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PPE611S - PRINCIPLES OF PRODUCTION - 1ST OPP - JUNE 2024 |
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nAmI BIAunIVERSITY
OF SCIEnCE Ano TECHnOLOGY
FACULTYOF HEALTH,NATURALRESOURCESAND APPLIEDSCIENCES
DEPARTMENTOF AGRICULTURALSCIENCESAND AGRIBUSINESS
QUALIFICATION: BACHELOROF SCIENCEIN AGRICULTURE
QUALIFICATION CODE:07BAGA
LEVEL: 7
COURSECODE: PPE611S
COURSENAME: PRINCIPLESOF PRODUCTION
ECONOMICS
SESSION:JUNE 2024
PAPER:1
DURATION: 3 HOURS
MARKS: 100
EXAMINER(S}
FIRSTOPPORTUNITYEXAMINATION QUESTION PAPER
DR DAVID UCHEZUBA
MODERATOR: DR THINAH MOYO
INSTRUCTIONS
1. This paper consists of three sections: Section A has 15 multiple-choice questions and 5
True or False questions. Section B is made up of four essay-type questions.
2. Answer ALL questions in blue or black ink.
3. Start each question on a new page in your answer booklet.
4. Questions relating to this paper may be raised in the initial 30 minutes after the start of
the examination. Thereafter, students must use their initiative to deal with any
perceived error or ambiguities & any assumption made should be clearly stated.
THIS QUESTION PAPERCONSISTSOF 9 PAGES(Including this front page)
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SECTIONA: MULTIPLECHOICEQUESTIONS
Question 1
The function, Log Y = log A+ b1log X1+ b2log X2+b3(log X1)2+b4(logX2)2+bs(log X1* log x2) is
an example of a
A). Cobb-Douglas function
B). Transcendental function
C). Quadratic function
D). Translog function
Question 2
Production activities that are independent of one another are known as
A). Homo-periodic production
B). Homothetic production
C). Homogenous production
D). Heterogenous production
Question 3
A firm has a technical efficiency of 81% and an allocative efficiency of 67.7%. What is the
production efficiency of this firm?
A).
13.3%
B). 12.9%
C). 12%
D).
23%
Question 4
Alternatively, the process of organising production activities to determine how the various
levels of inputs (factors, resources etc.) and outputs are combined while leaving other factors
constant. The phrase leaving other factors constant implies.
A). Certeris paribus
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B). Return to scale
C). Partial elasticity of substitution
D). Homogeneity to degree zero
Question 5
Output (TPP)transformed into dollar terms is known as
A). Total marginal value
B). Total value product
C). Total input value
D). Total value of marginal product
Question 6
When all inputs are increased proportionally, if output more than doubles.
A). Economies of scale exist
B). Diseconomies of scale exist
C). Both economies and diseconomies of scale exist
D). Neither economies nor diseconomies of scale exist
Question 7
Find the value of output (TPP)for the following production function, y = l6x + 3x2 -6 when
the input level is 2 units.
A). 22
B). 24
C). 25
D). 18
Question 8
Suppose a production is y = x + 4x-3x 3 • Find the function for the average physical
product.
A). y=8x-6x 2
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B). y=1+4-3x 2
C). y=l-8x-6x 2
D). y=l+4x-6x 2
Question 9
Which statement is incorrect? At the boundary of stage I and II,
A). The total physical product is increasing at an increasing rate.
B). The elasticity of production is equal to one.
C). The marginal and average physical products are equal.
D). The total physical product is increasing at a decreasing rate.
QuestionlO
Which of the following is correct about the total physical product (TPP) growth curve?
A). It is concave to the horizontal axis before the inflexion point, and convex to the
horizontal axis after inflexion.
B). It is convex to the horizontal axis before the inflexion point, and concave to the
horizontal axis at maximum TPP.
C). It is concave to the horizontal axis before the inflexion point, and concave to the
horizontal axis at maximum TPP.
D). It is convex to the horizontal axis before the inflexion point and convex to the
horizontal axis at maximum TPP.
Question 11
A function linking output to input is called.
A).
Production function
B).
Demand function
C). Aesthetic function
D). Anesthetic function
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Question 12
If input use increase by one unit and output increases by one unit. This implies.
A). No return to scale
B). Variable return to scale
C). Decreasing return to scale
D). Constant return to scale
Question 13
At maximum, the slope of total physical product is zero. This implies.
A). Diseconomies of scale
B). Average physical product is zero
C). Marginal physical product is zero
D). The elasticity of production is greater than one
Question 14
Which of the following is a measure of variable proportion?
A). The law of variable returns.
B). The law of diminishing return.
C). The law of constant returns.
D). The law of increasing returns.
Question 15
In a perfectly competitive market, price is given both at input and output market
A). at monopoly market only
B). at input market only
C). at both at input and output market
D). at output market only
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TRUE OR FALSEQUESTIONS
Indicate whether the question is True or False
Question 16 In long-run production, variable inputs are used to produce fixed level of
outputs. True or False?
Question 17. If the output price is constant, the total value product function has the same
shape as the total physical product function. True or False?
Question 18. Every point on the expansion path is a point of least cost combination. True
or False?
Question 19. All production functions are homogeneous. True or False?
Question 20. If elasticity of production is large this means marginal physical product is
large relative to average physical product. True or False?
SECTIONB: ESSAY-TYPEQUESTIONS
Question 1
1.1. Draw a neoclassical production map showing total, average and marginal productivities.
{2 Marks}
1.2. Using the map in question 1.1 above, explain the relationship between, the
1.2.1 Total Physical Product {TPP}
1.2.2. Average Physical product {APP}
1.2.3. Marginal Physical Product {MPP}
{9 Marks}
1.3. Explain the term "Economic region of production".
(1 Marks}
1.4. Explain why neoclassical production surface is a sigmoid curve and not an infinite
increasing productivity function.
{2 Marks}
1.5. Give reasons to explain why we undertake the following assumptions in production
economics.
1.5.1. Output homogeneity
{2 Marks}
1.5.2. Mono-periodic production
(2 Marks}
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1.5.3. Profit maximisation
(2 Marks)
Question 2
2.1. Determine whether each of the following production functions exhibits increasing,
constant or decreasing returns to scale.
a.
Q =l .Sxo.1yo.3
b. Q = 0.4x+0.5y
C.
Q = 2.0.xy
d.
Q = l .Ox0·6 y°5
e.
Q =2x 0.4y°.3
(10 Marks)
2.2. Determine if the following production functions are homogenous and, if so, the
degree of homogeneity.
a.
b.
Q = 2xo.s+ yos
C.
Q=--2~x3 + 3y3
6x2 - 2y 2
d.
Q = 3x 2y2-0.lx 3y3
e. Q = 2xo.s+ 3yo.1
Question 3
Consider the cost function.
VC = l SOQ- 6Q 2 + 0.3Q 3
1.1. If the fixed cost is N$150, determine the following cost functions.
(10 Marks)
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a). Total cost function
b). Average fixed cost
c). Average variable cost
d). Average total cost
e). Marginal cost
(10 Marks)
1.2. Using the above function, determine the value of Q that minimizes.
a). Average variable cost function
b). Marginal cost function
c).
Mr Jones produces corn from his ten-hectare plot of land with a loan of N$100 000.00
he got from the bank. He has a record of his yield and his total variable cost for five
production seasons. If the price of corn is N$8 and he pays N$100 instalment. Assuming
the loan is the only fixed investment complete the table below
Yield.
TVC
FC
TC
AVC
AFC
ATC
20
80
30
120
40
160
50
200
(10 Marks)
Question 4
4.1. Distinguish between the following concepts.
a). lsoquant and lsocost
b). Isocline and expansion path
c). Technical and Allocative efficiency
d). Production and productive efficiency
(8 Marks)
4.2. List the features of an lsoquant.
(4 Marks)
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4.3. Give reasons why an lsoquant line cannot cross.
4.4. Given the slope of lsoquant, and its rate of change, the nature of the lsoquant
patterns can be derived. State the conditions that define lsoquant patterns and state
the type of technical substitution that underlies the pattern.
(8 Marks)
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