ECON2150 Midterm 1 Exam With 100% Accurate Solutions
Factors of production - ANSWER Resources that are used to produce a good
Inputs - ANSWER Resources, such as labour, capital equipment, and raw materials,
that are combined to produce finished goods
Output - ANSWER The amount of a good or service produced by a firm
Production function - ANSWER A mathematical representation that shows the
maximum quantity of output a firm can produce given the quantities of inputs that it
might employ
efficient - ANSWER points on the production function are?
inefficient - ANSWER points inside the production function are?
unachievable - ANSWER points outside of the production function are?
Production set - ANSWER The set of technically feasible combinations of inputs and
outputs
an objective function and a set of constraints - ANSWER what are the two parts of an
optimization model?
objective function - ANSWER The relationship that a decision maker seeks to maximize
or minimize
, constrained optimization - ANSWER An analytical tool for making the best (optimal)
choice, taking into account any possible limitations or restrictions on the choice
Constraints - ANSWER The restrictions or limits imposed on a decision maker in a
constrained optimization problem
marginal - ANSWER tells us how a dependent variable changes as a result of adding
one unit of an independent variable
Marginal cost - ANSWER measures the incremental impact of the last unit of the
independent variable (output) on the dependent variable (total cost)
Equilibrium - ANSWER A state or condition that will continue indefinitely as long as
factors exogenous to the system remain unchanged
comparative statics - ANSWER Analysis used to examine how a change in some
exogenous variable will affect the level of some endogenous variable in an economic
system
Increasing marginal returns to labour - ANSWER The region along the total product
function where output rises with additional labour at an increasing rate
Diminishing marginal returns to labour - ANSWER The region along the total product
function in which output rises with additional labour but at a decreasing rate
Diminishing total returns to labour - ANSWER The region along the total product
function where output decreases with additional labour
Average product (AP) - ANSWER The average amount of output per unit of labour
F(l)/l - ANSWER AP =
Factors of production - ANSWER Resources that are used to produce a good
Inputs - ANSWER Resources, such as labour, capital equipment, and raw materials,
that are combined to produce finished goods
Output - ANSWER The amount of a good or service produced by a firm
Production function - ANSWER A mathematical representation that shows the
maximum quantity of output a firm can produce given the quantities of inputs that it
might employ
efficient - ANSWER points on the production function are?
inefficient - ANSWER points inside the production function are?
unachievable - ANSWER points outside of the production function are?
Production set - ANSWER The set of technically feasible combinations of inputs and
outputs
an objective function and a set of constraints - ANSWER what are the two parts of an
optimization model?
objective function - ANSWER The relationship that a decision maker seeks to maximize
or minimize
, constrained optimization - ANSWER An analytical tool for making the best (optimal)
choice, taking into account any possible limitations or restrictions on the choice
Constraints - ANSWER The restrictions or limits imposed on a decision maker in a
constrained optimization problem
marginal - ANSWER tells us how a dependent variable changes as a result of adding
one unit of an independent variable
Marginal cost - ANSWER measures the incremental impact of the last unit of the
independent variable (output) on the dependent variable (total cost)
Equilibrium - ANSWER A state or condition that will continue indefinitely as long as
factors exogenous to the system remain unchanged
comparative statics - ANSWER Analysis used to examine how a change in some
exogenous variable will affect the level of some endogenous variable in an economic
system
Increasing marginal returns to labour - ANSWER The region along the total product
function where output rises with additional labour at an increasing rate
Diminishing marginal returns to labour - ANSWER The region along the total product
function in which output rises with additional labour but at a decreasing rate
Diminishing total returns to labour - ANSWER The region along the total product
function where output decreases with additional labour
Average product (AP) - ANSWER The average amount of output per unit of labour
F(l)/l - ANSWER AP =
