Chapter 9/Profit Maximization 3
Chapter 7: Quiz
Production Functions
1. The marginal physical productivity of labor is defined as
a. .
b. .
c. .
d. .
2. The relationship is true
a. for all levels of l.
b. for l small enough.
c. for l large enough.
d. cannot tell from the information provided.
3. The average productivity of labor reaches its maximum
a. at the point of inflection of the total product curve.
b. where the slope of the total product curve is steepest.
c. where the slope of the total product curve is zero.
d. none of the above.
4. Graphically, the average productivity of labor is illustrated by
a. the slope of the total product curve at the relevant point.
b. the slope of the marginal productivity curve at the relevant point.
c. the negative of the slope of the marginal productivity curve at the relevant point.
d. the slope of the chord connecting the origin with the relevant point on the total output curve.
5. A firm’s isoquant shows
a. the amount of labor needed to produce a given level of output with capital held constant.
b. the combinations of labor and capital that will produce a given amount of output.
c. the amount of capital needed to produce a given level of output with labor held constant.
d. the combinations of labor that will produce a fixed amount of capital.
6. Suppose the production function for good q is given by where k and l are capital and labor inputs. Consider three statements about this function:
I. The function exhibits constant returns to scale.
II. The function exhibits diminishing marginal productivities to all inputs.
III. The function has a constant rate of technical substitution.
Which of these statements is true?
a. All of them
b. None of them
c. I and II but not III
d. I and III but not II
e. only I
7. For a fixed proportion production function, at the vertex of any of the (Lshaped) isoquants the marginal productivity of either input is
a. -∞.
b. 0.
c. 1.
d. +∞.
e. a value that cannot be determined.
8. For a production function in which the two inputs are perfect substitutes for each other,
a. isoquants are l-shaped.
b. the marginal rate of substitution is increasing.
c. the marginal rate of substitution is constant.
d. none of the above.
9. The production function q=kl
a. exhibits constant returns to scale and constant marginal productivities for k and l.
b. exhibits increasing returns to scale and increasing marginal productivities for k and l.
c. exhibits constant returns to scale and constant marginal productivities for k and l.
d. exhibits increasing returns to scale and constant marginal productivities for k and l.
10. Which of the following production functions exhibits diminishing marginal productivities and increasing returns to scale?
a. .
b. .
c. .
d. .
11. The production function exhibits
a. increasing returns to scale and diminishing marginal products for both k and l.
b. increasing returns to scale and diminishing marginal product for l only.
c. increasing returns to scale but no diminishing marginal productivities.
d. decreasing returns to scale.