Introduction to Microeconomics Quiz - 30 Nov 2023

A firm always attempts to do the following:

• to minimize costs of production

• to use minimum capital and labor in production

• to lower costs of production

The following are the factors of production (inputs into the production process), EXCEPT:

• capital

• wages

• labor

• raw materials

What does a production function describe?

• Given a certain level of technology, a production function describes how much to produce when a firm operates with minimum costs.

• Given a certain level of technology, a production function describes how much labor and capital to use in the production of goods.

• Given a certain level of technology, a production function describes how much a firm chooses production level

A short-run production function describes the relationship between inputs and output, in which:

• all inputs can vary (change)

• one input can vary (change), while other inputs are assumed to be fixed.

• the relationship between inputs and output is only for one year

A long-run production function describes the relationship between inputs and output, in which:

• all inputs can vary (change)

• one input can vary (change), while other inputs are assumed to be fixed.

• the amount of capital can change, while the amount of labor is fixed.

The average product of labor (APL) is...

• the amount of output per unit of labor

• the amount of output per unit of capital

• the change in the amount of output due to per unit change in labor usage.

The average product of capital (APK) is...

• the amount of output per unit of capital

• the amount of output per unit of labor

• the change in the amount of output due to per unit change in capital usage.

The marginal product of labor (MPL) is ...

• The change in output as a result of the change in labor input

• The change in output as a result of the change in the costs of production

• The change in output as a result of the change in all inputs

The marginal product of capital (MPK) is ...

• The change in output as a result of the change in capital input

• The change in output as a result of the change in the costs of production

• The change in output as a result of the change in all inputs

Consider the graph. What is true at point B?

• APL is greater than MPL.

• MPL is greater than APL.

• The slope of production function is smaller than the APL.