midterm 2

Question 1

if slope is positive

Answer 1

MPL or MPK Is increasing

Question 2

find slope by

Answer 2

setting to 0

Question 3

total product falls when

Answer 3

MPL is neg

Question 4

graph of prod func is linear and only labor

Answer 4

MPL is zero

Question 5

if MPL is above x-axis

Answer 5

output/total product is increasing

Question 6

as we move downward on isoquant

Answer 6

MRTS decreases

Question 7

MRTS is

Answer 7

negative of the slope of isoquant

Question 8

as labor increases and cap decreases

Answer 8

MPL falls while MPK rises

Question 9

isoquants usually drawn with convex shape because

Answer 9

inputs are not perfectly suitable

Question 10

if isoquants is steep

Answer 10

MRTS is high

Question 11

leontieff function

Answer 11

proportion type

Question 12

when L is useless

Answer 12

isoquant is horizontal

Question 13

perfect substitutes

Answer 13

downward sloping straight

Question 14

leontief graph is

Answer 14

L-shaped

Question 15

MC crosses ATC at

Answer 15

lowest point

Question 16

if MC >ATC

Answer 16

ATC is increasing

Question 17

if TC increase at increasing rate

Answer 17

MPL is diminishing

Question 18

if budget decreases

Answer 18

isocost shifts inward

Question 19

if price of cap declines

Answer 19

isocost will be steeper

Question 20

wage decreases

Answer 20

slope gets smaller

Question 21

profit maximization in long run

Answer 21

set mpl/mpk = w/r

Question 22

VC =

Answer 22

wL + rK