Chapter 13 Practice Questions

Let L represent the number of workers hired by a firm, and let Q represent that firm's quantity of output. Assume two points on the firm's production function are (L = 12, Q = 122) and (L = 13, Q = 132). Then the marginal product of the 13th worker is a.) 8 units of output. b.) 10 units of output. c.) 122 units of output. d.) 132 units of output.

b.) 10 units of output.

Economists normally assume that the goal of a firm is to a.) maximize its total revenue. b.) maximize its profit. c.) minimize its explicit costs. d.)minimize its total cost.

b.) maximize its profit.

5. When adding another unit of labor leads to an increase in output that is smaller than the increases in output that resulted from adding previous units of labor, the firm is experiencing a.) diminishing labor. b.) diminishing output. c.) diminishing marginal product. d.) negative marginal product.

c.) diminishing marginal product.

For a firm, the production function represents the relationship between a.) implicit costs and explicit costs. b.) quantity of inputs and total cost. c.) quantity of inputs and quantity of output. d.) quantity of output and total cost.

c.) quantity of inputs and quantity of output.

The marginal product of labor is equal to the a.) incremental cost associated with a one unit increase in labor. b.) incremental profit associated with a one unit increase in labor. c.) increase in labor necessary to generate a one unit increase in output. d.) increase in output obtained from a one unit increase in labor.

d.) increase in output obtained from a one unit increase in labor.