Econ302-hw4-spring09 - 1 Econ302 Homework Assignment 4 Due...

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Econ302 Homework Assignment 4 Due Thursday April 2 (Problems 2 and 4 in part II will be graded) Name: Section: Part I. Multiple Choice Questions 1. A production function defines the output that can be produced a. at the lowest cost, given the inputs available. b. with the fewest amount of inputs. c. if the firm is technically efficient. d. in a given time period if no additional inputs are hired. e. as technology changes over time. 2. Graphically, the average productivity of labor would be illustrated by a. the slope of the total product curve at the relevant point. b. the slope of the marginal productivity curve at the relevant point. c. the negative of the slope of the marginal productivity curve at the relevant point. d. the slope of the chord connecting the origin with the relevant point on the total output curve. 3. What describes the graphical relationship between average product and marginal product? a. Average product cuts marginal product from above, at the maximum point of marginal product. b. Average product cuts marginal product from below, at the maximum point of marginal product. c. Marginal product cuts average product from above, at the maximum point of average product. d. Marginal product cuts average product from below, at the maximum point of average product. e. Average and marginal product do not intersect. 1
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Figure 1 4. Refer to Figure 1. The situation pictured is one of a. constant returns to scale, because the line through the origin is linear. b. decreasing returns to scale, because the isoquants are convex. c. decreasing returns to scale, because doubling inputs results in less than double the amount of output. d. increasing returns to scale, because the isoquants are convex. e. increasing returns to scale, because doubling inputs results in more than double the amount of output. 5. The production function q = a. exhibits constant returns to scale and constant marginal productivities for K and L . b. exhibits diminishing returns to scale and diminishing marginal productivities for K and L . c. exhibits constant returns to scale and diminishing marginal productivities for K and L. d. exhibits diminishing returns to scale and constant marginal productivities for K and L . 6. Suppose MP L = 40 and MP K = 20 and the rental rate on capital is $10. If the level of production is currently efficient the wage rate must be a. $10 b. $40 c. $5 d. $20 e. none of the above 7. A linear total cost curve which passes through the origin implies that a. average cost is constant and marginal cost is variable. b.
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This note was uploaded on 03/24/2009 for the course ECON 302 taught by Professor Avrin-rad during the Spring '09 term at University of Illinois, Urbana Champaign.

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Econ302-hw4-spring09 - 1 Econ302 Homework Assignment 4 Due...

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