Question 1The marginal product of labor can be illustrated geometrically as the:Select one:A. slope of the total product curve with respect to laborB. slope of the total product curve with respect to capitalC. slope of a chord from the origin out to the total product curve at the specified level of laborD. inverse of the slope of a chord from the origin out to the total product curve at the specified level of laborE. slope of the total product curve with respect to labor divided by the slope of the total product curve with respect to capitalQuestion 2In the table below, the marginal product of labor at L = 6 is:Select one:A. 3B. 2C. 5 D. 4E. 1Question 3Output is produced according to Q = 4LK, where L is the quantity of labor input and K is the quantity of capital input. If the price of K is $10 and the price of L is $5, then the cost minimizing combination of K and L capable of producing 32 units of output is:Select one:A. L = 8 and K = 1B. L = 4 and K = 2C. L = 2 and K = 2D. L = 2 and K = 4E. L = 1 and K = 8Question 4If output is produced according to Q = 3K + 4L, then this production process exhibits:Select one:A. increasing returns to scaleB. decreasing returns to scaleC. first increasing and then decreasing returns to scaleD. constant returns to scaleE. first decreasing and then increasing returns to scaleQuestion 5Hedge Fun is a landscaping firm that specializes in topiary. Last year, the firm had 30 employees and served 120 customers. This year, it had 35 employees and served 135 customers. What is the marginal product of labor?Select one:A. 2B. 3C. 4D. 5E. none of the aboveQuestion 6Whenever average product is declining with increases in input usage:Select one:A. marginal product is less than average productB. total product is declining with increases in inputC. total product is increasing with increases in inputD. marginal product is greater than average productE. total product is at a maximumQuestion 7The law of diminishing marginal returns states that:Select one:A. the marginal product of labor declines as all inputs are increasedB. production functions exhibit decreasing returns to scaleC. the marginal product of labor returns as more capital is usedD. the marginal product of a factor eventually diminishes as more of the input is used, holding other inputs fixedE. the marginal product of a factor always diminishes as more of the input is used, holding other inputs fixedQuestion 8The optimal combination of two inputs, K and L, can be characterized by:Select one:A. PKMPK = PLMPLB. MPK = MPLC. PLMPK = PKMPLD. MPK/MPL = PL/PKE. none of the aboveQuestion 9The marginal rate of technical substitution between two inputs:Select one:A. shows the rate at which one input can be traded for another, holding output constantB. shows the efficient combination of inputsC. increases as we move down an isoquantD. shows the rate at which output can be increased by using more of both inputsE. shows the rate at which output decreases when using less of one of the inputsQuestion 10If output is produced according to Q = (KL)3/4, then this production process exhibits:Select one:A. increasing returns to scaleB. decreasing returns to scaleC. first increasing and then decreasing returns to scaleD. constant returns to scaleE. first decreasing and then increasing returns to scaleQuestion 11Output elasticity can be defined as the:Select one:A. percentage change in output divided by the (equal) percentage change in all inputsB. change in output divided by the change in all inputsC. change in inputs divided by the change in outputD. change in output divided by the change in one inputE. percentage change in output divided by the (average) percentage change in all inputsQuestion 12If output is produced according to Q = 30L + 12K, then the output elasticity is:Select one:A. 2B. 0C. 1D. 0.5E. 21