econ 510 test 2
changes in the price of an input cause
slope changes in the isocost line.
fixed costs exist only in
the short run
if quantity demanded for sneakers falls by 6 percent when price increases 20 percent, we know that the absolute value of the own price elasticity of sneakers is
0.3
suppose the cost function is C(Q)=50+Q-10Q2+2Q3. what is the variable cost of producing 10 units?
1010
suppose the cost function is C(Q)=50+Q-10Q2+2Q3. what is the total cost of producing 10 units?
1060
suppose the production function is given by q=3k+4l. what is the average product of capital when 10 units of capital and 10 units of labor are employed?
7
if apples have an own price elasticity of -1.2 we know the demand is
elastic
suppose you are a manager of a factory. you purchase five (5) new machines at one million dollars each. if you can resell two of the machines for $500,000 and three of the machines for $200,000, what are the sunk costs of purchasing the machines?
$3.4 million
according to the table below, what is the total cost of producing 125 units of output
2,400
the marginal product of capital of producing 2,991 units of output (find point a) in the table below
26.7
suppose the production function is given by q=3k+4l. what is the marginal product of capital when 5 units of capital and 10 units of labor are employed?
3
according to the table below, what is the marginal cost of producing 90 inputs of output
8.75
economies of scope exist when
C(Q1)+C(Q2)>C(Q1,Q2)
the demand for labor by a profit maximizing firm is determined by
VMPL=W
the costs of production include
accounting costs and opportunity costs
which curve does the marginal cost curve intersect at the minimum point?
average total cost curve and average variable cost curve
the production function Q=L.5K.5 is called
cobb douglas
suppose the demand for good x is ln qxd=21-0.8 in px-1.6 ln py+6.2 ln M+0.4 ln ax. then we know good x and y are
complements
the elasticity which shows the responsiveness of the demand for good due to changes in the price of a related good is the
cross-price elasticity
average fixed cost
declines continuously as output is expanded
when marginal cost curve is below an average cost curve, average cost is
declining with output
suppose the long-run average cost curve is U-shaped. when LRAC is in the increasing stage, there exist
diseconomies of scale
the elasticity that measures the responsiveness of consumer demand to changes in income is the
income elasticity
the quantity consumed of a good is relatively unresponsive to changes in price whenever demand is
inelastic
an income elasticity less than zero tells us that the good is
inferior good
isoquants are normally drawn with a convex shape because
inputs are not perfectly substituable
the combinations of inputs that produce a given level of output are depicted by
isoquants
costs that are forever lost after they have been paid are
sunk costs
which of the following conditions is true when a producer minimizes the cost of producing a given level of output
the MRTS is equal to the ratio of input prices, and the marginal product per dollar spent on all inputs is equal
the long run is defined as
the horizon in which the manager can adjust all factors of production
an isoquant defines the combination of inputs that yield the producer
the same level of output
costs that change as output changes are
variable costs
the production function in the table below exhibits decreasing marginal returns to capital over what output range
between 2,391 and 3,048
the change in total output attributable to the last unit of an input is the
marginal product