Chapter 07 - Technology and Production

Quiz 8
1. ______ identifies all of the input combinations that efficiently produce a given amount of
output.
A. A production function
B. An efficient production frontier
C. A production possibilities curve
D. An isoquant
2. Which of the following is NOT a property of isoquants?
A. Isoquants curves are thin
B. Isoquants may slope upward or downward
C. Isoquants for the same technology never cross
D. Higher-level isoquants lie farther from the origin
\3.

Which of the following formulas measures the rate of substitution for labor with capital?
A. - L/K
B. - K/L
C. K/L
D. L/K
4. Suppose that the marginal product of a firm's labor is 10 units of output per hour. Also
assume that the marginal product of the firm's capital is 30 units of output per hour. In this
case, the marginal rate of technical substitution for labor with capital is
A. 3
B. 300
C. 40
D. 1/3

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Chapter 07 - Technology and Production

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Chapter 07 - Technology and Production

5. Refer to Figure 7.5. Which diagram represents isoquants for inputs that are perfect
substitutes?
A. A
B. B
C. C
D. D
6. Refer to Figure 7.5. Which diagram represents isoquants for fixed-proportions
technology?
A. A
B. B
C. C
D. D
7. Refer to Figure 7.5. Which diagram may represent isoquants for a Cobb-Douglas
production function?
A. A
B. B
C. C
D. D
8. Consider the Cobb-Douglas production function F(L,K) = ALK. Which of the following
statements is true?
A. Increases in increase labor's productivity and raise MRTSLK
B. Decreases in increase labor's productivity and raise MRTSLK
C. Increases in increase labor's productivity and lower MRTSLK
D. Changes in will not affect MRTSLK
9. Returns to scale is a ______ concept because ______.
A. Short-run; it's related to the law of diminishing marginal returns
B. Short-run; it deals with varying the level of one input while holding other inputs constant
C. Long-run; a firm can change its output level only in the long run
D. Long-run; it refers to changes in all of the firm's inputs
10. A firm has increasing returns to scale if
A. A proportional change in the use of all inputs produces a more than proportional change in
output
B. A proportional change in the use of all inputs produces a less than proportional change in
output
C. A proportional change in the use of all inputs produces the same proportional change in
output
D. An increase in capital leads to an increase in output

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Chapter 07 - Technology and Production

11. The Cobb-Douglas production function F(L,K) = ALKwill exhibit decreasing returns to
scale when
A. + = 1
B. + < 1
C. + >1
D. + = 0

12. Refer to Figure 7.7. A technological improvement is best represented by

A. A movement from point a to point b
B. A movement from point d to point a
C. A movement from point c to point a
D. A movement from point c to point d

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