Page 589 - Krugmans Economics for AP Text Book_Neat

Quantity of electricity (kilowatts) Quantity of ice (pounds)
0 0
1 1,000
2 1,800
3 2,400
4 2,800

Tackle the Test: Multiple-Choice Questions

1. A production function shows the relationship between 4. Diminishing returns to an input ensures that as a firm
inputs and continues to produce, the total product curve will have
a. fixed costs. what kind of slope? Section 10 Behind the Supply Curve: Profit, Production, and Costs
b. variable costs. a. negative decreasing
c. total revenue. b. positive decreasing
d. output. c. negative increasing
e. profit. d. positive increasing
e. positive constant
2. Which of the following defines the short run?
a. less than a year 5. Historically, the limits imposed by diminishing returns have
b. when all inputs are fixed been alleviated by
c. when no inputs are variable a. investment in capital.
d. when only one input is variable b. increases in the population.
e. when at least one input is fixed c. discovery of more land.
d. Thomas Malthus.
3. The slope of the total product curve is also known as
e. economic models.
a. marginal product.
b. marginal cost.
c. average product.
d. average revenue.
e. profit.

Tackle the Test: Free-Response Questions

1. Draw a correctly labeled graph of a production function that
1 point: Graph with vertical axis labeled “Quantity of output” or “Q” and
exhibits diminishing returns to labor. Assume labor is the
horizontal axis labeled “Quantity of labor” or “L”
variable input and capital is the fixed input. Explain how your
graph illustrates diminishing returns to labor. 1 point: Upward sloping curve labeled “Total product” or “TP”
1 point: The slope of the total product curve is positive and decreasing
Answer (4 points)
1 point: Explanation that a positive and decreasing slope illustrates
diminishing returns to labor because each additional unit of labor increases
Quantity
of output TP total product by less than the previous unit of labor
2. Use the data in the table below to graph the production
function and the marginal product of labor. Do the data
illustrate diminishing returns to labor? Explain.
Quantity of labor Quantity of output
L Q
0 0
1 19
2 36
3 51
4 64
Quantity 5 75
of labor
6 84
7 91
8 96

module 54 The Production Function 547