Cost and Production

Question 1

4 out of 4 points

A short-run production function assumes that

Answer

Selected Answer:

at least one input is a fixed input.

Question 2

4 out of 4 points

Refer to the following table:

Amount of total output produced from various combinations of labor and capital.

Units of Capital

1

2

3

Units

of

Labor

1

2

3

4

5

6

80

180

270

340

390

410

100

220

330

420

490

530

120

260

390

500

590

650

If capital is fixed at two units, what is the marginal product of the fourth unit of labor?

Answer

Selected Answer:

none of the above

Question 3

4 out of 4 points

Refer to the following table:

Amount of total output produced from various combinations of labor and capital.

Units of Capital

1

2

3

Units

of

Labor

1

2

3

4

5

6

80

180

270

340

390

410

100

220

330

420

490

530

120

260

390

500

590

650

If labor is fixed at three units, how much does the third unit of capital add to total output?

Answer

Selected Answer:

60

Question 4

4 out of 4 points

If average product is increasing, then marginal product

Answer

Selected Answer:

must be greater than average product.

Question 5

4 out of 4 points

Suppose that you run a house-painting company and currently have 2 workers painting a total of 4 houses per month. If you hire a third worker, 6 houses can be painted per month. If you hire a fourth worker, 9 houses can be painted, and a fifth and sixth worker will increase the number of houses painted to 13 and 15, respectively. Diminishing returns

Answer

Selected Answer:

set in when the sixth worker is hired.

Question 6

4 out of 4 points

The marginal product of labor

Answer

Selected Answer:

both b and c

Question 7

4 out of 4 points

Refer to the following table:

Output

Total

Cost

Total Fixed Cost

Total Variable Cost

Average Fixed Cost...