because:
Inputs are perfectly substitutable
Inputs are perfectly complementary
Inputs are not perfectly substitutable
Inputs are not perfectly complementary - ✔✔Inputs are not perfectly substitutable
