hw3 - BUAD 351 - Economic Analysis for Business Decisions...

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BUAD 351 - Economic Analysis for Business Decisions Homework 3 due: Thu 02/26/2009 PART (i): multiple choice please provide the answers in the following box: question answer 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 1. A strategy for deploying inputs to produce output is ine¢ cient if a. it would be possible to replace some of the workers with machinery or electronic equipment. b. it is possible to produce more output with the same inputs by organizing or deploying the same inputs in a di±erent manner. 2. Economies of scale occur when a. total cost falls as output increases. b. average cost falls as output increases. c. the cost curve shifts as output increases d. all of the above. of inputs using e¢ cient production methods. a. Production possibilities set b. Cost function c. Production function d. Isoquant 4. The long run refers to a period of time over which c. Production technology increases d. All inputs are variable a. Fixed; sunk b. Fixed; explicit c. Variable; sunk d. Fixed; avoidable 1
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the marginal rate of technical substitution for labor with capital is a. 3 b. 300 c. 40 d. 1/3 7. Suppose that MP L = 50 and MP K = 30 . If W = 25 and R = 10 a. Is producing its output at the lowest possible cost b. Could reduce costs by employing more labor and less capital c. Could reduce costs by employing more capital and less labor
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This note was uploaded on 04/14/2009 for the course BUAD 351 taught by Professor Eastin during the Spring '07 term at USC.

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hw3 - BUAD 351 - Economic Analysis for Business Decisions...

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