Quiz 2 F2000 - Economics 2G03/2X03 Fall 2000 Sections 1...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Economics 2G03/2X03 Fall 2000 Quiz 2 Total Marks=70 Instructor: Fred Aswani October 18 th 2000 Part A-(20 marks-5 marks each). Choose the best answer. 1. Suppose that the production function for good y is given by y=az 1 + bz 2 , so the marginal rate of technical substitution of input 2 for input 1 is a/b. If w 1 is the price of input 1 and w 2 is the price of input 2, and w 1 /w 2 < a/b, then a. Input 1 and input 2 are complements in production b. Only input 2 will be used to minimize the cost of producing any output level c. Only input 1 will be used to minimize the cost of producing any output level d. The marginal cost of production is increasing 2. Suppose the production function for good y is given by y= min(2z 1 , 3z 2 ), then a. LMC(y) is constant for all y b. The ratio of input 1 to input 2 required by the production process is 2/3 c. The ratio of input 1 to input 2 required by the production process is 3/2 d. Both a and b are true e. Both a and c are true 3. Suppose there is a single factor of production and marginal product is falling
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 2

Quiz 2 F2000 - Economics 2G03/2X03 Fall 2000 Sections 1...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online