Producer Theory (Cardinal & Ordinal)

In cardinal producer theory, total product increases as long as:

• Marginal product is zero

• Marginal product is negative

• Marginal product is positive

• Total cost falls

• Price is constant

The law of diminishing marginal returns states:

• Total output always increases

• Additional output decreases after a certain point

• Inputs are unlimited

• Revenue always increases

• Marginal product rises

When MP = 0, total product is:

• Rising

• Maximized

• Falling

• Negative

• Not measurable

Which is a valid cardinal concept in production?

• Isoquant

• Indifference curve

• Marginal product

• MRS

• Utility

Average product is maximized when:

• MP = 0

• MP > AP

• MP = AP

• TP is falling

• TC is constant

Total product decreases when:

• MP > 0

• MP = 0

• MP < AP, then:

• AP rises

• AP falls

The stages of production based on MP and AP include:

• Three stages

• Four stages

• Two stages

• Only one stage

• Zero stages

The marginal product of labor refers to:

• Output per worker

• Total product

• Additional output from one more worker

• Fixed cost

• Utility

In cardinal production theory, a rational firm operates in:

• Stage I

• Stage II

• Stage III

• All stages

• No stage

If TP rises from 50 to 70 when labor increases from 4 to 5, find MP.

• 15

• 20

• 25

• 10

• 30