ECON 2102 Exam #2 2025/2026 Exam
Questions and Answers | 100% Solved
A production function shows - 🧠ANSWER ✔✔How a firm's production
changes as quantity of labor and other inputs changes.
A production function shows the - 🧠ANSWER ✔✔Maximum output that can
be produced with varying combinations of factor inputs.
The period in which at least one input is fixed in quantity is the - 🧠ANSWER
✔✔Short run.
The short-run production function shows how output changes when -
🧠ANSWER ✔✔The quantity of labor changes.
The marginal physical product is the - 🧠ANSWER ✔✔Change in total
output associated with one additional unit of the variable input.
, If a firm could hire all the workers it wanted at a zero wage (i.e., the
workers are volunteers), the firm should hire - 🧠ANSWER ✔✔Enough
workers to produce where the MPP equals zero.
The change in total output associated with one additional unit of input is the
- 🧠ANSWER ✔✔Marginal physical product.
Diminishing returns occur because - 🧠ANSWER ✔✔A firm increases the
amount of a variable input without changing a fixed input.
In the short run, the law of diminishing returns - 🧠ANSWER ✔✔Can be
observed in every production process.
Which of the following is the best explanation of why the law of diminishing
returns does not apply in the long run? - 🧠ANSWER ✔✔In the long run,
firms can increase the availability of space and equipment to keep up with
the increase in variable inputs.
If an additional unit of labor costs $20 and has a MPP of 15 units of output,
the marginal cost is - 🧠ANSWER ✔✔$1.33.
If the marginal physical product (MPP) is falling, then the - 🧠ANSWER
✔✔Marginal cost of each unit of output is rising.
Questions and Answers | 100% Solved
A production function shows - 🧠ANSWER ✔✔How a firm's production
changes as quantity of labor and other inputs changes.
A production function shows the - 🧠ANSWER ✔✔Maximum output that can
be produced with varying combinations of factor inputs.
The period in which at least one input is fixed in quantity is the - 🧠ANSWER
✔✔Short run.
The short-run production function shows how output changes when -
🧠ANSWER ✔✔The quantity of labor changes.
The marginal physical product is the - 🧠ANSWER ✔✔Change in total
output associated with one additional unit of the variable input.
, If a firm could hire all the workers it wanted at a zero wage (i.e., the
workers are volunteers), the firm should hire - 🧠ANSWER ✔✔Enough
workers to produce where the MPP equals zero.
The change in total output associated with one additional unit of input is the
- 🧠ANSWER ✔✔Marginal physical product.
Diminishing returns occur because - 🧠ANSWER ✔✔A firm increases the
amount of a variable input without changing a fixed input.
In the short run, the law of diminishing returns - 🧠ANSWER ✔✔Can be
observed in every production process.
Which of the following is the best explanation of why the law of diminishing
returns does not apply in the long run? - 🧠ANSWER ✔✔In the long run,
firms can increase the availability of space and equipment to keep up with
the increase in variable inputs.
If an additional unit of labor costs $20 and has a MPP of 15 units of output,
the marginal cost is - 🧠ANSWER ✔✔$1.33.
If the marginal physical product (MPP) is falling, then the - 🧠ANSWER
✔✔Marginal cost of each unit of output is rising.
