Problem 1. Which of the following is the best example of two inputs that would exhibit a constant marginal rate of technical substitution?
- trucks and truck drivers
- natural gas and oil
- personal computers and clerical workers
- company employed computer programmers and temporary supplemental computer programmers
Problem 2. A firm using two inputs, X and Y, is using them in the most efficient manner when
- MPX = MPY
- PX = PY and MPX = MPY
- MPX/PY = MPY/PX
- MPX/PX = MPY /PY
Problem 3. An increase in demand:
- causes the demand curve to shift to the left.
- means consumers are willing and able to buy more at any price.
- creates a surplus at the original price.
- could be caused by an increase in the price of a complementary good.
Problem 4. Which of the following is a macroeconomic concern?
- The wage rates of electricians in Kansas City.
- The effects of agricultural price supports on the income of farmers.
- How profits are maximized by a firm.
- The causes of unemployment in the United States.
Problem 5. The difference between the short-run and the long-run production function is:
- three months or one business quarter.
- the time it takes for firms to change all production inputs.
- the time it takes for firms to change only their variable inputs.
- more information is required to answer this question.
Problem 6. Which of the following statements about the short-run production function is true?
- MP always equals AP at the maximum point of MP.
- MP always equals zero when TP is at its maximum.
- TP starts to decline at the point of diminishing returns.
- When MP diminishes, AP is at its minimum point.
- None of the above is true.