Question 1

Which of the following best describes the main goal of a firm, according to the standard microeconomic model presented in the slides?

Accepted Answer

To minimize the cost of producing a given quantity of output

Question 2

In the short run, which of the following statements about a firm's input choices is correct?

Accepted Answer

The firm can only change the amount of labor it uses, not capital

Question 3

Suppose a firm's short-run production function is $$f_{SR}(L) = 2L$$^{1/2}$$. What is the marginal product of labor (MP_L$) for this production function?

Accepted Answer

$$MP_L = L$$^{-1/2}$$

Question 4

Which of the following best explains the law of diminishing marginal product of labor?

Accepted Answer

As more labor is added, the marginal product of labor eventually decreases

Question 5

Given the production function $$Q = 2K + 3L$$, what is the marginal product of capital ($$MP_K$$)?

Accepted Answer

$$MP_K = 2$$

Question 6

If a firm’s average product of labor ($$AP_L) is $$increasing, which of the following must be true?

Accepted Answer

The marginal product of labor ($$MP_L) is $$greater than the average product of labor ($$AP_L)$$

Question 7

A firm is operating in the short run with a fixed amount of capital. If it hires more workers, what will happen to the marginal product of labor ($$MP_L) $$after a certain point, assuming technology is constant?

Accepted Answer

It will eventually decrease

Question 8

Which of the following is the correct mathematical definition of the marginal product of labor ($$MP_L$$)?

Accepted Answer

$$MP_L = \frac{\partial Q}{\partial L}$$

Question 9

Suppose a firm’s short-run production function is $$f_{SR}(L) = 2L$$^{1/2}$$. If the firm employs 16 workers, what is the average product of labor (AP_L$)?

Accepted Answer

$$AP_L = 0.5$$

Question 10

Which of the following is NOT an assumption made in the standard model of the firm as described in the slides?

Accepted Answer

The firm can freely choose both capital and labor in the short run

Question 11

If the marginal product of labor ($$MP_L) is $$less than the average product of labor ($$AP_L$$), what will happen to the average product as more labor is added?

Accepted Answer

The average product will decrease

Question 12

A real-world example: A coffee shop adds more baristas to a fixed number of espresso machines. According to the law of diminishing marginal product, what is likely to happen?

Accepted Answer

Each new barista will add less additional output than the previous one

Question 13

Which of the following is the correct formula for the average product of labor ($$AP_L$$)?

Accepted Answer

$$AP_L = \frac{Q}{L}$$

Question 14

If a firm’s production function is $$Q = \min\{2K, 3L\}$$, what does this imply about the relationship between capital and labor?

Accepted Answer

Capital and labor are used in fixed proportions

Question 15

Which of the following is a limitation of the standard model of the firm as described in the slides?

Accepted Answer

It ignores real-world complexities such as recruitment strategies and organizational structure

Question 16

Suppose a firm’s short-run production function is $$f_{SR}(L) = 2L$$^{1/2}$$. What is the marginal product of labor when L = 4$?

Accepted Answer

$$MP_L = 1$$

Question 17

If a firm’s marginal product of labor ($$MP_L) is $$initially increasing as more labor is hired, what could explain this phenomenon?

Accepted Answer

Workers are able to specialize and become more efficient

Question 18

Which of the following best describes the relationship between marginal product of labor ($$MP_L) $$and average product of labor ($$AP_L$$)?

Accepted Answer

When $$MP_L \u003e AP_L$$, $$AP_L is $$rising

Question 19

A firm’s production function is $$Q = L$$^{0.5}$$K^{0.5}$. If the firm doubles both labor and capital, what happens to output?

Accepted Answer

Output exactly doubles

Question 20

In the context of the slides, which of the following is NOT typically included as a capital input?

Accepted Answer

Raw materials

Production Functions and Firm Behavior in Microeconomics

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