In a production process, an excessive amount of the variable input relative to the fixed input is ...

In a production process, an excessive amount of the variable input relative to the fixed input is being used to produce the desired output. This statement is true for:
 a. stage II
  b. stages I and II
  c. when Ep = 1
  d. stage III
  e. none of the above

QUESTION 2

A solution to the budget-gaming problem is
 a. Introduce milestones or kinks in the compensation scheme
 b. Use a target based pay function with each target scoring greater return
  c. Do not base compensation on meeting a particular budget goal
 d. All of the above

QUESTION 3

Cost-reduction generate
 a. Increases in long-run profitability
  b. Increases in long-run profitability only if the cost reduction is difficult to imitate
  c. Increases in product differentiation
  d. Reduction in competitive intensity

QUESTION 4

Concerning the maximization of output subject to a cost constraint, which of the following statements (if any) are true?
 a. At the optimal input combination, the slope of the isoquant must equal the slope of the isocost line.
  b. The optimal solution occurs at the boundary of the feasible region of input combinations.
  c. The optimal solution occurs at the point where the isoquant is tangent to the isocost lines.
  d. all of the above
  e. none of the above

QUESTION 5

A solution to the budget-gaming problem is
 a. Remove all kinks from the compensation schedule
 b. Use a target based pay function with each target scoring greater return
  c. Base compensations on meeting particular budget goals
 d. All of the above

QUESTION 6

Low cost strategies are usually found in industries where
 a. Products are not particularly differentiated
  b. Price competition tends to be fierce
  c. Both a and b
  d. None of the above

QUESTION 7

Which of the following is never negative?
 a. marginal product
  b. average product
  c. production elasticity
  d. marginal rate of technical substitution
  e. slope of the isocost lines