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5. Assume that beer is a normal good. If the price of beer rises, then the substitution effect results in the person buying of the good and the income effect results in the person buying of the good. A. more, more B. more, less C. less, more D. less, less 6. Which of the following is true regarding income along a price-consumption curve? A. Income is increasing. B. Income is decreasing. C. Income is constant. D. The level of income depends on the level of utility. 7. Joe's coffee house produces coffee drinks under the production function q = 5KL where q is the number of cups generated per hour, K is the number of coffee machines (capital), and L is the number of employees hired per hour (labor). What is the average product of labor(APL)? A. APL = 5 B. APL = 5K C. APL = 5L D. APL = 5K/L 8. Suppose a hotel exhibits constant returns to scale as it increases its output. If it increases all its inputs by 10%, its: A. total cost will increase by less than 10% B. average total cost will increase by 10% C. output will increase by 10%. D. long run average cost curve will shift to the right by 10%. 9. The marginal rate of technical substitution of labor for capital (MRTSLK) is defined as the rate at which the quantity of_ A. capital can be increased for every one unit increase in the quantity of labor B. capital can be increased if the quantity of labor remains the same C. labor can be reduced as capital costs increase D. capital can be reduced for every one unit increase in the quantity of labor

5. Assume that beer is a normal good. If the price of beer rises, then the substitution effect results in the person buying of the good and the income effect results in the person buying of the good. A. more, more B. more, less C. less, more D. less, less 6. Which of the following is true regarding income along a price-consumption curve? A. Income is increasing. B. Income is decreasing. C. Income is constant. D. The level of income depends on the level of utility. 7. Joe's coffee house produces coffee drinks under the production function q = 5KL where q is the number of cups generated per hour, K is the number of coffee machines (capital), and L is the number of employees hired per hour (labor). What is the average product of labor(APL)? A. APL = 5 B. APL = 5K C. APL = 5L D. APL = 5K/L 8. Suppose a hotel exhibits constant returns to scale as it increases its output. If it increases all its inputs by 10%, its: A. total cost will increase by less than 10% B. average total cost will increase by 10% C. output will increase by 10%. D. long run average cost curve will shift to the right by 10%. 9. The marginal rate of technical substitution of labor for capital (MRTSLK) is defined as the rate at which the quantity of_ A. capital can be increased for every one unit increase in the quantity of labor B. capital can be increased if the quantity of labor remains the same C. labor can be reduced as capital costs increase D. capital can be reduced for every one unit increase in the quantity of labor

Principles of Microeconomics (MindTap Course List)
Principles of Microeconomics (MindTap Course List)
8th Edition
ISBN:9781305971493
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter21: The Theory Of Consumer Choice
Section: Chapter Questions
Problem 5CQQ
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5. Assume that beer is a normal good. If the price of beer rises, then the substitution effect results in the person buying of the good and the income effect results in the person buying of the good. A. more, more B. more, less C. less, more D. less, less 6. Which of the following is true regarding income along a price-consumption curve? A. Income is increasing. B. Income is decreasing. C. Income is constant. D. The level of income depends on the level of utility. 7. Joe's coffee house produces coffee drinks under the production function q = 5KL where q is the number of cups generated per hour, K is the number of coffee machines (capital), and L is the number of employees hired per hour (labor). What is the average product of labor(APL)? A. APL = 5 B. APL = 5K C. APL = 5L D. APL = 5K/L 8. Suppose a hotel exhibits constant returns to scale as it increases its output. If it increases all its inputs by 10%, its: A. total cost will increase by less than 10% B. average total cost will increase by 10% C. output will increase by 10%. D. long run average cost curve will shift to the right by 10%. 9. The marginal rate of technical substitution of labor for capital (MRTSLK) is defined as the rate at which the quantity of_ A. capital can be increased for every one unit increase in the quantity of labor B. capital can be increased if the quantity of labor remains the same C. labor can be reduced as capital costs increase D. capital can be reduced for every one unit increase in the quantity of labor
Transcribed Image Text:5. Assume that beer is a normal good. If the price of beer rises, then the substitution effect results in the person buying of the good and the income effect results in the person buying of the good. A. more, more B. more, less C. less, more D. less, less 6. Which of the following is true regarding income along a price-consumption curve? A. Income is increasing. B. Income is decreasing. C. Income is constant. D. The level of income depends on the level of utility. 7. Joe's coffee house produces coffee drinks under the production function q = 5KL where q is the number of cups generated per hour, K is the number of coffee machines (capital), and L is the number of employees hired per hour (labor). What is the average product of labor(APL)? A. APL = 5 B. APL = 5K C. APL = 5L D. APL = 5K/L 8. Suppose a hotel exhibits constant returns to scale as it increases its output. If it increases all its inputs by 10%, its: A. total cost will increase by less than 10% B. average total cost will increase by 10% C. output will increase by 10%. D. long run average cost curve will shift to the right by 10%. 9. The marginal rate of technical substitution of labor for capital (MRTSLK) is defined as the rate at which the quantity of_ A. capital can be increased for every one unit increase in the quantity of labor B. capital can be increased if the quantity of labor remains the same C. labor can be reduced as capital costs increase D. capital can be reduced for every one unit increase in the quantity of labor
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