Question 1

Between 1994 and 2008, the share of the workforce employed in manufacturing _____ and manufacturing output _____.

Accepted Answer

Between 1994 and 2008, the share of the workforce employed in manufacturing decreased due to automation and offshoring. However, manufacturing output increased due to improvements in productivity and technology.

Question 2

Use the following to answer question:
Table 6.5 
-(Table 6.5) The short-run production situation for a firm is listed on this table. Complete the table.

Accepted Answer

The answer of Use the following to answer question:
Table 6.5...

Question 3

The production function for laser eye surgery is given by Q = 20K^0.5L^0.5, where Q is the number of laser eye surgeries performed per day, K is the number of eye surgery machines (which is fixed at 2 in the short run), and L is the number of employees.

Accepted Answer

The answer of The production function for laser eye surgery...

Question 4

Consider the production function Q = Af(K, L). Which of the following statements is (are) TRUE?

Accepted Answer

I. This statement is false. The production function can take on various forms and is not limited to Cobb-Douglas.
II. This statement is true. A represents the level of technology in the production function and is held constant in the short run. In the long run, A can be changed through technological advancements.
III. This statement is also true. K and L represent the inputs of capital and labor, respectively, in the production function. While they are assumed to be fixed in the short run, they can be adjusted in the long run.

Question 5

Suppose the firm's production function is Q = 2KL, where Q is units of output, K is units of capital (which are fixed at 2), and L is units of labor.

Accepted Answer

The answer of Suppose the firm's production function is Q...

Question 6

Suppose a firm with a production function given by Q = 4K^0.25L^0.75produces 100 units of output. The firm pays a wage of $30 per units and pays a rental rate of capital of $10 per unit. (Note: ). The minimum cost of producing 100 units of output is:

Accepted Answer

The answer of Suppose a firm with a production function...

Question 7

Use the following to answer question: Figure 6.14 -(Figure 6.14) Refer to the production function, which has a slope of 1/L^0.5.

Accepted Answer

The answer of Use the following to answer question:
Figure 6.14...

Question 8

Use the following to answer question:
Figure 6.11 
-(Figure 6.11) Which of the following statements is (are) TRUE?

Accepted Answer

The answer of Use the following to answer question:
Figure 6.11...

Question 9

Suppose a firm with a production function given by Q = 30K^0.5L^0.5 produces 1,500 units of output. The firm pays a wage of $40 per unit and pays a rental rate of capital of $640 per unit. How many units of labor and capital should the firm employ to minimize the cost of producing 1,500 units of output? (Note: )

Accepted Answer

The answer of Suppose a firm with a production function...

Question 10

Here is a copy of your friend's class notes on the nine basic assumptions of producer behavior:  Because your friend was half-asleep during class, she may have errors in her notes. Correct the errors in her notes where necessary.

Accepted Answer

The answer of Here is a copy of your friend's...

Question 11

Suppose a firm is currently minimizing costs in the long run with marginal product of labor and marginal product of capital given by K and L, respectively. If the price of capital falls by 50%, the capital-to-labor ratio will:

Accepted Answer

In the long run, the firm will choose the capital-to-labor ratio such that the marginal product per dollar spent on labor is equal to the marginal product per dollar spent on capital. That is:

MP_L / W = MP_K / R

where W is the wage rate, R is the rental rate on capital, MP_L is the marginal product of labor, and MP_K is the marginal product of capital.

If the price of capital falls by 50%, then R is also reduced by 50% (assuming no other changes in factor prices). This implies that the ratio of MP_L to MP_K has to double to maintain the equality in the above equation. Therefore, the capital-to-labor ratio will double.

Question 12

The production function given by Q = 10(0.7K²+ 0.3L²)^0.5 has _____ returns to scale.

Accepted Answer

The production function is homogeneous of degree 1, as the sum of the exponents of K and L in the production function is 1 (0.5 from K and 0.5 from L), indicating constant returns to scale.

Question 13

Use the following to answer question:
Figure 6.12 
-(Figure 6.12) A technological change is represented by the movement from point _____ to point _____.

Accepted Answer

The technological change is represented by the movement from point X to point Z because the production possibilities curve shifts outward, allowing for more production of both goods.

Question 14

The short-run production function for sea kayaks is given by Q = 30L^0.5, where Q is the number of sea kayaks produced and L is the number of employees. Complete the table and draw the corresponding graphs. Round all answers to two decimal points.

Accepted Answer

The answer of The short-run production function for sea kayaks...

Question 15

Suppose a firm with a production function given by Q = K^0.25L^0.75 produces 1,500 units of output. The firm pays a wage of $50 per unit and pays a rental rate of capital of $50 per unit. (Note: ). To minimize the cost of producing 1,500 units of output, the firm should use:

Accepted Answer

The answer of Suppose a firm with a production function...

Question 16

Define a production function and give an example of a Cobb-Douglas production function with constant returns to scale.

Accepted Answer

The answer of Define a production function and give an...

Question 17

Use the following to answer question:
Figure 6.10 
-(Figure 6.10) Which of the following statements is (are) TRUE?

Accepted Answer

The answer of Use the following to answer question:
Figure 6.10...

Question 18

Which of the following production functions exhibit(s) constant returns to scale?

Accepted Answer

The answer of Which of the following production functions exhibit(s)...

Question 19

Suppose a firm is producing 2,475 units of output by hiring 50 workers (W = $20 per hour) and 25 units of capital (R = $10 per hour). The marginal product of labor and marginal product of capital are 40 and 25, respectively. Is the firm minimizing the cost of producing 2,475 units of output?

Accepted Answer

To minimize costs while producing a certain output, a firm should equate the ratio of the marginal product of labor (MPL) to the wage (W) with the ratio of the marginal product of capital (MPK) to the rental rate of capital (R). Here, MPL/W = 40/20 = 2 and MPK/R = 25/10 = 2.5. Since the MPK/R is higher, the firm should use more capital and less labor to minimize costs, as it gets more output per dollar spent on capital than on labor.

Question 20

Answer the following questions.

Accepted Answer

The answer of Answer the following questions. ...

Quiz 6: Producer Behavior

Between 1994 and 2008, the share of the workforce employed in manufacturing _ and manufacturing output _.

Use the following to answer question: Table 6.5 -(Table 6.5) The short-run production situation for a firm is listed on this table. Complete the table.

The production function for laser eye surgery is given by Q = 20K^0.5L^0.5, where Q is the number of laser eye surgeries performed per day, K is the number of eye surgery machines (which is fixed at 2 in the short run), and L is the number of employees.

Consider the production function Q = Af(K, L) . Which of the following statements is (are) TRUE?

Suppose the firm's production function is Q = 2KL, where Q is units of output, K is units of capital (which are fixed at 2), and L is units of labor.

Suppose a firm with a production function given by Q = 4K^0.25L^0.75produces 100 units of output. The firm pays a wage of $30 per units and pays a rental rate of capital of $10 per unit. (Note: ) . The minimum cost of producing 100 units of output is:

Use the following to answer question: Figure 6.14 -(Figure 6.14) Refer to the production function, which has a slope of 1/L^0.5.

Use the following to answer question: Figure 6.11 -(Figure 6.11) Which of the following statements is (are) TRUE?

Here is a copy of your friend's class notes on the nine basic assumptions of producer behavior: Because your friend was half-asleep during class, she may have errors in her notes. Correct the errors in her notes where necessary.

Suppose a firm is currently minimizing costs in the long run with marginal product of labor and marginal product of capital given by K and L, respectively. If the price of capital falls by 50%, the capital-to-labor ratio will:

The production function given by Q = 10(0.7K²+ 0.3L²) ^0.5 has _____ returns to scale.

Use the following to answer question: Figure 6.12 -(Figure 6.12) A technological change is represented by the movement from point _ to point _.

The short-run production function for sea kayaks is given by Q = 30L^0.5, where Q is the number of sea kayaks produced and L is the number of employees. Complete the table and draw the corresponding graphs. Round all answers to two decimal points.

Suppose a firm with a production function given by Q = K^0.25L^0.75 produces 1,500 units of output. The firm pays a wage of $50 per unit and pays a rental rate of capital of $50 per unit. (Note: ) . To minimize the cost of producing 1,500 units of output, the firm should use:

Define a production function and give an example of a Cobb-Douglas production function with constant returns to scale.

Use the following to answer question: Figure 6.10 -(Figure 6.10) Which of the following statements is (are) TRUE?

Which of the following production functions exhibit(s) constant returns to scale?

Suppose a firm is producing 2,475 units of output by hiring 50 workers (W = $20 per hour) and 25 units of capital (R = $10 per hour) . The marginal product of labor and marginal product of capital are 40 and 25, respectively. Is the firm minimizing the cost of producing 2,475 units of output?

Answer the following questions.

Quiz 6: Producer Behavior

Between 1994 and 2008, the share of the workforce employed in manufacturing _____ and manufacturing output _____.

Use the following to answer question: Table 6.5 -(Table 6.5) The short-run production situation for a firm is listed on this table. Complete the table.

The production function for laser eye surgery is given by Q = 20K0.5L0.5, where Q is the number of laser eye surgeries performed per day, K is the number of eye surgery machines (which is fixed at 2 in the short run), and L is the number of employees.

Consider the production function Q = Af(K, L) . Which of the following statements is (are) TRUE?

Suppose the firm's production function is Q = 2KL, where Q is units of output, K is units of capital (which are fixed at 2), and L is units of labor.

Suppose a firm with a production function given by Q = 4K0.25L0.75 produces 100 units of output. The firm pays a wage of $30 per units and pays a rental rate of capital of $10 per unit. (Note: ) . The minimum cost of producing 100 units of output is:

Use the following to answer question: Figure 6.14 -(Figure 6.14) Refer to the production function, which has a slope of 1/L0.5.

Use the following to answer question: Figure 6.11 -(Figure 6.11) Which of the following statements is (are) TRUE?

Here is a copy of your friend's class notes on the nine basic assumptions of producer behavior: Because your friend was half-asleep during class, she may have errors in her notes. Correct the errors in her notes where necessary.

Suppose a firm is currently minimizing costs in the long run with marginal product of labor and marginal product of capital given by K and L, respectively. If the price of capital falls by 50%, the capital-to-labor ratio will:

The production function given by Q = 10(0.7K2 + 0.3L2) 0.5 has _____ returns to scale.

Use the following to answer question: Figure 6.12 -(Figure 6.12) A technological change is represented by the movement from point _____ to point _____.

The short-run production function for sea kayaks is given by Q = 30L0.5, where Q is the number of sea kayaks produced and L is the number of employees. Complete the table and draw the corresponding graphs. Round all answers to two decimal points.

Suppose a firm with a production function given by Q = K0.25L0.75 produces 1,500 units of output. The firm pays a wage of $50 per unit and pays a rental rate of capital of $50 per unit. (Note: ) . To minimize the cost of producing 1,500 units of output, the firm should use:

Define a production function and give an example of a Cobb-Douglas production function with constant returns to scale.

Use the following to answer question: Figure 6.10 -(Figure 6.10) Which of the following statements is (are) TRUE?

Which of the following production functions exhibit(s) constant returns to scale?

Suppose a firm is producing 2,475 units of output by hiring 50 workers (W = $20 per hour) and 25 units of capital (R = $10 per hour) . The marginal product of labor and marginal product of capital are 40 and 25, respectively. Is the firm minimizing the cost of producing 2,475 units of output?

Answer the following questions.

Between 1994 and 2008, the share of the workforce employed in manufacturing _ and manufacturing output _.

The production function for laser eye surgery is given by Q = 20K^0.5L^0.5, where Q is the number of laser eye surgeries performed per day, K is the number of eye surgery machines (which is fixed at 2 in the short run), and L is the number of employees.

Suppose a firm with a production function given by Q = 4K^0.25L^0.75produces 100 units of output. The firm pays a wage of $30 per units and pays a rental rate of capital of $10 per unit. (Note: ) . The minimum cost of producing 100 units of output is:

Use the following to answer question: Figure 6.14 -(Figure 6.14) Refer to the production function, which has a slope of 1/L^0.5.

The production function given by Q = 10(0.7K²+ 0.3L²) ^0.5 has _____ returns to scale.

Use the following to answer question: Figure 6.12 -(Figure 6.12) A technological change is represented by the movement from point _ to point _.

The short-run production function for sea kayaks is given by Q = 30L^0.5, where Q is the number of sea kayaks produced and L is the number of employees. Complete the table and draw the corresponding graphs. Round all answers to two decimal points.

Suppose a firm with a production function given by Q = K^0.25L^0.75 produces 1,500 units of output. The firm pays a wage of $50 per unit and pays a rental rate of capital of $50 per unit. (Note: ) . To minimize the cost of producing 1,500 units of output, the firm should use: