Question

1.If the total cost function is C(Q) = 15Q2+ 10, what is the marginal cost? 10/Q...

1.If the total cost function is C(Q) = 15Q2+ 10, what is the marginal cost?

10/Q

15Q

15Q+10/Q

30Q

None of these.

2.When a firm increased its output by one unit, its AFC decreased. This is an indication that

the law of diminishing returns has taken effect.

MC < AFC.

AVC < AFC.

the firm is spreading out its total fixed cost.

3.If the production function is f(L, K) = aL +2aK where a > 0 is a constant, L is for Labor and K is for Kapital, then the ratio of Marginal Product of Labor to Marginal Product of Capital is:

1/2

1

5

2

None of these are correct.

3. In any production process, the marginal product of labor equals

the change in output per unit change in labor for “small” changes in the amount of the labor input.

the value of total output minus the cost of fixed capital stock.

total output divided by total labor inputs.

the average output of the least skilled workers employed by the firm.

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