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KEY952F - BUSINESS 702 SECOND EXAM KEY FALL 1995 MANAGERIAL...

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Sheet1 Page 1 BUSINESS 702 SECOND EXAM KEY FALL 1995 MANAGERIAL ECONOMICS MULTIPLE CHOICE QUESTIONS (50 pts, 2pt each) 1. A new production function results following: A. a new wage agreement following collective bargaining. B. a surge in product demand. C. a decrease in the availability of needed inputs. > D. the successful completion of a training program that enhances worker productivity. 2. The relation between output and the variation in all inputs taken together is the: A. factor productivity of a production system. B. law of diminishing returns. > C. returns to scale characteristic of a production system. D. returns to factor characteristic of a production system. 3. An irrational employment policy is indicated when the marginal product of X is: > A. negative. B. positive. C. decreasing. D. increasing. 4. When PX = $60, MPX = 5 and MPY = 2, relative employment levels are optimal provided: > 5. When PX = $100, MPX = 10 and MRQ = $5, the marginal revenue product of X equals: > 6. The foregone value associated with the current rather than next-best use of a given asset is called: > 7. Unlike the marginal cost concept, the incremental cost concept: A. does not focus on individual managerial decisions. B. is not relevant for optimal output determination.
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Sheet1 Page 2 C. embodies sunk costs. > D. can involve multiple units of output. 8. In the long run, the: > 9. When îC < 1: > 10. Learning involves: > 11. When an LP objective function is to maximize profits: > A. resource constraints must be of the ó variety. B. resource constraints must be of the ò variety. C. all input costs must be variable. D. the total revenue function must not be linear. 12. 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. LX > 0 in the dual solution. D. LX < 0 in the dual solution. 13. When the primal LP problem is to maximize revenue subject to various input constraints, the shadow prices of inputs in th > A. equal the marginal revenue product of each input. B. are positive for inputs with excess capacity.
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