Question :
121) Refer to Figure 8-5. The firm that facing the : 1384219
121) Refer to Figure 8-5. The firm that is facing the isocost lines as shown will minimize its cost of production of any given output level if it employs capital and labour such that the ratio of the marginal product of labour to the marginal product of capital ( / ) is equal to
A) 5/2.
B) 5.
C) 2.
D) 2/5.
E) Not able to determine from the information provided.
122) Refer to Figure 8-6. This firm will minimize its costs of producing 2000 golf tees at point
A) A.
B) B.
C) C.
D) D.
E) E.
123) Refer to Figure 8-6. Suppose this firm is producing 4000 golf tees with 10 units of capital and 25 units of labour (point G). The marginal rate of substitution between capital and labour is
A) 2.5.
B) 0.4.
C) 100.
D) 40.
E) 0.025.
124) Refer to Figure 8-6. At each of points A, C, E and G on the isoquant map we know that
A) the firm is at its cost-minimizing position for an output level of 4000 golf tees.
B) the firm can adjust its employment of factors to reduce its total cost, with output unchanged.
C) the firm has adjusted the factor prices to equate the ratio of marginal products of the factors.
D) the ratio of the marginal utilities of capital and labour is equal to the ratio of the prices of capital and labour.
E) the ratio of the marginal products of capital and labour is equal to the ratio of the prices of capital and labour.
125) Refer to Figure 8-6. The cost-minimizing factor combination for producing 2000 golf tees is
A) 10 units of capital and 25 units of labour.
B) 12 units of capital and 30 units of labour.
C) 6 units of capital and 15 units of labour.
D) 8 units of capital and 20 units of labour.
E) 4 units of capital and 10 units of labour.
126) Refer to Figure 8-6. Suppose this firm is producing 3000 golf tees and is at point F on the isoquant map. Which of the following is true?
A) / is equal to .
B) / is greater than .
C) / is greater than .
D) / is equal to .
E) / is equal to .
127) Refer to Figure 8-6. Suppose this firm is producing 3000 golf tees and is at point F on the isoquant map. In order to maintain its output and minimize costs this firm should
A) not change its use of factors.
B) move to an isoquant closer to the origin.
C) move to an isocost line further from the origin.
D) employ more labour and less capital.
E) employ more capital and less labour.
128) Refer to Figure 8-6. Suppose there is a change in relative factor prices and the cost-minimizing method of producing 2000 golf tees is now at point D. If the total cost of producing 2000 golf tees is still $60, it must be the case that
A) the price of labour fell and the price of capital remained constant.
B) the price of labour and capital both fell.
C) the price of labour rose and the price of capital fell.
D) the price of labour fell and the price of capital rose.
E) the price of labour and capital both rose.
129) Refer to Figure 8-6. Suppose the firm is currently producing at point E and the prices of capital and labour each increase by 30%. If the firm wants to minimize the cost of producing the same level of output, the firm’s chosen factor combination would be at point
A) A.
B) C.
C) E.
D) G.
E) not determinable from the information provided.
130) Refer to Figure 8-6. As this firm is increasing its production of golf tees, it is experiencing ________ returns to scale.
A) constant
B) decreasing
C) increasing
D) diminishing
E) Not determinable from the information provided.
