MBA 701 Final | Questions with 100% Verified Answers | Latest
Update 2026/2027
Question: The production function
Answer:
Mathematical function that defines the max amount of output that can be produced with
a given set of inputs
Question: Short run decisions
Answer:
period of time where some factors of production (inputs) are FIXED and constrain a
manager's decision
Question: Long run decisions
Answer:
period of time over which all factors of production (inputs) are VARIABLE and can be
adjusted by a manager
Question: Total product
Answer:
maximum level of output that can be produced with a given amount of inputs
Question: Average product
Answer:
a measure of the output produced per unit of input
Question: Marginal product
Answer:
the change in total product (output) attributable to the last unit of input
Question: To maximize profits, the manager will hire labor (capital) until...
Answer:
the value of the marginal product of labor (capital) equals the wage rate (rental rate)
, Question: Law of diminishing returns
Answer:
the marginal product of an additional unit of output will at some point be lower than the
marginal product of the previous unit
Question: To maximize profits, use input levels at which...
Answer:
marginal benefit equals marginal cost
Question: Linear production function
Answer:
assumes a perfect linear relationship between all inputs and total output
Question: Leontief production function
Answer:
assumes inputs are used in fixed proportions
Question: Cobb-Douglas production function
Answer:
assumes some degree of substitutability among inputs
Question: Isoquants
Answer:
capture the tradeoff between combinations of inputs that yield the same output in the
long run, when all inputs are variable
Question: Marginal rate of technical substitution
Answer:
the rate at which a producer can substitute between two inputs and maintain the same
level of output
Question: Isocosts
Answer:
combination of inputs that yield the same cost
Update 2026/2027
Question: The production function
Answer:
Mathematical function that defines the max amount of output that can be produced with
a given set of inputs
Question: Short run decisions
Answer:
period of time where some factors of production (inputs) are FIXED and constrain a
manager's decision
Question: Long run decisions
Answer:
period of time over which all factors of production (inputs) are VARIABLE and can be
adjusted by a manager
Question: Total product
Answer:
maximum level of output that can be produced with a given amount of inputs
Question: Average product
Answer:
a measure of the output produced per unit of input
Question: Marginal product
Answer:
the change in total product (output) attributable to the last unit of input
Question: To maximize profits, the manager will hire labor (capital) until...
Answer:
the value of the marginal product of labor (capital) equals the wage rate (rental rate)
, Question: Law of diminishing returns
Answer:
the marginal product of an additional unit of output will at some point be lower than the
marginal product of the previous unit
Question: To maximize profits, use input levels at which...
Answer:
marginal benefit equals marginal cost
Question: Linear production function
Answer:
assumes a perfect linear relationship between all inputs and total output
Question: Leontief production function
Answer:
assumes inputs are used in fixed proportions
Question: Cobb-Douglas production function
Answer:
assumes some degree of substitutability among inputs
Question: Isoquants
Answer:
capture the tradeoff between combinations of inputs that yield the same output in the
long run, when all inputs are variable
Question: Marginal rate of technical substitution
Answer:
the rate at which a producer can substitute between two inputs and maintain the same
level of output
Question: Isocosts
Answer:
combination of inputs that yield the same cost
