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test1-6 - (C 20.1flsoquants are smoot a Economics 2G03/2X03...

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Unformatted text preview: (C) 20.1flsoquants are smoot a Economics 2G03/2X03 Page 6 of 13 k the: , MR fl W A/Cost minimizing bundle intersects the isoquant “7%: v 1;: b. MRIS equals the slope of theiSoqnant ,M K N 4% i: c. Price of the final good is equal to the MC of producti on LC, ._ “1.11 @P per dollar of an input equals MP per dollar of all other inputs. ! A 21 .The defining characteristics of 39599-5313 returns to scale may be summarized as: (for c>1) I 4 Q? 2, @ f(cK,cL)>cf(K,L) , h g; i K b4 f<cK,cL)=cf(K,L) , , Wkly: c. ‘ f(cK,cL) < cf(K,L) _ 2 4°15 > MS /d. y=m1n(cK,cL) .‘ b 22.For a production function with decreasing returns to scale, a roportiona 'ncrease ' out ut: , Wé)‘ Requires a less-than—proportional growth in all inputs b Requires a more-than-proportional growth in all inputs 0. Exhibits diminishing returns , g; m , , v \ s _ _ é} ‘ \m . 5.“ d. Requires proportional growth in all inputs. E 23.61veninput-priees and the usual strategy of a profit maximizing firm, efficient production occurs at: a.“ The highest isoquant y for a given isocost c b. The lowest isoquant y for a given isocost c c The highest isocost c for a given isoquant ‘dj, V The lowest isocost C for a given isoquant e. aord v t , “ {4; " f.\ i : K IQ? ...
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