ch05 - File Ch05 CHAPTER 5 Production Each question...

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File: Ch05; CHAPTER 5: Production Each question contains a code showing the section of the chapter text from which it was taken. The codes for this chapter are: Code Section 1 Basic Production Concepts 2 Production with One Variable Input 3 Production in the Long Run 4 Measuring Production Functions 5 Other Production Decisions MULTIPLE CHOICE 1. The main task of a production manager is to determine a) Which goods to produce. b) The markets in which to sell finished products. c) When and how to increase production capacity. d) Profitable prices for finished products. e) How to produce a given level of output at minimum total cost. ANSWER: e SECTION: 1 2. For a given combination of inputs, a production function indicates the associated a) Average cost of production. b) Marginal cost of production. c) Maximum output level. d) Minimum cost. e) Profit-maximizing output level. ANSWER: c SECTION: 1 3. When considering efficient production, how many ways are there to make a finished good or service? a) Only one way that is efficient. b) Two ways, but never more than that. c) One way, until technological innovations cause this method to be displaced by a more efficient means. d) Many efficient methods usually exist. e) Uncertain. For a definitive answer, more information is needed. ANSWER: d SECTION: 1 4. The best definition of the short run is the period of time in which a) Management cannot change its decisions. 5-1
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b) The amount of output cannot be varied. c) One or more inputs are fixed d) All inputs can be varied but at a high marginal cost. e) Economic conditions are relatively stable and unchanging. ANSWER: c SECTION: 2 5. In the long run, the firm can change a) All of its inputs. b) Only some of its inputs. c) None of its inputs. Its inputs are fixed in the long run. d) All of its inputs, provided they are changed in the same proportions. e) Uncertain. It depends on the specific industry. ANSWER: a SECTION: 2 6. Marginal product is defined as a) The additional output produced by an additional unit of input, all other factors held constant. b) The additional output produced by a scale increase in all inputs. c) The additional input required to produce one additional unit of output. d) Total output divided by the total units of an input. e) None of the answers above is correct. ANSWER: a SECTION: 2 7. Labor’s marginal product curve at first rises due to a) Increasing specialization of labor. b) Increasing returns to scale. c) Increasing efficiency of capital. d) Increasing profits from additional output produced and sold. e) Declining labor costs. ANSWER: a SECTION: 2 8. If marginal product is zero, then total product is a) At a minimum. b) Necessarily being produced at minimum total cost.
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This note was uploaded on 03/11/2012 for the course ECON 333 taught by Professor Barkley during the Fall '08 term at CSU Fullerton.

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ch05 - File Ch05 CHAPTER 5 Production Each question...

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