ch 5 quiz
suppose the production for good X is characterized by the following production function, Q=K0.5L0.5, where K Is the fixed input in the short run. If the per-unit rental rate of capital, or, is $15 and the per unit wage, W, is $5, Then the average fixed cost of using 16 units of capital and 25 units of labor is:
$12
What is the value marginal product of labor if: P= $10, MPL=$25, and APL=40
$250
suppose that production for good X is characterized by the following production function, Q=K0.5L0.5, where K is the fixed input in the short run. If per unit rental rate of capital, r, is $25 And the per unit wage, W, is $15, then the average total cost of using 81 units of capital and nine units of labor is:
$80
which of the following cost functions exhibit cost complementarity?
-4Q1Q2. + 8Q1
The production function is Q=K^6L^4. The marginal rate of technical substitution is
2/3K L^-1
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?
3
The average product of labor depends on how many units of:
Labor and capital are used
For managers should use inputs at levels where the
Marginal benefit equals marginal cost and value marginal product of labor equals wage
Supposed to marginal product of labor is 10 and the marginal product of capital is 8. If the wage rate is $5 and the price of capital is $2, then in order to minimize costs the firm should use:
More capital and less labor
when there are economies of scope between products, selling off an Unprofitable subsidiary could lead to
Only a minor reduction in cost
According to the table below what is the marginal cost of production 90 units of output?
8.75
Which curve(s) does the marginal cost curve intersect at the (their) Minimum point?
Average total cost curve and average variable cost curve
suppose the w=$20 and r=$30. the isocost line for a firm in this industry is:
K = 0.033C - 0.66L
The manager institutes an incentive structure to ensure
The firm produces on the production function
The long run is defined as:
The horizon in which the manager can adjust all factors of production
cost complementarity exists in a multiproduct cost function when:
The marginal cost of producing one output is reduced when the output of another product is increased
The marginal product of an input is defined as the change in:
Total output attributable to the last unit of an input
if the marginal product per dollar spent on capital is less than the marginal product per dollar spent on labor, Then in order to minimize costs the firm should use:
less capital and more labor.
The point where diminishing marginal returns has begun to affect production is best characterized by the point where the:
marginal product curve begins to be negatively sloped.
suppose the marginal product of labor is 8 and the marginal product of capital is 2. if the wage rate is $4 and the price of capital is $2, then in order to minimize costs the firm should:
more labor and less capital
Fixed costs exist only in
short run
For the cost function C(Q) = 100 + 2Q + 3Q2, the marginal cost of producing 10 units of output is
10
Suppose the production function is given by Q = 3K + 4L. What is the average product of capital when 5 units of capital and 10 units of labor are employed?
11
What is the average product of labor given that the level of labor equals 10, total output equals 1200, and the marginal product of labor equals 200
120
For the cost function C(Q) = 100 + 2Q + 3Q2, the marginal cost of producing 2 units of output is
16
An isocost line
Represents the combinations of K and L that cost the firm the same amount of money
You are an efficiency expert hired by a manufacturing firm that uses K and L as inputs. The firm produces and sells a given output. If w = $40, r = $100, MPL = 4, and MPK = 40 the firm:
Should use more K and less L to cost minimize
The feasible means of converting raw inputs such a steel labor and machinery into an output are summarized by
Technology
which of the following conditions is true when a producer Minimize the cost of producing a given level of output?
The marginal product per dollar spent on all inputs is equal
The production function in the table below exhibits decreasing marginal returns to capital over what output range
between 2391 and 3048