Chapter6_practice

Chapter6_practice - Practice Problems Firms and Production...

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Practice Problems Firms and Production MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) In the long run, all factors of production are A) ±xed. B) rented. C) variable. D) materials. 1) 2) Homer's Donut Shoppe has the production function q = 10L + 20L 2 - 5L 3 . The marginal product of labor is A) MP = 10 + 40L - 15L 2 B) MP = 10 + 20L C) MP = 10L D) MP = 10 + 20L - 5L 2 2) 3) Which of the following statements best summarizes the law of diminishing marginal returns? A) In the short run, the amount of labor a ±rm will hire diminishes as output increases. B) In the short run, as more labor is hired, output diminishes. C) In the short run, as more labor is hired, output increases at a diminishing rate. D) As more labor is hired, the length of time that de±nes the short run diminishes. 3) 4) In the above ±gure, Graph D with Capital on the vertical axis and labor on the horizontal axis implies that A) the capital and labor are perfect
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This note was uploaded on 04/10/2012 for the course ECN 100B taught by Professor Jamesbushnell during the Fall '11 term at UC Davis.

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Chapter6_practice - Practice Problems Firms and Production...

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