ECO 353 Study Guide - Quiz Guide: Horse Length, Production Function, Substitute Good
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Fixed inputs are those that can never be changed: t f. All inputs are fixed in the short run: t f. The firm plans in the short run and operates in the long run: t f average product is increasing. When an input"s average product exceeds its marginal product: t f input so long as the marginal revenue product of the input is greater than the marginal resource cost of the input. In general, a firm should continue to hire additional units of an: t f in the firm"s total revenue that results from employing an additional unit of a variable input. The marginal revenue product of an input is equal to the change: t f total cost that results from hiring an additional unit of a variable input. The marginal resource cost of an input is equal to the change in: t f in the same level of output.
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The law of eventually diminishing marginal returns: (Points : 1)
a. states that each and every increase in the amount of the variable factor employed in the production process will yield diminishing marginal returns.
b. is a mathematical theorem that can be logically proved or disproved
c. is the rate at which one input may be substituted for another input in the production process
d. None of the above
b. the incremental change in total output that can be produced by the use of one more unit of the variable input in the production process c. the percentage change in output resulting from a given percentage change in the amount of the variable input X employed in the production process with Y d. None of the above |
b. the marginal rate of technical substitution c. equal to MPx/MPy d. all of the above e. none of the above |
b. equal to the marginal factor cost of the variable factor times the marginal revenue resulting from the increase in output obtained c. equal to the marginal product of the variable factor times the marginal product resulting from the increase in output obtained d. a and b e. a and c |
b. variable cost c. marginal rate of technical substitution d. total cost e. none of the above |
b. the average product of labor (L) is equal to ?2 c. if the amount of labor input (L) is increased by 1 percent, then output will increase by ?1 percent d. a and b e. a and c |
b. relevant to decisions in which one or more inputs to the production process are fixed c. not relevant to optimal pricing and production output decision facilities d. crucial in making optimal investment decisions in new production facilities e. none of the above |
b. all inputs are considered variable c. some inputs are always fixed d. capital and labor are always combined in fixed proportions |
A linear total cost function implies that: (Points : 1) |
b. average total costs are continually decreasing as output increases
c. a and b
d. none of the above