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1. When the TP falls


1. the AP_Labor is zero


2. the MP_Labor is zero


3. the AP_Labor is negative,


4. the AP_Labor is declining


2. When the AP_Labor is positive but declining, the MP_Labor could be


1. declining


2. zero


3. negative


4. any of the above


3. Stage II of production begins where the AP_Labor begins to decline


1. Always


2. never


3. sometimes


4. often


4. When the MP_Land is negative, we are in


1. stage I for land


2. stage III for labor


3. stage II for land


4. none of the above


5. If, by increasing the quantity of labor used by one unit, the firm can give up 2 units of capital and still produce the same output, then the MRTS_LK is


1. 1/2


2. 2


3. 1


4. 4


6. If the MRTS_LK equals 2, then the MP_K/MP_L is


1. 2


2. 1


3. 1/2


4. 4


7. Within the relavant range, isoquants


1. are negatively sloped


2. are convex to the origin


3. cannot cross


4. are all of the above


8. If we plot capital on the vertical axis and labor on the horizontal axis, the slope of a straight-line isocost drawn on such a graph is


1. P_L/P_K


2. P_K/P_L


3. -P_L/P_K


4. -P_K/P_L


9. At the point of producer equilibrium


1. the isoquant is tangent to the isocost


2. the MRTS_LK equals P_L/P_K


3. MP_L/P_L = MP_K/P_K


4. all of the above


10. The expansion path of production theory is analogous in consumption theory to the


1. price-consumption line


2. Engle curve


3. income-consumption line


4. budget constraint line


11. The elasticity of technical substitution is measured by


1. the slope of the isoquant


2. the change in the slope of the isoquant


3. the ratio of factor inputs


4. none of the above


12. If we have constant returns to scale and we increase the quantity of labor used per unit of time by 10% but keep the amount of capital constant, output will


1. increase by 10%


2. decrease by 10%


3. increase by more than 10%


4. increase by less than 10%