Question 1

Figure 13-1 
-Refer to Figure 13-1.Suppose the production function shifts from TP1 to TP2.Such a shift in the total product curve is most likely due to an increase in the firm's
A) costs of production.
B) productivity.
C) product price.
D) market share.

Accepted Answer

A shift from TP1 to TP2 represents an increase in output (total product) for a given amount of inputs (labor), which is indicative of an increase in productivity.

Question 2

Figure 13-1 
-Refer to Figure 13-1.Suppose the production function shifts from TP2 to TP1.Such a shift in the total product curve is most likely due to a decrease in the firm's
A) costs of production.
B) product price.
C) market share.
D) productivity.

Accepted Answer

A shift from TP2 to TP1 indicates a decrease in total output for a given level of input. This suggests a decrease in productivity, as the same amount of inputs is now producing less output. A decrease in costs of production would likely shift the total product curve in the opposite direction, towards TP3. A decrease in product price or market share would not directly affect the total product curve.

Question 3

The marginal product of an input in the production process is the increase in
A) total revenue obtained from an additional unit of that input
B) profit obtained from an additional unit of that input.
C) total revenue obtained from an additional unit of that input.
D) quantity of output obtained from an additional unit of that input.

Accepted Answer

The marginal product of an input is the increase in quantity of output obtained from an additional unit of that input. It measures the contribution of that input to the total output. Option A is incorrect because total revenue is not solely dependent on an additional unit of an input, but also on the price and quantity sold. Option B is incorrect because profit also depends on the cost of inputs and other expenses. Option C is incorrect as it does not take into account the cost of the input and the price of the output.

Question 4

Figure 13-1 
-Refer to Figure 13-1.Which of the following could explain why the total product curve would shift from TP2 to TP1?
A) There is additional capital equipment available to the firm.
B) Labor skills have become rusty and outdated in the firm.
C) The firm has developed improved production technology.
D) The firm is now receiving a higher price for its product.

Accepted Answer

The answer of Figure 13-1 
-Refer to Figure 13-1.Which of...

Question 5

Let L represent the number of workers hired by a firm,and let Q represent that firm's quantity of output.Assume two points on the firm's production function are (L = 12,Q = 122)and (L = 13,Q = 132).Then the marginal product of the 13th worker is
A) 8 units of output.
B) 10 units of output.
C) 122 units of output.
D) 132 units of output.

Accepted Answer

The marginal product of the 13th worker is the change in output from hiring the 13th worker. From the two points given, we can see that the change in output from hiring the 12th worker to hiring the 13th worker is (132-122) = 10 units of output. Therefore, the marginal product of the 13th worker is 10 units of output.

Question 6

For a firm,the production function represents the relationship between
A) implicit costs and explicit costs.
B) quantity of inputs and total cost.
C) quantity of inputs and quantity of output.
D) quantity of output and total cost.

Accepted Answer

The production function shows the relationship between the quantity of inputs (such as labor and capital) a firm uses and the quantity of output it produces. Therefore, choice C is the correct answer. Option A is incorrect because the production function does not directly involve costs, explicit or implicit. Option B is incorrect because while inputs do affect total costs, the production function specifically relates inputs to output. Option D is incorrect because the production function does not directly involve total costs; it only shows the relationship between inputs and output.

Question 7

When a firm's only variable input is labor,then the slope of the production function measures the
A) quantity of labor.
B) quantity of output.
C) total cost.
D) marginal product of labor.

Accepted Answer

When a firm's only variable input is labor, the slope of the production function measures the marginal product of labor. Marginal product of labor refers to the additional output that can be produced by employing one more unit of labor, while holding all other inputs constant. As such, it reflects the efficiency with which labor is being used and is an important consideration for firms looking to optimize their production processes.

Question 8

Let L represent the number of workers hired by a firm,and let Q represent that firm's quantity of output.Assume two points on the firm's production function are (L=6,Q=147)and (L=7,Q=174).The marginal product of the seventh worker is
A) 25 units of output.
B) 27 units of output.
C) 37 units of output.
D) 174 units of output.

Accepted Answer

The marginal product of labor (MPL) is the additional output produced when one more unit of labor is hired while holding all other inputs constant.

Using the two points given, we can calculate the change in output (ΔQ) and change in labor (ΔL) from the sixth worker to the seventh worker:

ΔQ = 174 - 147 = 27
ΔL = 7 - 6 = 1

Therefore, the marginal product of the seventh worker (MPL7) is:

MPL7 = ΔQ/ΔL = 27/1 = 27 units of output.

So the answer is B) 27 units of output.

Question 9

The marginal product of labor can be defined as the change in
A) profit divided by the change in labor.
B) output divided by the change in labor.
C) labor divided by the change in output.
D) labor divided by the change in total cost.

Accepted Answer

The marginal product of labor is the additional amount of output that can be produced by adding one more unit of labor, holding all other inputs constant. Therefore, it is defined as the change in output divided by the change in labor.

Question 10

For a firm,the relationship between the quantity of inputs and quantity of output is called the
A) profit function.
B) production function.
C) total-cost function.
D) quantity function.

Accepted Answer

The production function describes the relationship between inputs (such as labor and capital) and output. It shows the maximum quantity of output that a firm can produce for every combination of inputs. The other options (profit function, total-cost function, and quantity function) do not specifically describe this relationship between inputs and output.

Question 11

Let L represent the number of workers hired by a firm,and let Q represent that firm's quantity of output.Assume two points on the firm's production function are (L = 5,Q = 125)and (L = 6,Q = 162).Then the marginal product of the 6th worker is
A) 25 units of output.
B) 27 units of output.
C) 37 units of output.
D) 162 units of output.

Accepted Answer

The answer of Let L represent the number of workers...

Question 12

Grace is a self-employed artist.She can make 20 pieces of pottery per week.She is considering hiring her sister Kate to work for her.Both she and Kate can make 35 pieces of pottery per week.What is Kate's marginal product?
A) 55 pieces of pottery
B) 35 pieces of pottery
C) 22.5 pieces of pottery
D) 15 pieces of pottery

Accepted Answer

The answer of Grace is a self-employed artist.She can make...

Question 13

Eldin is a house painter.He can paint three houses per week.He is considering hiring his friend Murphy.Together,Eldin and Murphy can paint five houses per week.What is Murphy's marginal product?
A) 2 houses
B) 3 houses
C) 5 houses
D) 8 houses

Accepted Answer

The answer of Eldin is a house painter.He can paint...

Question 14

If a firm uses labor to produce output,the firm's production function depicts the relationship between
A) the number of workers and the quantity of output.
B) marginal product and marginal cost.
C) the maximum quantity that the firm can produce as it adds more capital to a fixed quantity of labor.
D) fixed inputs and variable inputs in the short run.

Accepted Answer

A production function shows the relationship between the inputs used in production and the output produced. In the case of labor, the production function would depict the relationship between the number of workers (input) and the quantity of output (output).

Question 15

Suppose a firm currently produces 225 units of output per day with 15 workers.The firm is able to produce 235 units of output with a 16th worker.What is the marginal product of the 16th worker?
A) 10 units of output
B) 15 units of output
C) 16 units of output
D) 25 units of output

Accepted Answer

The answer of Suppose a firm currently produces 225 units...

Question 16

The marginal product of any input is the
A) increase in total cost associated with a one-unit increase in production.
B) change in total output associated with a $1.00 increase in total cost.
C) increase in total cost resulting from the hiring of an additional worker.
D) increase in total output obtained from one additional unit of that input.

Accepted Answer

The definition of marginal product is the increase in total output obtained from one additional unit of that input. Therefore, the best choice is D. Choices A, B, and C are not accurate definitions of marginal product.

Question 17

The marginal product of labor is equal to the
A) incremental cost associated with a one unit increase in labor.
B) incremental profit associated with a one unit increase in labor.
C) increase in labor necessary to generate a one unit increase in output.
D) increase in output obtained from a one unit increase in labor.

Accepted Answer

The marginal product of labor refers to the additional output that is generated from a one unit increase in labor. Therefore, the best choice is D, which states that the marginal product of labor is equal to the increase in output obtained from a one unit increase in labor. A is incorrect because it refers to incremental cost, while B refers to incremental profit, both of which are not directly related to the marginal product of labor. C is also incorrect because it refers to the increase in labor necessary to generate a one unit increase in output, which is the inverse of the marginal product of labor.

Question 18

Suppose a certain firm is able to produce 165 units of output per day when 15 workers are hired.The firm is able to produce 176 units of output per day when 16 workers are hired,holding other inputs fixed.The marginal product of the 16th worker is
A) 10 units of output.
B) 11 units of output.
C) 16 units of output.
D) 176 units of output.

Accepted Answer

The marginal product of labor refers to the additional output produced by hiring one more worker while holding all other inputs constant. Therefore, we can find the marginal product of the 16th worker as the difference between the total output produced with 16 workers and the total output produced with 15 workers, or:

Marginal product of 16th worker = Total output with 16 workers - Total output with 15 workers
= 176 - 165
= 11 units of output

Therefore, the answer is B) 11 units of output.

Question 19

Grace is a self-employed artist.She can make 20 pieces of pottery per week.She is considering hiring her sister Kate to work for her.Kate can make 18 pieces of pottery per week.What would be the total output of Grace's firm if she hired her sister?
A) 18 pieces of pottery
B) 19 pieces of pottery
C) 20 pieces of pottery
D) 38 pieces of pottery

Accepted Answer

If Grace hires her sister Kate, the total output of the firm will be the sum of their outputs, which is 20+18=38 pieces of pottery per week.

Question 20

Figure 13-1 
-Refer to Figure 13-1.Which of the following could explain why the total product curve would shift from TP1 to TP2?
A) There is less capital equipment available to the firm.
B) Labor skills have become rusty and outdated in the firm.
C) The firm has developed improved production technology.
D) The firm is now receiving a higher price for its product.

Accepted Answer

The shift from TP1 to TP2 indicates an increase in total output at each level of input. This could be due to the firm developing improved production technology which allows for more efficient use of inputs to produce a greater output.

Quiz 13: The Costs of Production

Figure 13-1 -Refer to Figure 13-1.Suppose the production function shifts from TP1 to TP2.Such a shift in the total product curve is most likely due to an increase in the firm's

Figure 13-1 -Refer to Figure 13-1.Suppose the production function shifts from TP2 to TP1.Such a shift in the total product curve is most likely due to a decrease in the firm's

The marginal product of an input in the production process is the increase in

Figure 13-1 -Refer to Figure 13-1.Which of the following could explain why the total product curve would shift from TP2 to TP1?

Let L represent the number of workers hired by a firm,and let Q represent that firm's quantity of output.Assume two points on the firm's production function are (L = 12,Q = 122) and (L = 13,Q = 132) .Then the marginal product of the 13th worker is

For a firm,the production function represents the relationship between

When a firm's only variable input is labor,then the slope of the production function measures the

Let L represent the number of workers hired by a firm,and let Q represent that firm's quantity of output.Assume two points on the firm's production function are (L=6,Q=147) and (L=7,Q=174) .The marginal product of the seventh worker is

The marginal product of labor can be defined as the change in

For a firm,the relationship between the quantity of inputs and quantity of output is called the

Let L represent the number of workers hired by a firm,and let Q represent that firm's quantity of output.Assume two points on the firm's production function are (L = 5,Q = 125) and (L = 6,Q = 162) .Then the marginal product of the 6th worker is

Grace is a self-employed artist.She can make 20 pieces of pottery per week.She is considering hiring her sister Kate to work for her.Both she and Kate can make 35 pieces of pottery per week.What is Kate's marginal product?

Eldin is a house painter.He can paint three houses per week.He is considering hiring his friend Murphy.Together,Eldin and Murphy can paint five houses per week.What is Murphy's marginal product?

If a firm uses labor to produce output,the firm's production function depicts the relationship between

Suppose a firm currently produces 225 units of output per day with 15 workers.The firm is able to produce 235 units of output with a 16th worker.What is the marginal product of the 16th worker?

The marginal product of any input is the

The marginal product of labor is equal to the

Suppose a certain firm is able to produce 165 units of output per day when 15 workers are hired.The firm is able to produce 176 units of output per day when 16 workers are hired,holding other inputs fixed.The marginal product of the 16th worker is

Grace is a self-employed artist.She can make 20 pieces of pottery per week.She is considering hiring her sister Kate to work for her.Kate can make 18 pieces of pottery per week.What would be the total output of Grace's firm if she hired her sister?

Figure 13-1 -Refer to Figure 13-1.Which of the following could explain why the total product curve would shift from TP1 to TP2?