Microeconomics Practice Test - 6: Theory of Production
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- When the TP falls
- the APLabor is zero
- the MPLabor is zero
- the APLabor is negative,
- the APLabor is declining
- When the APLabor is positive but declining, the MPLabor could be
- declining
- zero
- negative
- any of the above
- Stage II of production begins where the APLabor begins to decline
- Always
- never
- sometimes
- often
- When the MPLand is negative, we are in
- stage I for land
- stage III for labor
- stage II for land
- none of the above
- 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 MRTSLK is
- 1/2
- 2
- 1
- 4
- If the MRTSLK equals 2, then the MPK/MPL is
- 2
- 1
- 1/2
- 4
- Within the relavant range, isoquants
- are negatively sloped
- are convex to the origin
- cannot cross
- are all of the above
- 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
- PL/PK
- PK/PL
- -PL/PK
- -PK/PL
- At the point of producer equilibrium
- the isoquant is tangent to the isocost
- the MRTSLK equals PL/PK
- MPL/PL = MPK/PK
- all of the above
- The expansion path of production theory is analogous in consumption theory to the
- price-consumption line
- Engle curve
- income-consumption line
- budget constraint line
- The elasticity of technical substitution is measured by
- the slope of the isoquant
- the change in the slope of the isoquant
- the ratio of factor inputs
- none of the above
- 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
- increase by 10%
- decrease by 10%
- increase by more than 10%
- increase by less than 10%
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