Managerial Economics

Q u e st io n : Margin al factor cost is defined as the amount that an additio nal unit of the variabl e unit of the variabl e input adds to ______ ______ .   Student Answer: a. marginal cost b. variable cost c. marginal rate of technical substitution d. total cost e. none of the above   Points Received: 1 of 1   Comments: Q u e st io n : In the Cobb- Dougla s product ion functio n   Q=a L^β1.K ^β2 __ ______ ______ .   Student Answer: a. the marginal product of labor (L) is equal to β1 b. the average product of labor (L) is equal to β2 c. if the amount of labor input (L) is increased by 1 percent, then output will increase by β1 percent d. a and b e. a and c   Points Received: 1 of 1   Comments: Q u e st io n : The short- run cost functio n is:   Student Answer: a. where all inputs to the production process are available 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   Points Received: 1 of 1   Comments: Q u e st io n : Theore tically, in a long- run cost functio n:   Student Answer: a. all inputs are fixed b. all inputs are considered variable c. some inputs are always fixed d. capital and labor are always combined in fixed proportions   Points Received: 1 of 1   Comments: Q u e st io n : A linear total cost functio n implies that:   Student Answer: a. marginal costs are constant as output increases b. average total costs are continually decreasing as output increases c. a and b d. none of the above   Points Received: 1 of 1   Comments: Q u e st io n : Produc tion elastici ty   Student Answer: a. measure how a % change in output affect the % change in an input b. is not important for a company that makes a physical product c. measure the % change in output for a % change in an input d. is given by the exponent on the input in a linear production function   Points Received: 0 of 1   Comments: Q u e st io n : How do you determi ne the optimal amount of labor to use when labor is the only variabl e input?   Student Answer: a. MP L =C L   b. MP L =MP K   c. MP L /MP K =1 d. None of above   Points Received: 1 of 1   Comments: Q u e st io n : The optimal usage of two variabl e inputs is determi ned by:   Student Answer: a. The Iso-quant for the production process b. MP K =MRTS C. MP K =MCL d. None of above   Points Received: 0 of 1   Comments: Q u e st io n : Producti ve activity includes all but   Student Answer: a. stockbrokers b. loan officers at a bank c. work around the house, which you perform d. the service industries e. none above   Points Received: 1 of 1   Comments:

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