Question :
101) The fact that isoquants downward sloping indicates
A) the diminishing : 1384217
101) The fact that isoquants are downward sloping indicates
A) the diminishing marginal productivity of a variable factor.
B) the diminishing marginal productivity of a fixed factor.
C) that each factor input has a negative marginal productivity.
D) a change in relative factor prices, with output held constant.
E) that a reduction in the use of one factor requires an increase in the use of the other factor in order to keep output constant.
102) Isoquants are usually drawn convex when viewed from the origin, reflecting the standard assumption
A) that both factors are subject to the law of diminishing returns.
B) that the variable factor is subject to the law of diminishing returns.
C) the positive marginal productivity of all factors.
D) negative marginal productivity of all factors.
E) that both factors are subject to increasing returns.
103) The slope of a firm’s isocost line is equal to the ratio of
A) the marginal products of its factors.
B) the marginal rate of substitution between factors.
C) the factor prices.
D) total variable cost to total cost.
E) product prices.
104) A firm’s least-cost position for producing a given output level occurs at that point where
A) the isocost line intersects the highest isoquant.
B) the isocost and isoquant intersect the horizontal axis.
C) the isoquant is closest to the origin.
D) the isocost line and the isoquant are tangent to each other.
E) the isocost and isoquant intersect the vertical axis.
105) Movement from one point to another along an isocost line implies a change in
A) output levels, holding factor combinations constant.
B) factor combinations, holding expenditure constant.
C) factor prices.
D) the level of output, independent of what happens to factor combinations.
E) expenditure.
106) Isocost lines are downward sloping straight lines, reflecting
A) decreasing factor prices.
B) increasing factor prices.
C) that each factor price has a negative value.
D) a change in relative factor prices.
E) constant factor prices.
107) A firm operates at its least-cost position for a given level of output by equating
A) the marginal product of each factor.
B) the marginal product per dollar spent for each factor.
C) the price of each input.
D) the total expenditure on each input.
E) the average product for each factor.
108) Refer to Figure 8-4. A firm that is producing an output of 1000 units will minimize its costs at point
A) A.
B) B.
C) C.
D) D.
E) halfway between B and D.
109) Refer to Figure 8-4. A firm that is producing an output of 2000 units will minimize its costs at point
A) A.
B) B.
C) C.
D) D.
E) There is not enough information provided to be sure.
110) Refer to Figure 8-4. The firm is initially minimizing the cost of producing 1000 units of output. Suppose the factor prices then change such that the price of capital (K) rises and the price of labour (L) falls. If the firm decides to keep its output unchanged, it will move toward the point
A) A.
B) B.
C) C.
D) D.
E) Unknown as there is insufficient information to know
