Question Details

Concerning the maximization of output subject to a cost constraint



1.	In a relationship among total, average and marginal products, where TP is maximized:
a.	AP is maximized
b.	AP is equal to zero
c.	MP is maximized
d.	MP is equal to zero
e.	none of the above


	

	2.	Holding the total output constant, the rate at which one input X may be substituted for another input Y in a production process is:
a.	the slope of the isoquant curve
b.	the marginal rate of technical substitution (MRTS)
c.	equal to MPx/MPy
d.	all of the above
e.	none of the above


	

	3.	Which of the following is never negative?
a.	marginal product
b.	average product
c.	production elasticity
d.	marginal rate of technical substitution
e.	slope of the isocost lines


	

	4.	Concerning the maximization of output subject to a cost constraint, which of the following statements (if any) are true?
a.	At the optimal input combination, the slope of the isoquant must equal the slope of the isocost line.
b.	The optimal solution occurs at the boundary of the feasible region of input combinations.
c.	The optimal solution occurs at the point where the isoquant is tangent to the isocost lines.
d.	all of the above
e.	none of the above


	

	5.	In a production process, an excessive amount of the variable input relative to the fixed input is being used to produce the desired output. This statement is true for:
a.	stage II
b.	stages I and II
c.	when Ep = 1
d.	stage III
e.	none of the above




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