ECON 5370 EXAM 3 QUESTIONS AND CORRECT ANSWERS
100% VERIFIED
Based on the output-maximization problem given a cost constraint, which of the
following, if any, are true?
a.
At the optimal input combination, the slope of the isoquant must equal the slope of the
isocost line.
b.
The optimal solution occurs at the boundary of the feasible region of input
combinations.
c.
The optimal solution occurs at the point where the isoquant is tangent to the isocost
lines.
d.
all of the above
e.
none of the above - ANSWER d. all of the above
Fill in the missing data to solve this problem.
Variable Total Average Marginal Input Product Product Product
4 ? 70 ----
, 5 ? ? 40
6 350 ? ?
What is the total product for 5 units of input, and what is the marginal product for 6 units
of input?
a.
320 and 30
b.
430 and 8
c.
360 and 15
d.
350 and 20
e.
400 and 10 - ANSWER a.
320 and 30
Given a Cobb-Douglas production function estimate of Q = 1.19L.72K.18 for a given
industry, this industry would have:
a.
increasing returns to scale
b.
,constant returns to scale
c.
decreasing returns to scale
d.
negative returns to scale
e.
none of the above - ANSWER c.
decreasing returns to scale
Holding total output constant, the rate at which one input X can be substituted for
another input Y in a production process is:
a.
the slope of the isoquant curve
b.
the marginal rate of technical substitution (MRTS)
c.
equal to MPx/MPy
d.
all of the above
e.
none of the above - ANSWER d.
all of the above
, Suppose that the marginal product of labor is 100, the price of labour is 10 and marginal
product of capital is 200, the price of capital is $30. The firm should _____.
a.
The firm is indistinguishable from any other according to the Equimarginal principle.
b.
c and d
c.
will use relatively more capital.
d.
will use relatively more labor
e.
The firm should not make any changes - they are currently efficient - ANSWER d.
The firm should use relatively more labor
In a production process, an excessive amount of the variable input relative to the fixed
input is being used to produce the desired output. This statement is true for:
a.
stage II
b.
stages I and II
100% VERIFIED
Based on the output-maximization problem given a cost constraint, which of the
following, if any, are true?
a.
At the optimal input combination, the slope of the isoquant must equal the slope of the
isocost line.
b.
The optimal solution occurs at the boundary of the feasible region of input
combinations.
c.
The optimal solution occurs at the point where the isoquant is tangent to the isocost
lines.
d.
all of the above
e.
none of the above - ANSWER d. all of the above
Fill in the missing data to solve this problem.
Variable Total Average Marginal Input Product Product Product
4 ? 70 ----
, 5 ? ? 40
6 350 ? ?
What is the total product for 5 units of input, and what is the marginal product for 6 units
of input?
a.
320 and 30
b.
430 and 8
c.
360 and 15
d.
350 and 20
e.
400 and 10 - ANSWER a.
320 and 30
Given a Cobb-Douglas production function estimate of Q = 1.19L.72K.18 for a given
industry, this industry would have:
a.
increasing returns to scale
b.
,constant returns to scale
c.
decreasing returns to scale
d.
negative returns to scale
e.
none of the above - ANSWER c.
decreasing returns to scale
Holding total output constant, the rate at which one input X can be substituted for
another input Y in a production process is:
a.
the slope of the isoquant curve
b.
the marginal rate of technical substitution (MRTS)
c.
equal to MPx/MPy
d.
all of the above
e.
none of the above - ANSWER d.
all of the above
, Suppose that the marginal product of labor is 100, the price of labour is 10 and marginal
product of capital is 200, the price of capital is $30. The firm should _____.
a.
The firm is indistinguishable from any other according to the Equimarginal principle.
b.
c and d
c.
will use relatively more capital.
d.
will use relatively more labor
e.
The firm should not make any changes - they are currently efficient - ANSWER d.
The firm should use relatively more labor
In a production process, an excessive amount of the variable input relative to the fixed
input is being used to produce the desired output. This statement is true for:
a.
stage II
b.
stages I and II
