Question 1

short-run production function assumes that
A)the level of output is fixed.
B)at least one input is a fixed input.
C)all inputs are fixed inputs.
D)both a and b
E)both b and c

Accepted Answer

The short-run production function assumes that at least one input is a fixed input while the others are variable inputs. This means that the level of output can still change by varying the variable inputs, but the fixed input(s) limit the maximum output that can be produced in the short run. Therefore, option B is the best choice. Option C is incorrect because it implies that all inputs are fixed which means no output can be produced in the short run. Option A is also incorrect because it assumes that the level of output is fixed, which contradicts the idea of production. Option D and E are partly correct, but B is the best single option.

Question 2

For a short-run production function in which output is determined by the number of workers utilized capital stock held constant),which of the following is FALSE?
A)In general,when there are few workers the marginal product of labor will be increasing.
B)When the marginal product of labor is negative,total product is falling.
C)To determine the marginal product of labor,the capital stock must be held constant.
D)When diminishing returns set in,adding one more worker decreases output.
E)none of the above

Accepted Answer

In the context of diminishing returns, adding one more worker does not decrease output; instead, it means that each additional worker contributes less to output than the previous one. The output may still increase, but at a decreasing rate.

Question 3

In the table above,how much does the third unit of labor ADD to total output?
A)100
B)125
C)150
D)300
E)none of the above

Accepted Answer

E

Question 4

out the table and answer the question below.  Marginal product is negative when _____ units of labor are employed.
A)5 units of labor are employed.
B)6 units of labor are employed.

C)7 units of labor are employed.
D)both b and C

Accepted Answer

According to the table, marginal product starts decreasing from 6 units of labor, and becomes negative at 7 units of labor. Therefore, both option B and C are correct.

Question 5

In the table above,what is the maximum amount of output that can be produced with two workers?
A)50
B)125
C)150
D)250
E)320

Accepted Answer

The answer of  In the table above,what is the...

Question 6

Given the table below,if capital is fixed at one unit,diminishing returns begin with the  Amount of total output produced from various combinations of labor and capital.
A)first unit of labor.
B)second unit of labor.
C)third unit of labor.
D)fourth unit of labor.
E)none of the above

Accepted Answer

Diminishing returns begin with the third unit of labor, as indicated by the table. At this point, the marginal product of labor starts to decrease even though the amount of capital remains fixed at one unit.

Question 7

Fill out the table and answer the question below.  The average product of labor when 4 units of labor are employed is
A)22.
B)20.
C)19.
D)16.

Accepted Answer

To calculate the average product of labor, we use the formula:
Average product of labor = total product / units of labor
From the provided table, we can see that when 4 units of labor are employed, the total product is 76. Therefore, the average product of labor is:
Average product of labor = 76 / 4 = 19
So, the best choice is C.

Question 8

In the table above,what is the average product of four units of labor?
A)20
B)60
C)80
D)100
E)350

Accepted Answer

To find the average product of labor, we need to divide total product by the number of units of labor. In this table, the total product for 4 units of labor is 320, so the average product is 320/4 = 80. Therefore, the correct answer is choice C.

Question 9

Given the table below,if labor is fixed at three units,how much does the third unit of capital add to total output?  Amount of total output produced from various combinations of labor and capital.
A)60
B)80
C)110
D)130
E)none of the above

Accepted Answer

The answer of Given the table below,if labor is fixed...

Question 10

Suppose you run a pizza shop and currently have two employees.If you hire a third employee,your output of pizzas per day rises from 55 to 65.If you hire a fourth employee,output rises to 80 per day.A fifth and sixth employee would cause output to rise to 90 and 95 per day,respectively.Pick the correct statement:
A)Diminishing returns set in with the hiring of the fourth worker.
B)Diminishing returns set in with the hiring of the fifth worker.
C)Diminishing returns set in with the hiring of the sixth worker.
D)Diminishing returns set have not yet set in because output is still increases.

Accepted Answer

Diminishing returns set in with the hiring of the fifth worker because the marginal product of adding the fifth employee is only 10 (output increases from 80 to 90), while the marginal product of adding the fourth employee was 15 (output increases from 65 to 80). This means that adding the fifth employee is not as productive as adding the fourth employee, indicating that diminishing returns have set in. The marginal product of adding the sixth employee is even lower (output only increases by 5), further confirming that diminishing returns have already set in.

Question 11

out the table and answer the question below.  Diminishing returns begin with the
A)first unit of labor.
B)third unit of labor.
C)fourth unit of labor.
D)sixth unit of labor.

Accepted Answer

The answer of out the table and answer the question...

Question 12

If average product is increasing,then marginal product
A)must be greater than average product.
B)must be less than average product.
C)must be increasing.
D)cannot be decreasing.
E)both a and c

Accepted Answer

If average product is increasing, it implies that the marginal product of each additional unit of input must be greater than the average product of all the inputs used.

This is because the average product is calculated by dividing the total output by the total input, and if the average product is increasing, it means that each additional unit of input is contributing more to the total output than the previous units.

Therefore, the marginal product must be greater than the average product in order to cause an increase in the average product.

Question 13

Suppose that you run a house-painting company and currently have 2 workers painting a total of 4 houses per month.If you hire a third worker,6 houses can be painted per month.If you hire a fourth worker,9 houses can be painted,and a fifth and sixth worker will increase the number of houses painted to 13 and 15,respectively.Diminishing returns
A)set in when the fourth worker is hired.
B)set in when the fifth worker is hired.
C)set in when the sixth worker is hired.
D)have not yet set in because output is still increasing.

Accepted Answer

The answer of Suppose that you run a house-painting company...

Question 14

out the table and answer the question below.  The marginal product of the fifth unit of labor is
A)16.
B)10.
C)4.
D)-2.

Accepted Answer

The answer of out the table and answer the question...

Question 15

Given the table below,if capital is fixed at two units,what is the marginal product of the fourth unit of labor?  Amount of total output produced from various combinations of labor and capital.
A)60
B)80
C)100
D)420
E)none of the above

Accepted Answer

The answer of Given the table below,if capital is fixed...

Question 16

In the table above,diminishing returns
A)begin with the first unit of labor.
B)begin with the third unit of labor.
C)begin with the fourth unit of labor.
D)begin with the fifth unit of labor.
E)do not occur because output is positive for all levels of labor usage.

Accepted Answer

The answer of  In the table above,diminishing returns
A)begin with...

Question 17

If labor is fixed at 5 units,how much does the second unit of capital add to total output?  Amount of total output produced from various combinations of labor and capital.
A)490
B)390
C)50
D)100
E)none of the above

Accepted Answer

In order to determine the marginal product of capital (the additional output produced by adding one more unit of capital), we need to compare the total output produced with and without the additional unit of capital.

Using the chart provided, we can see that when labor is fixed at 5 units, the total output with 1 unit of capital is 500 and the total output with 2 units of capital is 600. Therefore, the second unit of capital adds 100 units of total output (600-500=100).

Question 18

production function measures the relation between
A)input prices and output prices.
B)the quantity of inputs and the quantity of output.
C)input prices and the quantity of output.
D)the quantity of inputs and input prices.
E)none of the above

Accepted Answer

Production function measures the relation between the quantity of inputs and the quantity of output, as it shows the maximum amount of output that can be produced with a given set of inputs. The other choices do not reflect the true meaning of production function.

Question 19

In the table above,what is the marginal product of the fifth unit of labor?
A)20
B)50
C)80
D)-10
E)-30

Accepted Answer

The answer of  In the table above,what is the...

Question 20

Which of the following statements is FALSE?
A)A firm plans in the long run and operates in the short run.
B)In the short run,a firm can change some but not all of its inputs.
C)In the long run all inputs are variable.
D)In the short run all inputs are fixed.

Accepted Answer

In the short run, some inputs may be fixed while others are variable, but not all inputs are fixed. The statement in option D that "in the short run all inputs are fixed" is false.

Quiz 8: Production and Cost in the Short Run

short-run production function assumes that

For a short-run production function in which output is determined by the number of workers utilized capital stock held constant) ,which of the following is FALSE?

In the table above,how much does the third unit of labor ADD to total output?

out the table and answer the question below. Marginal product is negative when _____ units of labor are employed.

In the table above,what is the maximum amount of output that can be produced with two workers?

Given the table below,if capital is fixed at one unit,diminishing returns begin with the Amount of total output produced from various combinations of labor and capital.

Fill out the table and answer the question below. The average product of labor when 4 units of labor are employed is

In the table above,what is the average product of four units of labor?

Given the table below,if labor is fixed at three units,how much does the third unit of capital add to total output? Amount of total output produced from various combinations of labor and capital.

out the table and answer the question below. Diminishing returns begin with the

If average product is increasing,then marginal product

out the table and answer the question below. The marginal product of the fifth unit of labor is

Given the table below,if capital is fixed at two units,what is the marginal product of the fourth unit of labor? Amount of total output produced from various combinations of labor and capital.

In the table above,diminishing returns

If labor is fixed at 5 units,how much does the second unit of capital add to total output? Amount of total output produced from various combinations of labor and capital.

production function measures the relation between

In the table above,what is the marginal product of the fifth unit of labor?

Which of the following statements is FALSE?