Question 1

Cost schedule  
-In the above table, when output increases from 8 to 12 units, the marginal cost of one of those 4 units is

Accepted Answer

A)  $1.20. 
B)  $2.00. 
C)  $5.00. 
D)  $15.00. 
A)  $1.20. 
B)  $2.00. 
C)  $5.00. 
D)  $15.00.

Question 2

When long-run average cost increases as output increases there are

Accepted Answer

A)  economies of scale. 
B)  diseconomies of scale. 
C)  constant returns to scale. 
D)  none of the above 
A)  economies of scale. 
B)  diseconomies of scale. 
C)  constant returns to scale. 
D)  none of the above

Question 3

A firm's long-run average cost curve is derived by adding together its short-run average total cost curves.

Accepted Answer

A) True 
 B)False

Question 4

If marginal cost is less than average total cost, then ________ is ________.

Accepted Answer

A)  average total cost; falling 
B)  average variable cost; falling 
C)  marginal cost; falling 
D)  marginal cost; rising 
A)  average total cost; falling 
B)  average variable cost; falling 
C)  marginal cost; falling 
D)  marginal cost; rising

Question 5

Poppy Lipstick is a lipstick producer. A decrease in the rent paid by Poppy Lipstick

Accepted Answer

A)  shifts its TFC curve downward but not its TVC curve. 
B)  shifts both its TFC curve and its TVC curve downward. 
C)  does not shift its TFC curve but shifts its TVC curve upward. 
D)  does not shift its TFC curve but shifts its TVC curve downward. 
A)  shifts its TFC curve downward but not its TVC curve. 
B)  shifts both its TFC curve and its TVC curve downward. 
C)  does not shift its TFC curve but shifts its TVC curve upward. 
D)  does not shift its TFC curve but shifts its TVC curve downward.

Question 6

-Are the curves in the figure above drawn correctly? If not, what's wrong?

Accepted Answer

The curves are not drawn correctly. Firs

Question 7

Cost schedule  
-In the above table, the average variable cost of producing 14 units of output is

Accepted Answer

A)  $0.175. 
B)  $5.71. 
C)  $7.86. 
D)  $10.00. 
A)  $0.175. 
B)  $5.71. 
C)  $7.86. 
D)  $10.00.

Question 8

What do economists mean when they say that a firm's plant is fixed?

Accepted Answer

The phrase that a "firm's plant is fixed

Question 9

-Based on the production data for Pat's Pizza Parlor in the above table, which worker has the largest marginal product?

Accepted Answer

A)  Worker 1 
B)  Worker 2 
C)  Worker 3 
D)  Worker 4 
A)  Worker 1 
B)  Worker 2 
C)  Worker 3 
D)  Worker 4

Question 10

The law of diminishing returns occurs because

Accepted Answer

A)  the marginal product of an additional worker is greater than the marginal product of the previous worker. 
B)  the marginal product of a variable input, such as labor, depends in part on the amount of fixed inputs, such as capital. 
C)  total production decreases as more of the variable inputs are used. 
D)  adding more and more workers leads to a decrease in the quantity of capital. 
A)  the marginal product of an additional worker is greater than the marginal product of the previous worker. 
B)  the marginal product of a variable input, such as labor, depends in part on the amount of fixed inputs, such as capital. 
C)  total production decreases as more of the variable inputs are used. 
D)  adding more and more workers leads to a decrease in the quantity of capital.

Question 11

When the marginal product of labor is below the average product of labor, the average product must increase when employment increases.

Accepted Answer

A) True 
 B)False

Question 12

Average total costs are total costs divided by

Accepted Answer

A)  total output. 
B)  total fixed costs. 
C)  total variable costs. 
D)  the total number of workers employed. 
A)  total output. 
B)  total fixed costs. 
C)  total variable costs. 
D)  the total number of workers employed.

Question 13

In the above figure, an unattainable point is

Accepted Answer

A)  a. 
B)  e. 
C)  g. 
D)  f. 
A)  a. 
B)  e. 
C)  g. 
D)  f.

Question 14

A firm's average variable cost is $60, its total fixed cost is $3,000, and its output is 600 units. Its average total cost is

Accepted Answer

A)  less than $58. 
B)  between $58 and $62. 
C)  between $62 and $64. 
D)  more than $64. 
A)  less than $58. 
B)  between $58 and $62. 
C)  between $62 and $64. 
D)  more than $64.

Question 15

A farmer discovers that the total cost of growing 50 acres of eggplant is $50,000 and that the total cost of growing 51 acres of eggplant is $52,000. The marginal cost of the 51st acre of eggplant is

Accepted Answer

A)  $52,000. 
B)  $50,000. 
C)  $2,000. 
D)  $1,000. 
A)  $52,000. 
B)  $50,000. 
C)  $2,000. 
D)  $1,000.

Question 16

With a technological change that increases productivity, the average product curve ________ and the marginal product curve ________.

Accepted Answer

A)  shifts upward; is unchanged 
B)  is unchanged; is unchanged 
C)  is unchanged; shifts upward 
D)  shifts upward; shifts upward 
A)  shifts upward; is unchanged 
B)  is unchanged; is unchanged 
C)  is unchanged; shifts upward 
D)  shifts upward; shifts upward

Question 17

Economies of scale refer to the range of output over which

Accepted Answer

A)  marginal cost exceeds average cost. 
B)  the long-run average cost falls as output increases. 
C)  the marginal product of labor diminishes. 
D)  the long-run average cost is lower than the short-run average total cost. 
A)  marginal cost exceeds average cost. 
B)  the long-run average cost falls as output increases. 
C)  the marginal product of labor diminishes. 
D)  the long-run average cost is lower than the short-run average total cost.

Question 18

The production and cost information provided in the table above for Flaming Fernando's, a restaurant that sells Fiery Frijoles, is for the

Accepted Answer

A)  short run because there are no variable costs. 
B)  short run because there is a fixed cost. 
C)  long run because there are no variable costs. 
D)  long run because there are no fixed costs. 
A)  short run because there are no variable costs. 
B)  short run because there is a fixed cost. 
C)  long run because there are no variable costs. 
D)  long run because there are no fixed costs.

Question 19

Diminishing marginal returns occurs when

Accepted Answer

A)  all inputs are increased and output decreases. 
B)  all inputs are increased and output increases by a smaller proportion. 
C)  a variable input is increased and output decreases. 
D)  a variable unit is increased and its marginal product falls. 
A)  all inputs are increased and output decreases. 
B)  all inputs are increased and output increases by a smaller proportion. 
C)  a variable input is increased and output decreases. 
D)  a variable unit is increased and its marginal product falls.

Question 20

The change in total cost from producing another unit of output equals the

Accepted Answer

A)  average total cost. 
B)  variable cost. 
C)  average variable cost. 
D)  marginal cost. 
A)  average total cost. 
B)  variable cost. 
C)  average variable cost. 
D)  marginal cost.

Exam 11: Output and Costs

Cost schedule -In the above table, when output increases from 8 to 12 units, the marginal cost of one of those 4 units is

When long-run average cost increases as output increases there are

A firm's long-run average cost curve is derived by adding together its short-run average total cost curves.

If marginal cost is less than average total cost, then ________ is ________.

Poppy Lipstick is a lipstick producer. A decrease in the rent paid by Poppy Lipstick

-Are the curves in the figure above drawn correctly? If not, what's wrong?

Cost schedule -In the above table, the average variable cost of producing 14 units of output is

What do economists mean when they say that a firm's plant is fixed?

-Based on the production data for Pat's Pizza Parlor in the above table, which worker has the largest marginal product?

The law of diminishing returns occurs because

When the marginal product of labor is below the average product of labor, the average product must increase when employment increases.

Average total costs are total costs divided by

In the above figure, an unattainable point is

A firm's average variable cost is $60, its total fixed cost is $3,000, and its output is 600 units. Its average total cost is

A farmer discovers that the total cost of growing 50 acres of eggplant is $50,000 and that the total cost of growing 51 acres of eggplant is $52,000. The marginal cost of the 51st acre of eggplant is

With a technological change that increases productivity, the average product curve ________ and the marginal product curve ________.

Economies of scale refer to the range of output over which

The production and cost information provided in the table above for Flaming Fernando's, a restaurant that sells Fiery Frijoles, is for the

Diminishing marginal returns occurs when

The change in total cost from producing another unit of output equals the

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices and Public Goods

Externalities and the Environment

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Extension A: Review

Extension B: Review

Extension C: Review

Extension D: Review

Extension E: Review

Extension F: Review

Filters

If marginal cost is less than average total cost, then is .

With a technological change that increases productivity, the average product curve and the marginal product curve .