Question 1

A firm's profit is simply defined as:

Accepted Answer

A)  zero.
B)  revenues plus costs.
C)  revenues minus costs.
D)  the price of output minus labor costs.
E)  the price of output minus labor costs minus capital costs.F) B) and E)
G) B) and C)

Question 2

If the production function is given by 
And 
,K = 27,and L = 8,total output equals:

Accepted Answer

A)  Y = 1.
B)  Y = 18.
C)  Y = 12.
D)  Y = 8.
E)  none of the aboveF) C) and E)
G) A) and E)

Question 3

The marginal product of labor curve represents:

Accepted Answer

A)  the demand for wages.
B)  the supply of labor.
C)  the demand for labor.
D)  the demand for capital.
E)  the supply of wages.F) A) and E)
G) A) and B)

Question 4

Suppose the total factor productivity in Switzerland,Italy,South Africa,and India are 0.72,0.69,0.44,and 0.23,respectively.If the U.S.total factor productivity is 1.00,then the United States is __________ productive,respectively,than these four countries.

Accepted Answer

A)  equally as
B)  28 percent,31 percent,56 percent,and 73 percent less
C)  28 percent,31 percent,56 percent,and 73 percent more
D)  72 percent,69 percent,44 percent,and 23 percent more
E)  72 percent,69 percent,44 percent,and 23 percent lessF) All of the above
G) A) and E)

Question 5

In the United States,the average number of years of education for adults over the age of 25 is 16 years.

Accepted Answer

A) True 
 B)False

Question 6

The two main inputs we consider in a simple production function are:

Accepted Answer

A)  land and labor.
B)  capital and land.
C)  capital and labor.
D)  utilities and capital.
E)  natural resources and labor.F) A) and B)
G) D) and E)

Question 7

One explanation of differences in total factor productivity is differences in labor's share of GDP.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following explain differences in total factor productivity?

Accepted Answer

A)  institutions
B)  human capital
C)  infrastructure
D)  legal structure.
E)  all of the aboveF) All of the above
G) D) and E)

Question 9

In the Cobb-Douglas production function 
,the 
Represents:

Accepted Answer

A)  total income.
B)  the share of production contributed by labor.
C)  the total amount of capital in an economy.
D)  the total demand for capital in an economy.
E)  the share of production contributed by capital.F) A) and D)
G) B) and E)

Question 10

In the Cobb-Douglas production function 
,defining y = Y/L as output per person and k = K/L as capital per person,the per person production function is:

Accepted Answer

A)    .
B)    .
C)    .
D)    .
E)  none of the aboveF) B) and D)
G) D) and E)

Question 11

The equation 
Has two important implications:

Accepted Answer

A)  Output per person tends to be higher when (1) the productivity parameter is higher,and (2) the amount of capital per person is higher.
B)  Output per person tends to be lower when (1) the productivity parameter is higher,and (2) the amount of capital per person is higher.
C)  Output per person tends to be higher when (1) the productivity parameter is lower,and (2) the amount of capital per person is higher.
D)  Output per person tends to be higher when (1) the productivity parameter is higher,and (2) the amount of capital per person is lower.
E)  Output tends to be higher when (1) the productivity parameter is higher,and (2) the amount of capital per person is higher.F) B) and E)
G) A) and E)

Question 12

Which of the following production functions exhibits constant returns to scale?

Accepted Answer

A)   
B)   
C)   
D)   
E)  all of the aboveF) B) and C)
G) A) and B)

Question 13

A production function of the form  
exhibits constant returns to scale.

Accepted Answer

A) True 
 B)False

Question 14

A production function exhibits constant returns to scale if,

Accepted Answer

A)  when you hold inputs constant,you double the output.
B)  when you double each input,you more than double the output.
C)  when you double each input,you less than double the output.
D)  when you double one input,you double the output.
E)  when you double each input,you double the output.F) A) and C)
G) A) and E)

Question 15

In the Cobb-Douglas production  
,what do the a < 1 and b = 1 - a reflect? Show how you can derive your answer.

Accepted Answer

a is the share of total national income ...

Question 16

Consider two countries,labeled 1 and 2.If each has the production function 
,i = 1,2,the only difference between the two countries is that 
)

Accepted Answer

A)  Country 2 will not produce anything,ceteris paribus.
B)  Country 2 will produce more than Country 1,ceteris paribus.
C)  Country 1 will produce more than Country 2,ceteris paribus.
D)  Each will produce the same amount,ceteris paribus.
E)  Not enough information is given.F) A) and C)
G) A) and D)

Question 17

The marginal product of labor curve represents the labor supply curve.

Accepted Answer

A) True 
 B)False

Question 18

The solution to the firm's profit maximization is:

Accepted Answer

A)  MPL = w.
B)  MPL = w and MPK = r.
C)  MPL 
D)  MPL = w and MPK = 0.
E)  MPL > w and MPK = r.F) A) and D)
G) D) and E)

Question 19

If you have data on per capita GDP and capital per worker,to find total factor productivity you can use the equation  
1/3,if capital's share of GDP is twothirds.

Accepted Answer

A) True 
 B)False

Question 20

-Consider the three production functions in Figure 4.5.Each represents a different country.For any given per capita stock of physical capital,Country __________ has the highest total factor productivity.

Accepted Answer

A)  A
B)  B
C)  C
D)  Not enough information is given.
E)  none of the aboveF) A) and B)
G) All of the above

Exam 4: A Model of Production

In the Cobb-Douglas production function ,defining y = Y/L as output per person and k = K/L as capital per person,the per person production function is:

Correct AnswerverifiedShow Answer

In the United States,the average number of years of education for adults over the age of 25 is 16 years.

Correct AnswerverifiedShow Answer

In the Cobb-Douglas production function ,the Represents:

Correct AnswerverifiedShow Answer

The marginal product of labor curve represents:

Correct AnswerverifiedShow Answer

Suppose the total factor productivity in Switzerland,Italy,South Africa,and India are 0.72,0.69,0.44,and 0.23,respectively.If the U.S.total factor productivity is 1.00,then the United States is __________ productive,respectively,than these four countries.

Correct AnswerverifiedShow Answer

The equation Has two important implications:

Correct AnswerverifiedShow Answer

Which of the following explain differences in total factor productivity?

Correct AnswerverifiedShow Answer

If the production function is given by And ,K = 27,and L = 8,total output equals:

Correct AnswerverifiedShow Answer

In the Cobb-Douglas production ,what do the a < 1 and b = 1 - a reflect? Show how you can derive your answer.

Correct Answerverifieda is the share of total national income ...View AnswerShow Answer

Which of the following production functions exhibits constant returns to scale?

Correct AnswerverifiedShow Answer

-Consider the three production functions in Figure 4.5.Each represents a different country.For any given per capita stock of physical capital,Country __________ has the highest total factor productivity.

Correct AnswerverifiedShow Answer

A firm's profit is simply defined as:

Correct AnswerverifiedShow Answer

If you have data on per capita GDP and capital per worker,to find total factor productivity you can use the equation 1/3,if capital's share of GDP is twothirds.

Correct AnswerverifiedShow Answer

One explanation of differences in total factor productivity is differences in labor's share of GDP.

Correct AnswerverifiedShow Answer

The solution to the firm's profit maximization is:

Correct AnswerverifiedShow Answer

The two main inputs we consider in a simple production function are:

Correct AnswerverifiedShow Answer

Consider two countries,labeled 1 and 2.If each has the production function ,i = 1,2,the only difference between the two countries is that )

Correct AnswerverifiedShow Answer

The marginal product of labor curve represents the labor supply curve.

Correct AnswerverifiedShow Answer

A production function exhibits constant returns to scale if,

Correct AnswerverifiedShow Answer

A production function of the form exhibits constant returns to scale.

Correct AnswerverifiedShow Answer

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a is the share of total national income ...
View Answer

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