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Ahw1-09 (1) - Econ 1500 Quiz 1 The Production...

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Econ 1500: Quiz 1 The Production Function (Mankiw, Chapter 3) 1. A profit-maximizing firm will hire labor up to the point where: . the marginal product of labor equals the marginal product of capital. **. the marginal product of labor equals the real wage. . marginal revenue equals zero. . the real wage equals the real rental price of capital. 2. Constant returns to scale occurs when: **. output doubles when the amounts of all factor inputs double. . output remains constant over time. . the marginal productivity of labor equals the marginal productivity of capital. . the marginal products of capital and labor do not change. 3. The FALSE statement below is: . the extra revenue a firm gets from an extra unit of capital equals the marginal product of capital times the price of output. **. the extra revenue a firm gets from an extra unit of labor equals the marginal product of labor times the wage. . a perfectly competitive firm's labor demand curve is the MPL schedule.
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