Econ
Use the following two statements to answer this question: 1.Production functions describe what is technically feasible when the firm operates efficiently 2. The production function shows the least cost method of producing a given level of output
1 is true, 2 is false
The slope of the total product curve is the
marginal product
For many firms, capital is the production input that is typically fixed in the short run. Which of the following firms would face the longest time required to adjust its capital inputs
nuclear power plant
If capital is measured on the vertical axis and labor is measured on the horizontal axis, the slope of an isoquant can be interpreted as the
rate at which the firm can replace capital with labor without changing the output rate.
A function that indicates the maximum output per unit of time that a firm can produce, for every combination of inputs with a given technology, is called
A production function
The law of diminishing returns refers to diminishing
Average returns
Technological improvement
Can hide the presence of diminishing returns, can be shown as a shift in the total product curve, allows more output to be produced with the same combination of inputs
Which of the following inputs are variable in the long run
Labor, plant size, capital & equipment. ALL OF THE ABOVE
The marginal rate of technical substitution is equal to
The ratio of the marginal products of the inputs
A firm's expansion path is
a curve that shows the least-cost combination of inputs needed to produce each level of output for given input prices.
As we move downward along a typical isoquant, the slope of the isoquant
becomes flatter
An isoquant
is a curve that shows all the combinations of inputs that yield the same total output.
The marginal product of an input is
the addition to total output due to the addition of the last unit of an input, holding all other inputs constant.
If the isoquants are straight lines, then
the marginal rate of technical substitution of inputs is constant.
