Exam #2 (pt. 2 - WS 5) Flashcards
Most inputs in production processes can be:
a. substituted for each other, but not perfectly
b. substituted for each other, perfectly
c. not substituted for each other
d. not enough information to know
a.
Perfect substitutes in production have:
a. curved isoquants
b. substitutes in production do not have isoquants
c. straight-line isoquants
d. L-shaped isoquants
c.
The cost minimizing combination of inputs can be found at:
a. the tangency point of the isoquant and the isocost line
b. the tangency point of the isoquant and the horizontal axis
c. the tangency point of the isoquant and the vertical axis
d. not enough information to know the
a.
Perfect complements are:
a. not used in production
b. nice things to say to another person
c. used together in production
d. used either/or in production
c.
An isoquant is defined in economics as a line indicating all combinations of two variable inputs that will produce:
a. an increasing level of output
b. an increasing level of input
c. the same level of output
d. the same level of input
c.
If an isoquant intersects an isocost line at two points, a manager can surmise that:
a. there is a lower isocost line where the isoquant will intersect at only one point
b. no least-cost combination is possible
c. there are two choices of least-cost input combinations
d. none of the other three answers
a.
Agricultural firms will adjust the level of input use based on:
a. changes in the absolute prices
b. changes in relative prices
c. increases in general inflation
d. management decisions based on inside information
b.
To determine the profit-maximizing level of production with two inputs, the manager must know:
a. the marginal rate of technical substitution
b. the slope of the relevant isoquant line
c. the slope of the relevant isocost line
d. the marginal rate of technical substitution and the price ratio
d.
The traditional convex isoquant that is associated with agricultural production processes gets its shape from:
a. constant substitutability of inputs
b. the diminishing returns in the production function
c. cost minimizing behavior of the firm
d. the complementarity of the production surface
b.
A manager can minimize production costs by operating at a point where:
a. the isoquant is tangent to the isocost line
b. the isoquant is equal to zero
c. the isoquant is tangent to the origin
d. not enough information to know
a.
Perfect substitutability of inputs is:
a. the most common relationship between inputs in agribusiness firms
b. the least common relationship between inputs in agribusiness firms
c. possible in agribusiness firms, but not common
d. the only possibility for inputs in agribusiness firms
c.
An isoquant that is convex to the origin and negatively sloped depicts:
a. imperfect substitutability
b. constant substitutability
c. perfect substitutability
d. none of the other three answers
a.
Efficient use of two inputs in the production process will depend on:
a. prices of both inputs
b. scarcity
c. prices and productivity of both inputs
d. productivity of both inputs
c.
The marginal rate of technical substitution between two inputs in a single production process describes:
a. the only combination of inputs that will produce a profit
b. every combination of inputs that will produce a profit
c. several combinations of inputs that will produce a profit
d. none of the other three answers
d.
Managers of agribusiness firms can substitute inputs in the production process to maintain output:
a. only as long as short run profits are high
b. both in the short run and the long run
c. only in the long run
d. only in the short run
b.
For US agriculture, labor may be substituted for capital in production, but labor:
a. cannot be substituted for land
b. cannot be substituted for chemical inputs
c. cannot be substituted for machinery
d. none of the above
d.
Two isoquants can never:
a. intersect
b. be L-shaped
c. be positive
d. be negative
a.
Which equation best represents an isoquant?
a. Y = f (A / K, L, M)
b. Y1, Y2, = f (. / A, K, L, M)
c. Y = f (A, K, / L, M)
d. Y = f (A, K, L, M)
c.
In the graph of an isoquant, there are:
a. inputs on both axes
b. input on the x-axis, and output on the y-axis
c. output on both axes
d. output on the x-axis, and input on the y-axis
a.
An isoquant is:
a. all combinations of two inputs that produce the same level of output
b. all combinations of two outputs that produce the same level of input
c. all combinations of two inputs that can be purchased at the same cost
d. all combinations of two outputs that can be produced with fixed inputs
a.
