Question 1

(Figure: Capital and Labor XI) Which of the following statements is (are) TRUE? I. If labor is cheaper than capital, the firm will produce at point B. II) If capital is more expensive than labor, the firm will produce at point A. III) At point A, the MRTS_LK = W/R.

Accepted Answer

The answer of (Figure: Capital and Labor XI) Which of...

Question 2

(Table: Short-run Production I) The short-run production situation for a firm is listed on this table.  The marginal product of labor of the second unit of labor is ____.

Accepted Answer

The answer of (Table: Short-run Production I) The short-run production...

Question 3

(Figure: Capital and Labor VIII) The movement in the isocost line is caused by a(n):

Accepted Answer

The answer of (Figure: Capital and Labor VIII) The movement...

Question 4

(Table: Short-run Production I) The short-run production situation for a firm is listed on this table.  The average product of labor with one unit of labor is ____.

Accepted Answer

The answer of (Table: Short-run Production I) The short-run production...

Question 5

(Figure: Capital and Labor XVI) Consider the production function Q = L^0.5K^0.5, with MP_K = L^0.5/K^0.5 and MP_L = K^0.5/L^0.5. When K = 5 and L = 10, the marginal rate of technical substitution is ____.

Accepted Answer

The answer of (Figure: Capital and Labor XVI) Consider the...

Question 6

(Figure: Production Function I) The average product at L = 2 and L = 8, respectively, are:

Accepted Answer

The answer of (Figure: Production Function I) The average product...

Question 7

(Table: Short-run Production I) The short-run production situation for a firm is listed on this table.  The average product of labor when there are three units of labor is ____.

Accepted Answer

The answer of (Table: Short-run Production I) The short-run production...

Question 8

In the long run, because firms can adjust both capital and labor:

Accepted Answer

In the long run, firms can adjust all inputs, including both capital and labor, allowing them to optimize production processes. This flexibility reduces the impact of diminishing marginal returns, which primarily affects the short run when at least one input (typically capital) is fixed.

Question 9

Suppose the firm's production function is Q = K^1/3L^2/3, where the MPK = and MP_L = ) If the rental rate of capital R is $35 and the wage rate W is $70, how many units of labor and capital should the firm use to produce 12 units of output?

Accepted Answer

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

Question 10

(Figure: Capital and Labor XVI) Consider the production function Q = L^0.5K^0.5, with MP_K = L^0.5/K^0.5 and MP_L = K^0.5/L^0.5. The slope of the isoquant at Point B is ____.

Accepted Answer

The answer of (Figure: Capital and Labor XVI) Consider the...

Question 11

Suppose that a farmer grows corn. The farmer's production function is Q(K,L) = 5K^0.4L^0.6, where K is the number of harvesters and L is the number of farmworker labor hours. The prevailing wage rate is $8 per hour and the rental rate associated with harvesters is $75. The farmer has a goal of delivering 100,000 bushels of corn to market. What Lagrangian equation can be used to solve the farmer's cost minimization problem?

Accepted Answer

The answer of Suppose that a farmer grows corn. The...

Question 12

In the short run, the marginal product of labor:

Accepted Answer

The marginal product of labor refers to the additional output produced by adding one more unit of labor, holding all other inputs constant. In the short run, as more units of labor are added, the marginal product of labor will eventually fall due to the law of diminishing marginal returns. This law states that, holding all else constant, as more of one input (labor, in this case) is added to a fixed amount of other inputs (like capital), the additions to output will eventually decrease.

Question 13

Suppose the production function for a coffee shop is:
Q = 2K + 5L
Where Q is the number of cups of coffee produced, K is the number of coffee makers, and L is the number of workers. The function for the marginal product of capital is ____.

Accepted Answer

The marginal product of capital (MPK) is the additional output produced by using one more unit of capital, holding other factors constant. In the given production function Q = 2K + 5L, the coefficient of K (capital) is 2, which represents the MPK. This means that for each additional coffee maker, the output (cups of coffee) increases by 2 units.

Question 14

If a firm is using a lot of capital and just a little labor, the marginal product of labor is_____ relative to the marginal product of capital making it _____ to substitute labor for capital.

Accepted Answer

When a firm uses a lot of capital and just a little labor, the marginal product of labor is high because adding an additional unit of labor can significantly increase output when labor is scarce. This makes it easier to substitute labor for capital, as the high marginal product of labor means that a small increase in labor can replace a larger amount of capital while maintaining the same level of output.

Question 15

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. The average product of labor for L = 9 is ____.

Accepted Answer

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

Question 16

For the production function Q(K,L) = 3K + 2L, the marginal product of labor is:

Accepted Answer

The marginal product of labor (MPL) is the additional output produced by adding one more unit of labor, holding other factors constant. In the given production function Q(K,L) = 3K + 2L, the MPL is the partial derivative of Q with respect to L, which is 2.

Question 17

(Figure: Capital and Labor IX) The movement in the isocost line is caused by a(n):

Accepted Answer

The answer of (Figure: Capital and Labor IX) The movement...

Question 18

Suppose that a firm's production function is  . The marginal rate of technical substitution is ____.

Accepted Answer

The answer of Suppose that a firm's production function is...

Question 19

Suppose that a firm's production function is given by Q = 1.23KL (MP_K = 1.23L and MP_L = 1.23K), where Q is quantity of output, K is units of capital, and L is units of labor. The price per unit of labor and capital are $30 and $20, respectively. The minimum cost of producing 600 units of output is $____.

Accepted Answer

The answer of Suppose that a firm's production function is...

Question 20

For the production function Q(K,L) = K^0.5L^0.5, the marginal rate of technical substitution MRTS_LK is:

Accepted Answer

The answer of For the production function Q(K,L) = K^0.5L^0.5,...

Quiz 6: Producer Behavior

(Figure: Capital and Labor XI) Which of the following statements is (are) TRUE? I. If labor is cheaper than capital, the firm will produce at point B. II) If capital is more expensive than labor, the firm will produce at point A. III) At point A, the MRTS_LK = W/R.

(Table: Short-run Production I) The short-run production situation for a firm is listed on this table. The marginal product of labor of the second unit of labor is ____.

(Figure: Capital and Labor VIII) The movement in the isocost line is caused by a(n) :

(Table: Short-run Production I) The short-run production situation for a firm is listed on this table. The average product of labor with one unit of labor is ____.

(Figure: Capital and Labor XVI) Consider the production function Q = L^0.5K^0.5, with MP_K = L^0.5/K^0.5 and MP_L = K^0.5/L^0.5. When K = 5 and L = 10, the marginal rate of technical substitution is ____.

(Figure: Production Function I) The average product at L = 2 and L = 8, respectively, are:

(Table: Short-run Production I) The short-run production situation for a firm is listed on this table. The average product of labor when there are three units of labor is ____.

In the long run, because firms can adjust both capital and labor:

Suppose the firm's production function is Q = K^1/3L^2/3, where the MPK = and MP_L = ) If the rental rate of capital R is $35 and the wage rate W is $70, how many units of labor and capital should the firm use to produce 12 units of output?

(Figure: Capital and Labor XVI) Consider the production function Q = L^0.5K^0.5, with MP_K = L^0.5/K^0.5 and MP_L = K^0.5/L^0.5. The slope of the isoquant at Point B is ____.

In the short run, the marginal product of labor:

Suppose the production function for a coffee shop is: Q = 2K + 5L Where Q is the number of cups of coffee produced, K is the number of coffee makers, and L is the number of workers. The function for the marginal product of capital is ____.

If a firm is using a lot of capital and just a little labor, the marginal product of labor is_ relative to the marginal product of capital making it _ to substitute labor for capital.

For the production function Q(K,L) = 3K + 2L, the marginal product of labor is:

(Figure: Capital and Labor IX) The movement in the isocost line is caused by a(n) :

Suppose that a firm's production function is . The marginal rate of technical substitution is ____.

For the production function Q(K,L) = K^0.5L^0.5, the marginal rate of technical substitution MRTS_LK is:

Quiz 6: Producer Behavior

(Figure: Capital and Labor XI) Which of the following statements is (are) TRUE? I. If labor is cheaper than capital, the firm will produce at point B. II) If capital is more expensive than labor, the firm will produce at point A. III) At point A, the MRTSLK = W/R.

(Table: Short-run Production I) The short-run production situation for a firm is listed on this table. The marginal product of labor of the second unit of labor is ____.

(Figure: Capital and Labor VIII) The movement in the isocost line is caused by a(n) :

(Table: Short-run Production I) The short-run production situation for a firm is listed on this table. The average product of labor with one unit of labor is ____.

(Figure: Capital and Labor XVI) Consider the production function Q = L0.5K0.5, with MPK = L0.5/K0.5 and MPL = K0.5/L0.5. When K = 5 and L = 10, the marginal rate of technical substitution is ____.

(Figure: Production Function I) The average product at L = 2 and L = 8, respectively, are:

(Table: Short-run Production I) The short-run production situation for a firm is listed on this table. The average product of labor when there are three units of labor is ____.

In the long run, because firms can adjust both capital and labor:

Suppose the firm's production function is Q = K1/3L2/3, where the MPK = and MPL = ) If the rental rate of capital R is $35 and the wage rate W is $70, how many units of labor and capital should the firm use to produce 12 units of output?

(Figure: Capital and Labor XVI) Consider the production function Q = L0.5K0.5, with MPK = L0.5/K0.5 and MPL = K0.5/L0.5. The slope of the isoquant at Point B is ____.

In the short run, the marginal product of labor:

Suppose the production function for a coffee shop is: Q = 2K + 5L Where Q is the number of cups of coffee produced, K is the number of coffee makers, and L is the number of workers. The function for the marginal product of capital is ____.

If a firm is using a lot of capital and just a little labor, the marginal product of labor is_____ relative to the marginal product of capital making it _____ to substitute labor for capital.

For the production function Q(K,L) = 3K + 2L, the marginal product of labor is:

(Figure: Capital and Labor IX) The movement in the isocost line is caused by a(n) :

Suppose that a firm's production function is . The marginal rate of technical substitution is ____.

For the production function Q(K,L) = K0.5L0.5, the marginal rate of technical substitution MRTSLK is:

(Figure: Capital and Labor XI) Which of the following statements is (are) TRUE? I. If labor is cheaper than capital, the firm will produce at point B. II) If capital is more expensive than labor, the firm will produce at point A. III) At point A, the MRTS_LK = W/R.

(Figure: Capital and Labor XVI) Consider the production function Q = L^0.5K^0.5, with MP_K = L^0.5/K^0.5 and MP_L = K^0.5/L^0.5. When K = 5 and L = 10, the marginal rate of technical substitution is ____.

Suppose the firm's production function is Q = K^1/3L^2/3, where the MPK = and MP_L = ) If the rental rate of capital R is $35 and the wage rate W is $70, how many units of labor and capital should the firm use to produce 12 units of output?

(Figure: Capital and Labor XVI) Consider the production function Q = L^0.5K^0.5, with MP_K = L^0.5/K^0.5 and MP_L = K^0.5/L^0.5. The slope of the isoquant at Point B is ____.

If a firm is using a lot of capital and just a little labor, the marginal product of labor is_ relative to the marginal product of capital making it _ to substitute labor for capital.

For the production function Q(K,L) = K^0.5L^0.5, the marginal rate of technical substitution MRTS_LK is: