Beruflich Dokumente
Kultur Dokumente
ID: B
1. The production function is given by F(L) 6L2/3. Suppose that the cost per unit of labor is $16 and the price
of output is $8. How many units of labor will the firm hire?
a. 4
b. 8
c. 24
d. 16
e. None of the above.
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2. A competitive firm has a long-run total cost function c(y) 2y2 288 for y 0 and c(0) 0. Its long-run
supply function is described as
a. y p/2 if p 53, y 0 if p 43.
b. y p/4 if p 51, y 0 if p 51.
c. y p/2 if p 46, y 0 if p 46.
d. y p/4 if p 48, y 0 if p 48.
e. y p/2 if p 51, y 0 if p 54.
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4. A competitive firm has the short-run cost function c(y) 2y3 16y2 128y 10. The firm will produce a
positive amount in the short run if and only if the price is greater than
a. $192.
b. $48.
c. $99.
d. $96.
e. $95.
Name: ________________________
ID: B
____
5. The bicycle industry y is made up of 100 firms with the long-run cost curve c(y) 2 (y2/2) and 60 firms
with the long-run cost curve c(y) y2/10. No new firms can enter the industry. What is the long-run industry
supply curve at prices greater than $2?
a. y 400p.
b. y 435p.
c. y 300p.
d. y 200p.
e. y 420p.
____
____
7. A firm has the production function f(x1, x2) (xb1 xb2)c, where b 0 and c 0. This firm will have
a. increasing returns to scale if and only if 2b c 1.
b. constant returns to scale if and only if c 1.
c. increasing returns to scale if and only if b c 1.
d. increasing returns to scale if and only if bc 1.
e. constant returns to scale if and only if b c.
____
8. The demand for a monopolists output is 3,000/(p 2)2, where p is the price it charges. At a price of $3, the
elasticity of demand for the monopolists output is
a. 1.10.
b. 2.10.
c. 1.20.
d. 2.60.
e. 1.
____
9. If output is produced according to Q 4LK, the price of K is $10, and the price of L is $40, then the cost
minimizing cost minimizing combination of K and L capable of producing 64 units of output is
a. L 32 and K 32.
b. L 2 and K 8.
c. L 16 and K 1.
d. L 1 and K 16.
e. L 2 and K 2.
Name: ________________________
ID: B
____ 10. A firm has the production function Q X1/21X2. In the short run it must use exactly 35 units of factor 2. The
price of factor 1 is $105 per unit and the price of factor 2 is $3 per unit. The firms short-run marginal cost
function is
a. MC(Q) 105Q-1/2.
b. MC(Q) 105 105Q2.
c. MC(Q) 3Q.
d. MC(Q) 35Q-1/2.
e. MC(Q) 6Q/35.
____ 11. When Farmer Hoglund applies N pounds of fertilizer per acre, the marginal product of fertilizer is 1 N/200
bushels of corn. If the price of corn is $2 per bushel and the price of fertilizer is $0.40 per pound, then how
many pounds of fertilizer per acre should Farmer Hoglund use in order to maximize his profits?
a. 160
b. 320
c. 200
d. 84
e. 328
____ 12. A firm has the long-run cost function C(Q) 4Q2 64.In the long run, it will supply a positive amount of
output, so long as the price is greater than
a. $16.
b. $64.
c. $32.
d. $37.
e. $72.
____ 13. A profit-maximizing monopolist faces a downward-sloping demand curve that has a constant elasticity of 4.
The firm finds it optimal to charge a price of $24 for its output. What is its marginal cost at this level of
output?
a. $24
b. $10
c. $48
d. $18
e. $55
____ 14. A firm has a production function f(x, y) 1.40(x0.60 y0.60)2 whenever x 0 and y 0. When the amounts of
both inputs are positive, this firm has
a. increasing returns to scale.
b. increasing returns to scale if output is less than 1 and decreasing returns to scale if output
is greater than 1.
c. decreasing returns to scale.
d. constant returns to scale.
e. increasing returns to scale if x y 1 and decreasing returns to scale otherwise.
Name: ________________________
ID: B
____ 15. An orange grower has discovered a process for producing oranges that requires two inputs. The production
function is Q min2x1, x2, where x1 andx2 are the amounts of inputs 1 and 2 that he uses. The prices of
these two inputs are w1 $5 and w2 $2,respectively. The minimum cost of producing 140 units is therefore
a. $700.
b. $280.
c. $1,400.
d. $630.
e. $980.
ID: B
ANS:
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B
D
A
D
A
A
D
C
B
E
A
C
D
A
D
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1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
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DIF:
1
2
2
3
2
DIF: 2
DIF: 2
DIF: 1
DIF: 2
DIF: 1
DIF: 2
DIF: 1