ECONOM 4351 Test Bank
Chapter 6 Production
1) A production function defines the output that can be produced
A) at the lowest cost, given the inputs available.
B) for the average firm.
C) if the firm is technically efficient.
D) in a given time period if no additional inputs are hired.
E) as technology changes over time.
Answer: C
Diff: 2
Section: 6.1
2) A production function assumes a given
A) technology.
B) set of input prices.
C) ratio of input prices.
D) amount of capital and labor.
E) amount of output.
Answer: A
Diff: 1
Section: 6.1
3) A function that indicates the maximum output per unit of time that a firm can produce, for
every combination of inputs with a given technology, is called
A) an isoquant. B) a production possibility curve.
C) a production function. D) an isocost function.
Answer: C
Diff: 1
Section: 6.1
4) Use the following two statements to answer this question:
I. Production functions describe what is technically feasible when the firm operates
efficiently.
II. The production function shows the least cost method of producing a given level of output.
,ECONOM 4351 Test Bank
A) Both I and II are true. B) I is true, and II is false.
C) I is false, and II is true. D) Both I and II are false.
Answer: B
Diff: 1
Section: 6.1
2365) A farmer uses L units of labor and K units of capital to produce Q units of corn using a
production function F(K,L). A production plan that uses Kʹ = Lʹ = 10 to produce Qʹ units of
corn where
Qʹ < F(10, 10) is said to be
A) technically feasible and efficient.
B) technically unfeasible and efficient.
C) technically feasible and inefficient.
D) technically unfeasible and inefficient.
E) none of the above
Answer: C
Diff: 2
Section: 6.1
6) Which of the following inputs are variable in the long run?
A) labor. B) capital and equipment.
C) plant size. D) all of these.
Answer: D
Diff: 1
Section: 6.1
7) The short run is
A) less than a year.
B) three years.
C) however long it takes to produce the planned output.
D) a time period in which at least one input is fixed.
E) a time period in which at least one set of outputs has been decided upon.
Answer: D
,ECONOM 4351 Test Bank
Diff: 1
Section: 6.1
8) Joe owns a small coffee shop, and his production function is q = 3KL where q is total output
in
cups per hour, K is the number of coffee machines (capital), and L is the number of employees
hired per hour (labor). If Joeʹs capital is currently fixed at K=3 machines, what is his short-run
production function?
A) q = 3L B) q = 3L2 C) q = 9L D) q = 3K2
Answer: C
Diff: 1
Section: 6.1
9) Suppose there are ten identical manufacturing firms that produce computer chips with
machinery (capital, K) and labor (L), and each firm has a production function of the form q =
10KL0.5. What is the industry-level production function?
A) Q = 10K10L5 B) Q = 100KL0.5
C) Q = 100L0.5 D) none of the above
Answer: B
Diff: 1
Section: 6.1
23710) For many firms, capital is the production input that is typically fixed in the short
run. Which
of the following firms would face the longest time required to adjust its capital inputs?
A) Firm that makes DVD players. B) Computer chip fabricator
C) Flat-screen TV manufacturer D) Nuclear power plant
Answer: D
Diff: 2
Section: 6.1
11) We manufacturer automobiles given the production function q = 5KL where q is the number
of autos assembled per eight-hour shift, K is the number of robots used on the assembly line
(capital) and L is the number of workers hired per hour (labor). If we use K=10 robots and
L=10 workers in order to produce q = 450 autos per shift, then we know that production is:
, ECONOM 4351 Test Bank
A) technologically efficient. B) technologically inefficient.
C) maximized. D) optimal.
Answer: B
Diff: 1
Section: 6.1
12) Writing total output as Q, change in output as ΔQ, total labor employment as L, and change
in
labor employment as ΔL, the marginal product of labor can be written algebraically as
A) ΔQ · L. B) Q / L. C) ΔL / ΔQ. D) ΔQ / ΔL.
Answer: D
Diff: 1
Section: 6.2
13) The slope of the total product curve is the
A) average product.
B) slope of a line from the origin to the point.
C) marginal product.
D) marginal rate of technical substitution.
Answer: C
Diff: 1
Section: 6.2
14) The law of diminishing returns refers to diminishing
A) total returns. B) marginal returns.
C) average returns. D) all of these.
Answer: B
Diff: 1
Section: 6.2
15) When labor usage is at 12 units, output is 36 units. From this we may infer that
A) the marginal product of labor is 3. B) the total product of labor is 1/3.
C) the average product of labor is 3. D) none of the above
Answer: C
Chapter 6 Production
1) A production function defines the output that can be produced
A) at the lowest cost, given the inputs available.
B) for the average firm.
C) if the firm is technically efficient.
D) in a given time period if no additional inputs are hired.
E) as technology changes over time.
Answer: C
Diff: 2
Section: 6.1
2) A production function assumes a given
A) technology.
B) set of input prices.
C) ratio of input prices.
D) amount of capital and labor.
E) amount of output.
Answer: A
Diff: 1
Section: 6.1
3) A function that indicates the maximum output per unit of time that a firm can produce, for
every combination of inputs with a given technology, is called
A) an isoquant. B) a production possibility curve.
C) a production function. D) an isocost function.
Answer: C
Diff: 1
Section: 6.1
4) Use the following two statements to answer this question:
I. Production functions describe what is technically feasible when the firm operates
efficiently.
II. The production function shows the least cost method of producing a given level of output.
,ECONOM 4351 Test Bank
A) Both I and II are true. B) I is true, and II is false.
C) I is false, and II is true. D) Both I and II are false.
Answer: B
Diff: 1
Section: 6.1
2365) A farmer uses L units of labor and K units of capital to produce Q units of corn using a
production function F(K,L). A production plan that uses Kʹ = Lʹ = 10 to produce Qʹ units of
corn where
Qʹ < F(10, 10) is said to be
A) technically feasible and efficient.
B) technically unfeasible and efficient.
C) technically feasible and inefficient.
D) technically unfeasible and inefficient.
E) none of the above
Answer: C
Diff: 2
Section: 6.1
6) Which of the following inputs are variable in the long run?
A) labor. B) capital and equipment.
C) plant size. D) all of these.
Answer: D
Diff: 1
Section: 6.1
7) The short run is
A) less than a year.
B) three years.
C) however long it takes to produce the planned output.
D) a time period in which at least one input is fixed.
E) a time period in which at least one set of outputs has been decided upon.
Answer: D
,ECONOM 4351 Test Bank
Diff: 1
Section: 6.1
8) Joe owns a small coffee shop, and his production function is q = 3KL where q is total output
in
cups per hour, K is the number of coffee machines (capital), and L is the number of employees
hired per hour (labor). If Joeʹs capital is currently fixed at K=3 machines, what is his short-run
production function?
A) q = 3L B) q = 3L2 C) q = 9L D) q = 3K2
Answer: C
Diff: 1
Section: 6.1
9) Suppose there are ten identical manufacturing firms that produce computer chips with
machinery (capital, K) and labor (L), and each firm has a production function of the form q =
10KL0.5. What is the industry-level production function?
A) Q = 10K10L5 B) Q = 100KL0.5
C) Q = 100L0.5 D) none of the above
Answer: B
Diff: 1
Section: 6.1
23710) For many firms, capital is the production input that is typically fixed in the short
run. Which
of the following firms would face the longest time required to adjust its capital inputs?
A) Firm that makes DVD players. B) Computer chip fabricator
C) Flat-screen TV manufacturer D) Nuclear power plant
Answer: D
Diff: 2
Section: 6.1
11) We manufacturer automobiles given the production function q = 5KL where q is the number
of autos assembled per eight-hour shift, K is the number of robots used on the assembly line
(capital) and L is the number of workers hired per hour (labor). If we use K=10 robots and
L=10 workers in order to produce q = 450 autos per shift, then we know that production is:
, ECONOM 4351 Test Bank
A) technologically efficient. B) technologically inefficient.
C) maximized. D) optimal.
Answer: B
Diff: 1
Section: 6.1
12) Writing total output as Q, change in output as ΔQ, total labor employment as L, and change
in
labor employment as ΔL, the marginal product of labor can be written algebraically as
A) ΔQ · L. B) Q / L. C) ΔL / ΔQ. D) ΔQ / ΔL.
Answer: D
Diff: 1
Section: 6.2
13) The slope of the total product curve is the
A) average product.
B) slope of a line from the origin to the point.
C) marginal product.
D) marginal rate of technical substitution.
Answer: C
Diff: 1
Section: 6.2
14) The law of diminishing returns refers to diminishing
A) total returns. B) marginal returns.
C) average returns. D) all of these.
Answer: B
Diff: 1
Section: 6.2
15) When labor usage is at 12 units, output is 36 units. From this we may infer that
A) the marginal product of labor is 3. B) the total product of labor is 1/3.
C) the average product of labor is 3. D) none of the above
Answer: C
