Question Details

According to the theory of cost, specialization in the use of variable resources 


1.	The marginal rate of technical substitution may be defined as all of the following except:
a)	the rate at which one input may be substituted for another input in the production process, while total output remains constant
b)	equal to the negative slope of the isoquant at any point on the isoquant
c)	the rate at which all combinations of inputs have equal total costs
d)	equal to the ratio of the marginal products of X and Y
2.	The combinations of inputs costing a constant C dollars is called:
a)	an isocost line
b)	an isoquant curve
c)	the MRTS
d)	an isorevenue line
3.	____ are defined as costs which are incurred regardless of the alternative action chosen in a decision-making problem.
a)	Opportunity costs
b)	Marginal costs
c)	Relevant costs
d)	Sunk costs
4.	According to the theory of cost, specialization in the use of variable resources in the short-run results initially in:
a)	decreasing returns and declining average and marginal costs
b)	increasing returns and declining average and marginal costs
c)	increasing returns and increasing average and marginal costs
d)	decreasing returns and increasing average and marginal costs
5.	If TC = 321 + 55Q - 5Q2, then average total cost at Q = 10 is:
a)	10.2
b)	102
c)	37.1
d)	371
e)	321




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