tbch06 - CHAPTER 6 Firms and Production MULTIPLE CHOICE...

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CHAPTER 6 Firms and Production MULTIPLE CHOICE Choose the one alternative that best completes the statement or answers the question. 1) Economists typically assume that the owners of firms wish to A) produce efficiently. B) maximize sales revenues. C) maximize profits. D) All of the above. Answer: C Diff: 0 Topic: The Ownership and Management of Firms 2) Which of the following statements best describes a production function? A) the maximum profit generated from given levels of inputs B) the maximum level of output generated from given levels of inputs C) all levels of output that can be generated from given levels of inputs D) all levels of inputs that could produce a given level of output Answer: B Diff: 0 Topic: Production 3) With respect to production, the short run is best defined as a time period A) lasting about six months. B) lasting about two years. C) in which all inputs are fixed. D) in which at least one input is fixed. Answer: D Diff: 0 Topic: Production 4) Joey cuts grass during the summer. He owns one lawn mower. For him, the short run is equal to A) the amount of time it takes to acquire more customers. B) the amount of time it takes to hire an additional employee. C) the amount of time it takes to hire an additional employee and buy another lawn mower. D) the amount of time it takes to mow one lawn. Answer: C Diff: 1 Topic: Production 103
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Chapter 6/Firms and Production 5) Joey cuts grass during the summer. He rents a lawn mower from his dad. Which of the following statements best illustrates the difference between the short run and the long run for Joey? A) Joey's friends say they will help him, but when he calls them, they say they have other things to do. B) When Joey acquires more customers, he responds by working more hours. Next year, he will buy a lawn mower and split the work with his brother. C) Some customers pay Joey immediately; others wait till the following week. D) Joey has had to turn away some customers because he is already too busy. Answer: B Diff: 2 Topic: Production Figure 6.1 6) Figure 6.1 shows the short-run production function for Albert's Pretzels. The marginal productivity of labor A) rises then falls as the amount of labor increases. B) falls then rises as the amount of labor increases. C) is greater than or equal to the average productivity of labor for all amounts of labor. D) is less than or equal to the average productivity of labor for all amounts of labor. Answer: D Diff: 1 Topic: Short-Run Production 7) Figure 6.1 shows the short-run production function for Albert's Pretzels. The marginal productivity of labor for the third worker is A) 6. B) 8. C) 24. D) not known from the information provided. Answer: A Diff: 0 Topic: Short-Run Production 104
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Chapter 6/Firms and Production 8) Figure 6.1 shows the short-run production function for Albert's Pretzels. The marginal productivity of labor equals the average productivity of labor A) for all levels of labor. B) at none of the levels of labor.
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This note was uploaded on 12/21/2011 for the course ECON 214 taught by Professor Bayemichael during the Spring '09 term at HKU.

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tbch06 - CHAPTER 6 Firms and Production MULTIPLE CHOICE...

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