EC270: Microeconomic Theory I Chapters 19:
Technology Practice Questions & Answers (The
Ultimate Guide for 2026/2027)
©L. McLeod
Fall 2025
1 Multiple Choice Questions
1. (a)
2. (a)
3. (c)
4. (a)
5. (e)
6. (e)
7. (e)
8. (b)
9. (b)
10. (b)
1.1 Economic Concepts to Remember
Equation of an Isoquant : an isoquant represents the set of all possible combinations of inputs (x1 and x2)
that are just sufficient to produce a given amount of output (y) given the production technology
(f(x1,x2)).
y = f(x1,x2)
Returns-to-Scale: describes how the output level changes as all input levels change in direct proportion.
To check, multiply all inputs in the production function (f(x1,x2)) by the same constant (e.g, t) and see
if you get more/less/or the same as t times the original level of output:
f(t · x1,t · x2) > t · f(x1,x2) then f(x1,x2) exhibits increasing returns to scale (IRS) f(t · x1,t · x2)
= t · f(x1,x2) then f(x1,x2) exhibits constant returns to scale (CRS) f(t · x1,t · x2) < t · f(x1,x2)
then f(x1,x2) exhibits decreasing returns to scale (DRS)
Diminishing Marginal Product: Diminishing marginal product of input xi means the marginal product of xi
becomes smaller as the level of xi increases. That is, if:
1
, Answers Practice Questions (Chapters 19: Technology) EC270: Microeconomic Theory I
2
1.2 Multiple Choice Solutions
Question 1 : A firm has the production function . The isoquant on which output 80
is has the equation:
Answer:
y = f (x 1 ,x 2 )
3
80 10
= x 01. 60 x 02. 30
3 6 3
8010
= x110x210 3 6
3 −
x 210 10
= 8010x1 −2
x 2 =80 x 1
Question 2 : A firm has the production function f(x1,x2) = . The isoquant on which output 30 is has
the equation: Answer:
y = f (x 1 ,x 2 )
5
30 10
= x 11 x 02. 50
5 10 5
3010
= x110x210 5 10
5 −
x 210 10
= 3010x1 −2
x 2 =30 x 1
Question 3 : A firm has the production function f(x1,x2) = . The isoquant on which output 70 is has
the equation: Answer:
y = f(x1,x2)
2
70 10
= x 01. 8 x 02. 2
41 1
705
= x15x25 1 4
1 −
x 25 5
= 705x1 −4
x 2 =70 x 1
Question 4 : A firm has the production function . The isoquant on which output is 50
has the equation Answer:
y = f(x1,x2)
105 = x21.50x02.50
50
1 51
502 = x12x22
©L. McLeod, Fall 2025
Technology Practice Questions & Answers (The
Ultimate Guide for 2026/2027)
©L. McLeod
Fall 2025
1 Multiple Choice Questions
1. (a)
2. (a)
3. (c)
4. (a)
5. (e)
6. (e)
7. (e)
8. (b)
9. (b)
10. (b)
1.1 Economic Concepts to Remember
Equation of an Isoquant : an isoquant represents the set of all possible combinations of inputs (x1 and x2)
that are just sufficient to produce a given amount of output (y) given the production technology
(f(x1,x2)).
y = f(x1,x2)
Returns-to-Scale: describes how the output level changes as all input levels change in direct proportion.
To check, multiply all inputs in the production function (f(x1,x2)) by the same constant (e.g, t) and see
if you get more/less/or the same as t times the original level of output:
f(t · x1,t · x2) > t · f(x1,x2) then f(x1,x2) exhibits increasing returns to scale (IRS) f(t · x1,t · x2)
= t · f(x1,x2) then f(x1,x2) exhibits constant returns to scale (CRS) f(t · x1,t · x2) < t · f(x1,x2)
then f(x1,x2) exhibits decreasing returns to scale (DRS)
Diminishing Marginal Product: Diminishing marginal product of input xi means the marginal product of xi
becomes smaller as the level of xi increases. That is, if:
1
, Answers Practice Questions (Chapters 19: Technology) EC270: Microeconomic Theory I
2
1.2 Multiple Choice Solutions
Question 1 : A firm has the production function . The isoquant on which output 80
is has the equation:
Answer:
y = f (x 1 ,x 2 )
3
80 10
= x 01. 60 x 02. 30
3 6 3
8010
= x110x210 3 6
3 −
x 210 10
= 8010x1 −2
x 2 =80 x 1
Question 2 : A firm has the production function f(x1,x2) = . The isoquant on which output 30 is has
the equation: Answer:
y = f (x 1 ,x 2 )
5
30 10
= x 11 x 02. 50
5 10 5
3010
= x110x210 5 10
5 −
x 210 10
= 3010x1 −2
x 2 =30 x 1
Question 3 : A firm has the production function f(x1,x2) = . The isoquant on which output 70 is has
the equation: Answer:
y = f(x1,x2)
2
70 10
= x 01. 8 x 02. 2
41 1
705
= x15x25 1 4
1 −
x 25 5
= 705x1 −4
x 2 =70 x 1
Question 4 : A firm has the production function . The isoquant on which output is 50
has the equation Answer:
y = f(x1,x2)
105 = x21.50x02.50
50
1 51
502 = x12x22
©L. McLeod, Fall 2025
