Part 1.

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 ofTotalMarginal

LaborProductProduct

0______

1100100

2___80

3240___

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 ofTotalMarginal

Labor Product Product

0______

1100100

2___80

3240___

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 ofTotalMarginal

LaborProductProduct

0______

1100100

2___80

3240___

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

TC = TFC when output = 0.

Part ii.

Explain the correct answer.

Instructions Chart of Accounts Journal Instructions X After the accounts have been adjusted at April 30, the end of the fiscal year, the following balances were taken from the ledger of Nuclear Landscaping Co. Retained Earnings $643,600 Dividends 10,500 Fees Earned 356,500 Wages Expense 283,100 Rent Expense 56,000 Supplies Expense 11,500 Miscellaneous Expense 13,000 Journalize the four entries required to close the accounts. Refer to the Chart of Accounts for exact wording of account titles.Instructions Chart of Accounts Journal Instructions Chart of Accounts CHART OF ACCOUNTS Nuclear Landscaping Co. General Ledger ASSETS REVENUE 11 Cash 41 Fees Earned 12 Accounts Receivable 13 Supplies EXPENSES 14 Prepaid Rent 51 Wages Expense 15 Land 52 Rent Expense 53 Supplies Expense LIABILITIES 59 Miscellaneous Expense 21 Accounts Payable 22 Unearned Fees 23 Wages Payable EQUITY 31 Common Stock 32 Retained Earnings 33 Dividends 34 income Summary1. During a period of rising interest rates, a bank's net interest margin will likely if its liabilities are its assets. a. increase; more rate sensitive than b. decrease; more rate sensitive than C. increase; equally rate sensitive as d. decrease; equally rate sensitive as e. None of the above. 2. If a bank expects interest rates to consistently over time, it will consider allocating most funds to rate- assets. a. decrease; sensitive b. decrease; insensitive c. increase; insensitive d. None of the above. 3. Petri Bank had interest revenues of $70 million last year and $30 million in interest expenses. About $300 million of Petri's $800 million in assets are rate sensitive, while $600 million of its liabilities are rate sensitive. Petri Bank's net interest margin is_ percent a. 4.0 b. 3.6 C. 6.7 d. 5.0 e. None of the above. 4. The measure of interest rate risk that uses the difference between rate-sensitive assets and rate-sensitive liabilities is called a. gap measurement. b. duration measurement. c. duration ratio. d. gap ratio. e. None of the above. 5. A bank has a return on assets of 2 percent, $40 million in assets, and $4 million in equity. What is the return on equity? a. 10 percent b. 0.5 percent. C. 2 percent d. 20 percent e. None of the above