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Chapter 07 - Technology and Production

Quiz 7
1. A firm's _______ summarizes all of its possible methods of producing its output.
A. Production technology
B. Efficient production frontier
C. Production function
D. Production possibilities curve
2. A firm's _______ contains all combinations of inputs and outputs that are possible given the
firms' technology.
A. Production possibilities set
B. Efficient production frontier
C. Production function
D. Production possibilities curve
3. In the short run,
A. The firm is free to change the amount of capital it uses
B. All inputs are variable
C. There are no variable inputs
D. At least one input is fixed
4. The long run refers to a period of time over which
A. The firm can change its level of output
B. Only one input is fixed
C. All inputs are variable
D. Production technology increases
5. Suppose that a firm uses both labor (L) and capital (K) as inputs. The firm's long-run
production function is Q = F(L,K) = 5LK. If the firm has 100 units of capital, what is its
short-run production function?
A. Q = F(K) = 50 K
B. Q = F(L) = 50 L
C. Q = F(L,K) = 50 LK
D. Q = F(L) = 500 L
6. Suppose that a firm uses both labor (L) and capital (K) as inputs. The firm's long-run
production function is Q = F(L,K) = 5LK. The firm has 100 units of capital. If the firm uses
an efficient production method, how much output does it produce in the short run if it hires 25
workers?
A. 250 units
B. 1,250 units
C. 2,500 units
D. 50 units

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Chapter 07 - Technology and Production

7. The average product of labor is defined as


A. The additional output produced by the last L units of labor hired
B. The amount of output divided by the amount of capital used to produce the output
C. The amount of output produced multiplied by the last L units of labor hired
D. The amount of output divided by the number of workers employed
8. The marginal product of labor is defined as
A. The additional output produced by the last L units of labor hired
B. The amount of output divided by the amount of capital used to produce the output
C. The amount of output produced multiplied by the last L units of labor hired
D. The amount of output divided by the number of workers employed

9. Refer to Table 7.1. What is the marginal product of the 3rd worker?
A. 3 units of output
B. 4 units of output
C. 15 units of output
D. 5 units of output
10. Refer to Table 7.1. What is the average product of the 4th worker?
A. 4 units of output
B. 3 units of output
C. 16 units of output
D. 6 units of output
11. Refer to Table 7.1. Diminishing returns set in with the ______ worker.
A. Third
B. Fifth
C. Fourth
D. Sixth

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Chapter 07 - Technology and Production

12. According to the Law of Diminishing Marginal Returns, as additional units of one input
are employed as all other inputs are held constant, total output will eventually ______.
A. Decrease
B. Increase at an increasing rate
C. Increase at a decreasing rate
D. Increase at a constant rate
13. When the marginal product of an input is ______ than the average product, the marginal
units of the input _____ the average product.
A. Larger; lower
B. Smaller; raise
C. Smaller; do not affect
D. Larger; raise

14. Refer to Figure 7.1. What is the average product of 20 workers?


A. 1.1 units of output
B. 22 units of output
C. 2 units of output
D. 8 units of output
15. Refer to Figure 7.1. What is the marginal product of the 25th worker?
A. 1.1 units of output
B. 22 units of output
C. 2 units of output
D. 10 units of output

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