AGEC 4000 Exam 1 2022/2023 with 100% correct answers

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When average physical product begins to decrease, you should always stop adding more input False If two products are competitive it is possible to produce more of one without decreasing the am ... ount produced of the other. False In the short-run fixed costs are paid whether or not a product is produced. True In the short run it is a good economic decision to produce at a loss so long as that loss is less than the fixed costs. True APP can never fall below 0. True All production functions have a stage 3. Falso If an input is free, it is a good economic decision to produce at the maximum yield. True The least-cost combination of inputs will change when prices double. False In stage I, APP is higher than MPP. False When an input is limited, the equal marginal principle is used to find the best combination of products to produce. True A production function shows the amount of physical product obtained with different: Levels of input If a farmer is producing at some point where MR is greater than MC and the amount of input available is not limited: Profit is not being maximized, more input should be used, more output should be produced Assume input A and input B can be used in combination to produce a fixed amount of output. If the price of input A decreases relative to that of input B, the new least-cost combination will: Include more of A and less of B If price of the output is $5 and the average cost at the point where MR=MC is $4, then Producer should produce and make a positive profit The combination of feed ingredients in a least-cost feed ration depends on all the following except: Selling price of the livestock At the point where MR=MC, output = 1000 units, output price = $8.20, AVC = $7.30 and TFC = $1.50: Produce to minimize losses (Loss is < output price) An isoquant curve will usually slope downward If two inputs have a constant substitution ratio, the least-cost combination will: generally be all of one input or all of the other There are increasing returns to size whenever increasing the output of the business results in: A smaller average cost per unit of output [Show More]

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