Production economics UE Past Papers Questions.

The derived demand curve is;

1. The portion of the average cost curve where the slope is positive
2. The portion of the marginal revenue curve where the slope is positive
3. The portion of the marginal cost curve above the variable cost curve
4. None of the above is true.

Answer / Solution

UNSOLVED

A farmer at Mikese Morogoro establishes that during the last year tomato production was such that the marginal revenue was higher than marginal cost. The farmer should;

1. Reduce the level of fixed variable inputs to reduce production cost
2. Reduce the level of fixed variable inputs to reduce production cost
3. Increase the level of inputs up to the optimum level
4. Set a higher price for the product to increase total revenue

Answer / Solution

UNSOLVED

A producer is a price taker in the factor market because;

1. Their demand for inputs is too small to influence the market price
2. They are too many to compete
3. They produce according to the law of supply and demand
4. They are rational producers

Answer / Solution

UNSOLVED

Given the total cost function 120Y-Y² +0.002Y³ . Where Y is output. If the product price is 200SHS, the producer is not making any profit because;

1. The marginal revenue is lower than the average total cost
2. The marginal revenue is equal to minimum average variable cost
3. The product price is lower than the minimum average total cost
4. None of the above is true

Answer / Solution

UNSOLVED

For producer with the production function;

Y=2X+2X²-0.4X³ where X=input and Y=output ; Unitary elasticity of production is attained as the coordinates (x,y)

1. (10,210)
2. (25,675)
3. (20,220)
4. None of the above is true.

Answer / Solution

UNSOLVED