Topic4_sample_answers

Topic4_sample_answers - BUAD350 September 20, 2007 Sample...

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BUAD350 September 20, 2007 Sample questions Topic 4 MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. ANSWERS: 1) B, 2) D, 3) D, 4) D, 5) D, 6) C, 7) A, 8) B, 9) C, 10) C 1) In the production function Y = AF(K, L), A is ________, K is ________, and L is ________. 1) A) the productivity of labor; investment; the size of the labor force B) total factor productivity; the capital stock; the number of workers employed C) the productivity of labor; the capital stock; the size of the labor force D) total factor productivity; investment; the number of workers employed 2) Suppose the economy's production function is Y = A K 0.3 L 0.7 . If K = 2000, L = 100, and A = 1, then Y = 246. If K and L both rise by 20%, and A is unchanged, by how much does Y increase? 2) A) 10% B) 15% C) 5% D) 20% 3) Suppose the economy's production function is Y = A K 0.3 L 0.7 . An adverse supply shock would 3) A) shift the production function up and increase marginal products at every level of
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Topic4_sample_answers - BUAD350 September 20, 2007 Sample...

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