Final Exam ECON 100C Fall 2014

Multiple Choice Identify the choice that best completes the statement or answers the question. ____ ____ 1.In the production function Y  F(K,L)  A K 1/3L 2/3 , A represents: a. an unknown b. the amount of capital in an economy c. the amount of labor in an economy d. a productivity parameter e. an error term 2. In the production model the firm’s profit maximization problem is: a. max F(r, w) – rK – wL d. max F(K, L) – rK – wL {r, w} {K, L} b. max rK + wL – F(K, L) e. All of these answers are correct. {K, L} c. max F(K, L) – rK – wL {r, w} Figure 4.4: Labor Market ID: A ____ 3.In Figure 4.4, MPL represents the ________, L represents the ________, and the intersection of the two yields ________. a. labor supply; labor demand; the equilibrium wage b. labor demand; labor supply; the equilibrium wage c. labor supply; labor demand; the equilibrium rental rate of capital d. labor demand; labor supply; the amount of capital hired e. None of these answers are correct.