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CHAPTER 9—LINEAR PROGRAMMING
MULTIPLE CHOICE
1.
When an LP objective function is to maximize profits:
a.
resource constraints must be of the
≤
variety.
b.
resource constraints must be of the
≥
variety.
c.
all input costs must be variable.
d.
the total revenue function must not be linear.
ANS: A
2.
If X > 0 in the primal solution:
a.
the marginal value of inputs just equals the marginal value of output in X production.
b.
the marginal value of inputs exceeds the marginal value of output in X production.
c.
L
X
> 0 in the dual solution.
d.
L
X
< 0 in the dual solution.
ANS: A
3.
When the primal LP problem is to maximize revenue subject to various input constraints, the shadow
prices of inputs in the dual constraints:
a.
equal the marginal revenue product of each input.
b.
are positive for inputs with excess capacity.
c.
equals zero for fully utilized inputs.
d.
equal the marginal product of each input.
ANS: A
4.
If the primal objective function is to minimize cost subject to output constraints, the dual objective
function is to maximize:
a.
revenue.
b.
profits.
c.
output.
d.
the value of inputs employed.
ANS: D
5.
For managerial decision problems analyzed using the LP approach:
a.
some input costs must be fixed.
b.
all input costs must be fixed.
c.
increasing returns to scale must predominate.
d.
returns to each factor input must be constant.
ANS: A
6.
Unit costs are always constant if:
a.
input prices are constant.
b.
the total cost function is linear.
c.
constant returns to scale are operative.
d.
input prices are constant and the total cost function is linear.
ANS: D
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View Full Document7.
If the objective function is to maximize revenue subject to a binding labor constraint, then the shadow
price of labor is:
a.
the marginal product of labor.
b.
the marginal revenue product of labor.
c.
negative.
d.
zero.
ANS: B
8.
If the capital slack variable = 0, then:
a.
the shadow price on capital is > 0.
b.
the marginal product of capital = 0.
c.
the marginal revenue product of capital = 0.
d.
excess capital capacity exists.
ANS: A
9.
Constrained profit maximization requires:
a.
no excess capacity.
b.
excess capacity.
c.
a linear profit function.
d.
constrained maximization of the total profit contribution.
ANS: D
10.
If Q
A
> 0, then the marginal value of inputs employed:
a.
equals the marginal value of output.
b.
is less than the marginal value of output.
c.
equals current input prices.
d.
exceeds the marginal value of output.
ANS: A
11.
Linear programming is an analytical technique used to:
a.
solve constrained optimization problems.
b.
project trends.
c.
increase worker productivity.
d.
estimate linear demand functions.
ANS: A
12.
Linear programming assumes:
a.
falling input prices.
b.
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 Summer '10
 LEITER

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