1. Total factor productivity (TFP) can be considered a measure of:

i)Technology

ii)Number of inputs required to produce an output iii)Total output

iv)Labor-to-Capital ratio

1. All other things being equal, as total factor productivity (TFP) increases:

i)The marginal product of capital decreases

ii)Total output decreases

iii)The marginal product of labor increases

iv)Output remains the same

1. To maximize profits, a price taking firm will produce at:

i)A point that minimizes total costs

ii)A point at which marginal revenue is equal to marginal cost iii)A point that maximizes total revenue

iv)A point total revenue is equal to total cost

1. If a firm doubles its levels of capital and labor and sees a tripling of production, does the firm exhibit:

i)Decreasing returns to scale

ii)Constant returns to scale

iii)Increasing returns to scale iv)Both ii) and iii)

1. If wages decrease, what happens to the isocost line?

i)It stays the same

ii)It moves inward

iii)The labor intersect moves outward

iv)The capital intersect moves inward

1. When a firm's budget decreases, what happens to the isocost line?

i)It stays the same

ii)It moves inward

iii)The labor intersect moves outward

iv)The capital intersect moves inward

1. If a firm exhibit decreasing returns to scale compared to constant returns to scale, isoquant lines are:

i)Closer together

ii)Further apart

iii)The same

1. Why do linear production functions not work in practice?

i)Constant increasing returns to scale

ii)Additive separability

iii)Subtractive continuity

1. If the wage rate is 9 and the capital unit cost is 6, the marginal rate of technical substitution is:

i) 0.667

ii) 0.444

iii) 1.5

iv) 2.25