Question 1
Both MPL and MPK are constant
MPL is increasing but MPK is constant
MPL is decreasing and MPK is constant
Both MPL and MPK are decreasing
Managerial Economics Quiz 1: 7 July 2024 (May 2024 term)
The IIT Madras BS Managerial Economics (Managerial Economics) Quiz 1 paper sat on 7 Jul 2024, in the May 2024 term: 19 questions for 25 marks in 120 minutes. Every question is below with its answer. Take it as a timed mock test to be marked, or read it through first.
- 19
- 25
- 120 min
- 13
- 6
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Correct answer
MPL is decreasing and MPK is constant
Question 2
A firm can always trade three units of labour for one unit of capital and still keep output constant. The production technology for this firm can most suitably represented by
Cobb-Douglas production function
Leontief production function
Linear production function
None
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Correct answer
Linear production function
Question 3
A firm finds that it requires exactly two full-time workers to operate each piece of machinery in the factory. The production technology for this firm can most suitably represented by
Cobb-Douglas production function
Leontief production function
Linear production function
None
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Correct answer
Leontief production function
Question 4
The marginal product of labour is defined as
a firm’s total output divided by total labour input
the extra output produced by employing one more unit of labour while allowing other inputs to vary
the extra output produced by employing one more unit of labour while holding other inputs constant
the extra output produced by employing one more unit of capital while holding labour input constant
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Correct answer
the extra output produced by employing one more unit of labour while holding other inputs constant
Question 5
If marginal costs equal average total costs
average total costs are falling
average total costs are maximized
average total costs are rising
average total costs are minimized
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Correct answer
average total costs are minimized
Question 6
5, 20
20, 5
20, 10
10, 20
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Correct answer
20, 5
Question 7
The short-run cost function of a company is given by the equation TC = 200 + 55q, where TC is the total cost and q is the total quantity of output.
Based on the above data, answer the given subquestions.
What is the company’s fixed cost?__________
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Correct answer: 200
Question 8
The short-run cost function of a company is given by the equation TC = 200 + 55q, where TC is the total cost and q is the total quantity of output.
Based on the above data, answer the given subquestions.
If the company produced 100 units of goods, what would be its average variable cost? ___________
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Correct answer: 55
Question 9
Based on the above data, answer the given subquestions.
What is the opportunity cost of filling this order (i.e., selling these cartons to the fraternity)? _____________ (in $)
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Correct answer: 25
Question 10
Based on the above data, answer the given subquestions.
Should you sell the Fritos to the fraternity?
YES
NO
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Correct answer
YES
Question 11
The slope of the budget line is
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Correct answer
Question 12
Intercepts on the axis are
50 on X-axis and 100 on Y-axis
100 on X-axis and 50 on Y-axis
50 on X-axis and 20 on Y-axis
20 on X-axis and 50 on Y-axis
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Correct answer
50 on X-axis and 100 on Y-axis
Question 13
If keeping income unchanged, price of the coconut is halved, what will be the new slope of the budget line
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Correct answer
Question 14
New intercepts on the axis are
50 on X-axis and 50 on Y-axis
100 on X-axis and 50 on Y-axis
100 on X-axis and 100 on Y-axis
10 on X-axis and 100 on Y-axis
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Correct answer
100 on X-axis and 100 on Y-axis
Question 15
If income is halved keeping the original prices unchanged
Slope remains same and both intercepts are doubled
Slope remains same and both intercepts are halved
Slope changes and both intercepts are doubled
Slope changes and both intercepts remain same
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Correct answer
Slope remains same and both intercepts are halved
Question 16
Based on the above data, answer the given subquestions.
If the firm is currently using 3 hours of labour for each hour of machine time, is it minimizing its costs of production?
YES
NO
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Correct answer
NO
Question 17
Based on the above data, answer the given subquestions.
If not, what will be the optimal combination of labour and capital. L* = _________
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Correct answer: 0
Question 18
Based on the above data, answer the given subquestions.
If not, what will be the optimal combination of labour and capital. K* = _________
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Correct answer: 4
Question 19
The marginal product of labour in the production of chips is 50 kg chips per hour. The marginal rate of technical substitution of hours of labour for hours of machine capital is 1/4.
What is the marginal product of capital in kg per hour? (only write the no.) __________
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Correct answer: 200