Question

2) MRTS or Marginal rate of technical substitution (MRTS) for an isoquant is defined as Δ capital / Δ labor, which in turn means that, MRTS will be of higher value when labor is more productive than capital.

Select one:

True

False

3) Regression techniques could involve the issue of 'heteroscedasticity' meaning unequal scatter. This issue is important only when regression is used for demand estimation and not when we use the technique for demand forecasting.

Select one:

True

False

4) One fundamental problem that arises in the empirical estimation of cost functions from available data from the past is that opportunity costs must be extracted from the available accounting cost data.

Select one:

True

False

5) The minimum level of output (i.e., scale of operation) that achieves all available economies of scale is called the minimum efficient scale (MES). At this point:

Select one:

a. The firm is not creating any social costs

b. All costs of the firm are necessarily explicit and accounted for

c. The firm is operating at the lowest possible per-unit cost in long run

d. Diseconomies will not set in even when level of output is increased after MES point

6) While the simple regression model which is based on a linear relation between Y and X, in large part because estimating the parameters of a linear model is relatively simple statistically; for those cases where Y and X are instead related in a curvilinear fashion, a simple transformation of the variables often makes it possible to model nonlinear relations within the framework of the linear regression model.

True

False

Answer 1

(2) Torne that as implies in twin Because MRTS =- i which implies the slopes down word which in twin implies labor increases, its slope decreases & gets flattes. mats will be of loma value when we need. more laben to replace 1 unit of capital .. Similarly, mats will be of higher value when we need less labon than capital.