Question: A firm's production function is the relationship between: the inputs employed by the firm and the resulting costs of production. the factors of production and
A firm's production function is the relationship between:
the inputs employed by the firm and the resulting costs of production.
the factors of production and the resulting outputs of the production process.
the demand for a firm's output and the quantity it is able to produce with available resources.
the firm's production costs and the amount of revenue it receives from the sale of its output.
The term "fixed input" refers to:
inputs to production that do not vary with respect to quality.
inputs to production that do not vary in price.
inputs to production that yield a constant or "fixed" marginal product.
inputs to production, the quantity of which cannot be varied in the short run.
The main difference between the short run and the long run is that:
in the short run all inputs are fixed, while in the long run all inputs are variable.
in the short run the firm varies all of its inputs to find the least-cost combination of inputs.
in the short run, at least one of the firm's input levels is fixed.
in the long run, the firm is making a constrained decision about how to use existing plant and equipment efficiently.
Which of the following would be classified as a short-run decision?
A firm's decision to decrease the amount of electricity used in day-to-day operations by encouraging employees to adopt conservation strategies, e.g., shut off lights when leaving a room.
A restaurant's decision to increase the number of patrons it can accommodate by adding on a new dining room.
A trucking firm's decision to move to a smaller facility.
A university's decision to add a new residence hall.
The amount of output a firm can produce with a given quantity of fixed and variable inputs is called:
total product.
average variable product.
marginal product.
total fixed product.
The following is a hypothetical short-run production function:
Hours of Total Marginal
Labor Product Product
0 ___ ___
1 100 100
2 ___ 80
3 240 ___
Refer to the table shown here. What is the total product when 2 hours of labor are employed?
Refer to the table shown here. What is the marginal product of the third hour of labor?
60
80
100
240
The following is a hypothetical short-run production function:
Hours of Total Marginal
Labor Product Product
0 ___ ___
1 100 100
2 ___ 80
3 240 ___
Refer to the table shown here. What is the average product of the first three hours of labor?
60
80
100
240
The following is a hypothetical short-run production function:
Hours of Total Marginal
Labor Product Product
0 ___ ___
1 100 100
2 ___ 80
3 240 ___
Refer to the table shown here. The production function illustrated in the table:
incurs diminishing marginal returns beyond the first unit of labor.
incurs diminishing marginal returns beyond the second unit of labor.
incurs diminishing marginal returns beyond the third unit of labor.
does not incur diminishing marginal returns because marginal product is positive for each unit of labor employed.
Which of the following statements concerning the relationships among the firm's total cost functions is false?
TC = TFC + TVC
TVC = TFC - TC
TFC = TC - TVC
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