Chapter 6 Practice Questions

Draw total output/product curve, AP curve, and MP curve following slide 8 of Ch6 notes. After you finish, then choose the following choice that best describes how well you do.

I drew three curves and understand them well.

In a production process, all inputs are increased by 10%; but output increases less than 10%. This means that the firm experiences:

decreasing returns to scale.

When the average product is decreasing, marginal product

is less than average product.

The function which shows combinations of inputs that yield the same output is called a(n)

isoquant curve.

A production function in which the inputs are perfectly substitutable would have isoquants that are

linear

The slope of the total product curve is the

marginal product.

The marginal rate of technical substitution is equal to the

ratio of the marginal products of the inputs.

We manufacture automobiles given the production function q = 5KL where q is the number of autos assembled per eight-hour shift, K is the number of robots used on the assembly line (capital) and L is the number of workers hired per hour (labor). If we use K = 10 robots and L = 10 workers in order to produce q = 450 autos per shift, then production is

technologically inefficient.

Marginal product crosses the horizontal axis (is equal to zero) at the point where

total product is maximized.

A firm's marginal product of labor is 4 and its marginal product of capital is 5. If the firm adds one unit of labor, but does not want its output quantity to change, the firm should:

use 0.8 fewer units of capital.