1. Production costs are constant along an isoquant. a. True b. False

2. A map of isoquants provides a full description of the technology used by a producer. a. True b. False

3. Changing labels on the isoquants without changing the shapes of the isoquants implies no change in the underlying technology as long as the ordering of isoquants is preserved. a. True b. False

4. Suppose that at a given input combination the marginal product of labour is 8 and the marginal product of capital is 2. What is the TRS at that input combination? (Note: Unless otherwise stated, in this subject the TRS is the technical rate of substitution of labour with respect to capital, i.e. the TRS is the slope of the isoquant at a given input combination when the isoquant is represented in a graph with labour on the horizontal axis and capital on the vertical axis.)

a. -1/4

b. -16

c. -4

d. None of these

5. Suppose you find that at a given input bundle the TRS=-1/2. Then you can conclude that at that input bundle:

a. labour is more productive than capital

b. capital is more productive than labour

c. labour and capital are equally productive

d. there is not enough information to answer

6. Consider the map of isoquants below. Based on the information in the graph, what can you conclude about the technology of the producer?

a. It is characterized by constant returns to scale

b. It is characterized by increasing returns to scale

c. It is characterized by decreasing returns to scale

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