Question 1

An isoquant represents levels of capital and labor that

Accepted Answer

An isoquant represents the various combinations of capital and labor that yield the same level of output. Therefore, the correct choice is B. Choices A and C are not necessarily true for isoquants.

Question 2

In the above figure,Graph D with Capital on the vertical axis and Labor on the horizontal axis implies that

Accepted Answer

The graph shows that as more labor is employed, the capital increases at an increasing rate. This means that the marginal product of labor is increasing as more labor is employed.

Question 3

Lectures in microeconomics can be delivered either by an instructor (labor)or a movie (capital)or any combination of both.Each minute of the instructor's time delivers the same amount of information as a minute of the movie.Which graph in the above figure best represents the isoquants for lectures in microeconomics when Capital per day is on the vertical axis and Labor per day is on the horizontal axis?

Accepted Answer

The isoquants for lectures in microeconomics would be straight lines with a negative slope, indicating perfect substitutability between labor and capital, as each delivers the same amount of information per minute.

Question 4

Ed's building company has the following production function q = 20L - L² where q is the number of houses built and L is the quantity of labor Ed employs. a.Derive the MP and AP. b.For what values of L is the MP > 0? For what values of L is the MP diminishing? c.Draw the MP and AP on a graph.

Accepted Answer

The answer of Ed's building company has the following production...

Question 5

The production function for hamburgers can be written as q = 0.1X + 0.1Y,where X is Canadian ground beef and Y is U.S.beef,both measured in pounds.Which graph in the figure best represents the isoquants for the hamburger production when U.S.ground beef is on the vertical axis and Canadian ground beef is on the horizontal axis?

Accepted Answer

In the isoquant map, the slope of the isoquant represents the technical rate of substitution (TRS). As the TRS between Canadian and US beef is unity, the isoquant curve should be a straight line emanating from the origin. Graph C represents this situation where the isoquant curves are straight lines. On the other hand, the isoquant curves in graphs A, B, and D are bowed, indicating that the TRS is changing with the mix of inputs, which violates the assumption of constant TRS. Therefore, the best choice is C.

Question 6

Isoquants that are downward-sloping straight lines imply that the inputs

Accepted Answer

Downward-sloping straight lines on an isoquant graph indicate that the inputs are perfect substitutes, meaning they can be used interchangeably in any proportion without affecting the output level.

Question 7

-At Joey's Lawncutting Service,a lawn mower cannot cut grass without a laborer.A laborer cannot cut grass without a lawn mower.Which graph in the above figure best represents the isoquants for Joey's Lawncutting Service when Capital per day is on the vertical axis and Labor per day is on the horizontal axis?

Accepted Answer

The isoquants are L-shaped because neither capital nor labor can be used alone to cut grass.

Question 8

Suppose the production of paved roadways can be represented as q = L^0.5 + K^0.5.Which of the following statements is (are)TRUE?

Accepted Answer

A) Labor is subject to diminishing marginal productivity in the short run because of the presence of the variable input (labor) in the production function.
B) Labor and capital are imperfect substitutes because they appear as separate variables with different exponents in the production function.
C) The isoquants for paved roadways are convex because of diminishing marginal productivity of labor and capital, which implies that increasing one input while keeping the other constant will result in diminishing additional output. This leads to the bowed-out shape of the isoquants.

Question 9

Blowdryer businessman Max Power is starting a new hairdryer business.Max estimates his production function to be q = KL^0.5.Max has 60 units of capital (K = 60).Derive Max's MP and AP of labor for the current level of capital.

Accepted Answer

The answer of Blowdryer businessman Max Power is starting a...

Question 10

To say that isoquants are convex is to say that

Accepted Answer

Convexity of isoquants means that the marginal rate of technical substitution falls as more of one input is substituted for the other. This implies that the inputs are not perfect substitutes, and therefore, choice B is incorrect. Choice C is also incorrect because the law of diminishing marginal returns applies to both capital and labor. Choice D is also incorrect because convexity of isoquants does not necessarily imply constant returns to scale.

Question 11

Describe the relationship between marginal productivity and average productivity.Use calculus or a graph to support your answer.

Accepted Answer

The answer of Describe the relationship between marginal productivity and...

Question 12

L-shaped isoquants imply that production requires that the inputs

Accepted Answer

L-shaped isoquants imply that the inputs must be used together in a certain proportion, meaning that they are complementary inputs. This is because the isoquant does not slope downward and to the right (indicating perfect substitutes) nor does it have a constant slope (indicating imperfect substitutes). Instead, it has a right-angle shape that suggests that the inputs are used together in a fixed ratio.

Question 13

Consider the following short-run production function: q = 5  
- 1/3  
.At what level of L do diminishing marginal returns begin? At what level of L do diminishing returns begin?

Accepted Answer

The answer of Consider the following short-run production function: q...

Question 14

Which graph in the above figure represents the isoquants where,as the amount of labor used increases and the amount of capital used decreases,the marginal product of labor rises when Capital per day is on the vertical axis and Labor per day is on the horizontal axis?

Accepted Answer

The answer of Which graph in the above figure represents...

Question 15

At Joey's Lawncutting Service,the production function is represented as: q = min(m,l),where q is the quantity of lawns mowed.The inputs are m,the lawn mower,and l,the laborer.Which graph in the above figure best represents the isoquants for Joey's Lawncutting Service when Capital per day is on the vertical axis and Labor per day is on the horizontal axis?

Accepted Answer

The isoquants for Joey's Lawncutting Service are L-shaped, with the vertical segment representing the constraint that the quantity of lawns mowed is limited by the number of laborers, and the horizontal segment representing the constraint that the quantity of lawns mowed is limited by the number of lawn mowers. Graph A is the only graph that shows L-shaped isoquants.

Question 16

Lectures in microeconomics can be delivered either by an instructor (labor)or a movie (capital)or any combination of both.Yet the it gets harder and harder to substitute more movies for an instructor the more movies are already used.Which graph in the above figure best represents the isoquants for lectures in microeconomics when Capital per day is on the vertical axis and Labor per day is on the horizontal axis?

Accepted Answer

The answer of Lectures in microeconomics can be delivered either...

Question 17

A small firm in Indonesia has the following estimated production function: ln(q)= 10 + 2.6ln(L)- 0.4(ln(L))² Derive the firm's marginal and average product of labor as functions of q and L.What is the elasticity of output with respect to labor?

Accepted Answer

The answer of A small firm in Indonesia has the...

Question 18

Isoquants that are downward-sloping straight lines exhibit

Accepted Answer

Isoquants that are downward-sloping straight lines exhibit a constant marginal rate of technical substitution, as the slope of the line (which represents the MRTS) does not change along the isoquant.

Question 19

One way to explain the convexity of isoquants is to say that

Accepted Answer

As labor increases and capital decreases, the marginal product of labor falls (due to decreasing returns to labor) and the marginal product of capital rises (due to increasing returns to capital). Therefore, to maintain a constant level of output, the firm has to increase the amount of capital for every unit of labor it hires, resulting in a convex isoquant.

Question 20

Suppose the production function for T-shirts can be represented as q = L^0.²⁵K^0.⁷⁵.Show that the marginal productivity of labor diminishes in the short run.

Accepted Answer

The answer of Suppose the production function for T-shirts can...

Quiz 6: Firms and Production

An isoquant represents levels of capital and labor that

In the above figure,Graph D with Capital on the vertical axis and Labor on the horizontal axis implies that

Ed's building company has the following production function q = 20L - L² where q is the number of houses built and L is the quantity of labor Ed employs. a.Derive the MP and AP. b.For what values of L is the MP > 0? For what values of L is the MP diminishing? c.Draw the MP and AP on a graph.

Isoquants that are downward-sloping straight lines imply that the inputs

Suppose the production of paved roadways can be represented as q = L^0.5 + K^0.5.Which of the following statements is (are) TRUE?

Blowdryer businessman Max Power is starting a new hairdryer business.Max estimates his production function to be q = KL^0.5.Max has 60 units of capital (K = 60).Derive Max's MP and AP of labor for the current level of capital.

To say that isoquants are convex is to say that

Describe the relationship between marginal productivity and average productivity.Use calculus or a graph to support your answer.

L-shaped isoquants imply that production requires that the inputs

Consider the following short-run production function: q = 5 - 1/3 .At what level of L do diminishing marginal returns begin? At what level of L do diminishing returns begin?

Which graph in the above figure represents the isoquants where,as the amount of labor used increases and the amount of capital used decreases,the marginal product of labor rises when Capital per day is on the vertical axis and Labor per day is on the horizontal axis?

A small firm in Indonesia has the following estimated production function: ln(q)= 10 + 2.6ln(L)- 0.4(ln(L))² Derive the firm's marginal and average product of labor as functions of q and L.What is the elasticity of output with respect to labor?

Isoquants that are downward-sloping straight lines exhibit

One way to explain the convexity of isoquants is to say that

Suppose the production function for T-shirts can be represented as q = L^0.²⁵K^0.⁷⁵.Show that the marginal productivity of labor diminishes in the short run.

Quiz 6: Firms and Production

An isoquant represents levels of capital and labor that

In the above figure,Graph D with Capital on the vertical axis and Labor on the horizontal axis implies that

Ed's building company has the following production function q = 20L - L2 where q is the number of houses built and L is the quantity of labor Ed employs. a.Derive the MP and AP. b.For what values of L is the MP > 0? For what values of L is the MP diminishing? c.Draw the MP and AP on a graph.

Isoquants that are downward-sloping straight lines imply that the inputs

Suppose the production of paved roadways can be represented as q = L0.5 + K0.5.Which of the following statements is (are) TRUE?

Blowdryer businessman Max Power is starting a new hairdryer business.Max estimates his production function to be q = KL0.5.Max has 60 units of capital (K = 60).Derive Max's MP and AP of labor for the current level of capital.

To say that isoquants are convex is to say that

Describe the relationship between marginal productivity and average productivity.Use calculus or a graph to support your answer.

L-shaped isoquants imply that production requires that the inputs

Consider the following short-run production function: q = 5 - 1/3 .At what level of L do diminishing marginal returns begin? At what level of L do diminishing returns begin?

Which graph in the above figure represents the isoquants where,as the amount of labor used increases and the amount of capital used decreases,the marginal product of labor rises when Capital per day is on the vertical axis and Labor per day is on the horizontal axis?

A small firm in Indonesia has the following estimated production function: ln(q)= 10 + 2.6ln(L)- 0.4(ln(L))2 Derive the firm's marginal and average product of labor as functions of q and L.What is the elasticity of output with respect to labor?

Isoquants that are downward-sloping straight lines exhibit

One way to explain the convexity of isoquants is to say that

Suppose the production function for T-shirts can be represented as q = L0.25 K0.75.Show that the marginal productivity of labor diminishes in the short run.

Ed's building company has the following production function q = 20L - L² where q is the number of houses built and L is the quantity of labor Ed employs. a.Derive the MP and AP. b.For what values of L is the MP > 0? For what values of L is the MP diminishing? c.Draw the MP and AP on a graph.

Suppose the production of paved roadways can be represented as q = L^0.5 + K^0.5.Which of the following statements is (are) TRUE?

Blowdryer businessman Max Power is starting a new hairdryer business.Max estimates his production function to be q = KL^0.5.Max has 60 units of capital (K = 60).Derive Max's MP and AP of labor for the current level of capital.

A small firm in Indonesia has the following estimated production function: ln(q)= 10 + 2.6ln(L)- 0.4(ln(L))² Derive the firm's marginal and average product of labor as functions of q and L.What is the elasticity of output with respect to labor?

Suppose the production function for T-shirts can be represented as q = L^0.²⁵K^0.⁷⁵.Show that the marginal productivity of labor diminishes in the short run.