ch18-210 - ch18 Multiple Choice Identify the choice that...

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ch18 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. A firm has the production function f ( x , y ) = x 1.40 y 1.90 . This firm has a. decreasing returns to scale and diminishing marginal product for factor x . b. increasing returns to scale and decreasing marginal product for factor x . c. decreasing returns to scale and increasing marginal product for factor x . d. constant returns to scale. e. None of the above. ____ 2. If the exponents in the CD production function were 0.80 for x 1 and 0.20 for x 2 , this production function would exhibit (constant, increasing, decreasing) returns to scale and (would, would not) have diminishing technical rate of substitution. a. constant, would b. decreasing, would not c. increasing, would d. constant, would not e. decreasing, would ____ 3. In any production process, the marginal product of labor equals a. the value of total output minus the cost of the fixed capital stock. b. the change in output per unit change in labor input for “small” changes in the amount of input. c. total output divided by total labor inputs. d. total output produced with the given labor inputs. e. the average output of the least-skilled workers employed by the firm. ____ 4. If a firm moves from one point on a production isoquant to another point on the same isoquant, which of the following will certainly not happen? a. A change in the level of output b. A change in the ratio in which the inputs are combined c. A change in the marginal products of the inputs d. A change in the rate of technical substitution e. A change in profitability ____ 5. Which of the following production functions exhibit constant returns to scale? In each case y is output and K and L are inputs. (1) y = . (2) y = 3 . (3) y = . (4) y = 2 K + 3 L . a. 1, 2, and 4 b. 2, 3, and 4 c. 1, 3, and 4 d. 2 and 3 e. 2 and 4 ____ 6. A firm has the production function f ( X , Y ) = , where X is the amount of factor x used and Y is the amount of factor y used. On a diagram we put X on the horizontal axis and Y on the vertical axis. We draw some isoquants. Now we draw a straight line on the graph and we notice that wherever this line meets an isoquant, the isoquant has a slope of 23. The straight line we drew a. is vertical. b. is horizontal.
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c. is a ray through the origin with slope 3. d. is a ray through the origin with slope 4. e. has a negative slope. ____ 7. The production function is given by F ( L ) . Suppose that the cost per unit of labor is $8 and the price of output is 4, how many units of labor will the firm hire? a.
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ch18-210 - ch18 Multiple Choice Identify the choice that...

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