EAG 2018/2019 PRACTICE QUIZ 2

An educational illustration showing economic concepts like production fun<wbr>ctions, elasticity, and supply and demand graphs, in a clean and engaging style.

EAG 2018/2019 Practice Quiz 2

Welcome to the EAG 2018/2019 Practice Quiz 2! This quiz is designed to test your knowledge on economic concepts related to production, elasticity, and market dynamics.

Multiple choice questions covering key economic principles
Assess your understanding of labor and production functions
Challenge yourself with real-world economic scenarios

15 Questions4 MinutesCreated by EngagingEconomist27

Which of the following is an example of a capital input?

A. Money.

B. Shares of stock.

C. Long-term bonds.

D. A hammer.

Which of the following is an example of an intermediate product?

A. A personal computer.

B. A barrel of crude oil.

C. A sports car.

D. A house.

Which of the following is an assumption associated with the definition of a production function?

A. Technology remains constant.

B. Both inputs and outputs are measured in monetary units.

C. The function shows the maximum level of output possible with a given combination of inputs.

D. All units of the inputs are homogeneous.

The marginal product of labor is equal to

A. The additional labor required to produce one more unit of output.

B. Average product when average product is at a minimum.

C. The additional output produced by hiring one more unit of labor.

D. The slope of a ray drawn from the origin to a point on the total product curve.

The average product of labor is equal to

A. The additional labor required to produce one more unit of output.

B. Marginal product when average product is at a minimum.

C. The additional output produced by hiring one more unit of labor.

D. The slope of a ray drawn from the origin to a point on the total product curve.

The output elasticity of labor is

A. Equal to one at the level of output where average product is at a maximum.

B. The percentage change in labor required to produce one more unit of output.

C. Equal to the ratio of total product to the quantity of labor employed.

D. A measure of the percentage change in output that can result when the quantity of labor is held constant.

The point of inflection on the total product curve corresponds to the level of output where

A. Stage II of production begins.

B. Average product is at a maximum.

C. Marginal product is at a maximum.

D. All of the above are correct.

The law of diminishing returns

A. Is reflected in the negatively sloped portion of the marginal product curve.

B. Is the result of specialization and division of labor.

C. Applies in both the short run and the long run.

D. All of the above are correct.

Stage II of production begins at the point

A. Of inflection of the total product curve.

B. Where average and marginal product are equal.

C. Where total product is at a maximum.

D. Where marginal product is at a maximum.

The marginal revenue product of labor for a firm

A. Will increase if the price of the firm's output increases.

B. Is the firm's demand curve for labor.

C. Will decrease if the firm hires more labor.

D. All of the above are correct

Elasticity of supply refers to the degree of responsiveness of supply of a good to changes in its

A) Demand

b) Price

c) Cost of production

D) state of technology

A horizontal supply curve parallel to the quantity axis implies that the elasticity of supply is:

A) Zero

b) Infinite

C) Equal to one

d) greater than zero but less than one

If the equation for market demand is Qd= 1500-32p and market supply equation is 1200+43p, the equilibrium price and quantity in the market are:

A) 4 & 1372

B) 40 & 132.7

C) 4 & 137.2

D) 40 & 1372

If income elasticity of Demand is less than zero:

a) The good is an inferior good

b) The good is a luxury good

c) The good is a normal good

D) The good is a necessity

Q=a-bP

According to the function, the price elasticity of demand is,

a) -b

b) - 1/b • P/Q

c) P/Q

D) -b • P/Q

EAG 2018/2019 PRACTICE QUIZ 2

EAG 2018/2019 Practice Quiz 2

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