Question 1

If a firm's marginal product of labor is less than its average product of labor, then an increase in the quantity of labor it employs definitely will

Accepted Answer

A)  decrease its total product. 
B)  decrease its average product of labor. 
C)  increase its marginal product of labor. 
D)  not change its average product of labor. 
A)  decrease its total product. 
B)  decrease its average product of labor. 
C)  increase its marginal product of labor. 
D)  not change its average product of labor.

Question 2

-The above (incomplete) table provides information about the relationships between labor and various product measures. The average product of the fourth unit of labor

Accepted Answer

A)  exceeds the marginal product of the fourth unit of labor. 
B)  is less than the marginal product of the fourth unit of labor. 
C)  is equal to the marginal product of the fourth unit of labor. 
D)  is equal to 4.0. 
A)  exceeds the marginal product of the fourth unit of labor. 
B)  is less than the marginal product of the fourth unit of labor. 
C)  is equal to the marginal product of the fourth unit of labor. 
D)  is equal to 4.0.

Question 3

-In the above figure, between 20 and 25 units per hour, the firm experiences

Accepted Answer

A)  economies of scale. 
B)  diseconomies of scale. 
C)  constant returns to scale. 
D)  increasing total fixed costs. 
A)  economies of scale. 
B)  diseconomies of scale. 
C)  constant returns to scale. 
D)  increasing total fixed costs.

Question 4

For each short-run average total cost curve, the ________ the plant, the ________ is the output at which average total cost is at a ________.

Accepted Answer

A)  larger; greater; maximum 
B)  larger; greater; minimum 
C)  larger; smaller; minimum 
D)  smaller; smaller; minimum 
A)  larger; greater; maximum 
B)  larger; greater; minimum 
C)  larger; smaller; minimum 
D)  smaller; smaller; minimum

Question 5

Some of the cost curves for Ike's Ice Cream Kitchen are given in the above figure. At which of the following levels of output does the marginal product of labor equal the average product of labor?

Accepted Answer

A)  at 0 gallons 
B)  at 10 gallons 
C)  at 40 gallons 
D)  at 60 gallons 
A)  at 0 gallons 
B)  at 10 gallons 
C)  at 40 gallons 
D)  at 60 gallons

Question 6

-In the figure above, the marginal product of the second worker is

Accepted Answer

A)  10 units. 
B)  5 units. 
C)  2 units. 
D)  1 units. 
A)  10 units. 
B)  5 units. 
C)  2 units. 
D)  1 units.

Question 7

-The above table shows the total product schedule for the campus book store. If employees are paid $6 per hour, assuming there are no other variable costs, then the average variable cost of selling books will reach its minimum at

Accepted Answer

A)  58 books sold per hour. 
B)  59 books sold per hour. 
C)  73 books sold per hour. 
D)  83 books sold per hour. 
A)  58 books sold per hour. 
B)  59 books sold per hour. 
C)  73 books sold per hour. 
D)  83 books sold per hour.

Question 8

-The average total cost curves for plants A, B, C and D are shown in the above figure. Which plant is best to use to produce 20 units per day?

Accepted Answer

A)  plant A 
B)  plant B 
C)  plant C 
D)  plant D 
A)  plant A 
B)  plant B 
C)  plant C 
D)  plant D

Question 9

A firm's total cost in the short run is the sum of its fixed cost plus its variable cost plus its marginal cost.

Accepted Answer

A) True 
 B)False

Question 10

A firm's average total cost is $100, its average variable cost is $90, and its total fixed cost is $1,000. Its output is

Accepted Answer

A)  less than 70 units. 
B)  between 70 and 120 units. 
C)  between 120 and 170 units. 
D)  more than 170 units. 
A)  less than 70 units. 
B)  between 70 and 120 units. 
C)  between 120 and 170 units. 
D)  more than 170 units.

Question 11

When there are diminishing marginal returns to labor, the marginal product of the last worker hired must be negative.

Accepted Answer

A) True 
 B)False

Question 12

-The average total cost curves for plants A, B, C and D are shown in the above figure. Which plant is best to use to produce 60 units per day?

Accepted Answer

A)  plant A 
B)  plant B 
C)  plant C 
D)  plant D 
A)  plant A 
B)  plant B 
C)  plant C 
D)  plant D

Question 13

Minneapolis business Rogue Chocolatier sells specialty chocolate bars with a high cocoa content. The price of cocoa beans had shot up 44 percent in the first nine months of 2008. How does this affect Rogue's short run costs?

Accepted Answer

A)  Short run variable costs would increase. 
B)  Short run fixed costs would decrease. 
C)  Short run total costs would decrease. 
D)  Short run average fixed costs would increase. 
A)  Short run variable costs would increase. 
B)  Short run fixed costs would decrease. 
C)  Short run total costs would decrease. 
D)  Short run average fixed costs would increase.

Question 14

-The table above gives production information for Bob's Baseball Cap Company. Bob's total cost when zero caps are produced is $200 and workers cost $10 per hour. The marginal cost per hat of producing 30 hats per hour (instead of 25) is

Accepted Answer

A)  $240.00 per hat. 
B)  $250.00 per hat. 
C)  $8.33 per hat. 
D)  $2.00 per hat. 
A)  $240.00 per hat. 
B)  $250.00 per hat. 
C)  $8.33 per hat. 
D)  $2.00 per hat.

Question 15

-The above table gives some production and cost information for Flaming Fernando's, a restaurant that sells Fiery Frijoles. What is the average total cost of producing 4,500 frijoles?

Accepted Answer

A)  $2 
B)  $225 
C)  $9000 
D)  More information is needed to determine the answer. 
A)  $2 
B)  $225 
C)  $9000 
D)  More information is needed to determine the answer.

Question 16

-Silvio's Pizza is a small pizzeria. The firm's production function is shown in the table above. Suppose that Silvio's costs include only the cost of renting ovens, which is $100 per oven per week, the labor cost, $280 per worker per week, and the opportunity cost of Silvio's entrepreneurship, $1,000 per week. Suppose Silvio's uses Plant 1 and hires 3 workers. What is the firm's average fixed cost?

Accepted Answer

A)  $4.33 
B)  $8.40 
C)  $19.40 
D)  $11.00 
A)  $4.33 
B)  $8.40 
C)  $19.40 
D)  $11.00

Question 17

Which of the following would be classified as a fixed cost for the local supermarket?

Accepted Answer

A)  The cost of the boxes of cereal sold in the store. 
B)  The salary and any overtime paid the store's manager. 
C)  The rent from the six-year lease for the building the store uses. 
D)  The Social Security tax the store pays the federal government on the workers' income. 
A)  The cost of the boxes of cereal sold in the store. 
B)  The salary and any overtime paid the store's manager. 
C)  The rent from the six-year lease for the building the store uses. 
D)  The Social Security tax the store pays the federal government on the workers' income.

Question 18

-The above figure shows the costs at Barney's Bagel Bakery. At which of the following amounts of output is the AFC be the lowest?

Accepted Answer

A)  at 2000 bagels 
B)  at 3000 bagels 
C)  at 3500 bagels 
D)  None of the above because the AFC is constant regardless of how many bagels are produced each day. 
A)  at 2000 bagels 
B)  at 3000 bagels 
C)  at 3500 bagels 
D)  None of the above because the AFC is constant regardless of how many bagels are produced each day.

Question 19

Average product equals the

Accepted Answer

A)  increase in output that results from a one-unit increase in the quantity of labor employed with all other inputs remaining the same. 
B)  total amount of output produced. 
C)  total amount of output produced divided by the quantity of labor employed. 
D)  total amount of output produced divided by price of the output. 
A)  increase in output that results from a one-unit increase in the quantity of labor employed with all other inputs remaining the same. 
B)  total amount of output produced. 
C)  total amount of output produced divided by the quantity of labor employed. 
D)  total amount of output produced divided by price of the output.

Question 20

In the above figure, the most efficient way to produce 15 units is to hire

Accepted Answer

A)  2 workers. 
B)  3 workers. 
C)  4 workers. 
D)  5 workers. 
A)  2 workers. 
B)  3 workers. 
C)  4 workers. 
D)  5 workers.

Exam 11: Output and Costs

If a firm's marginal product of labor is less than its average product of labor, then an increase in the quantity of labor it employs definitely will

-The above (incomplete) table provides information about the relationships between labor and various product measures. The average product of the fourth unit of labor

-In the above figure, between 20 and 25 units per hour, the firm experiences

For each short-run average total cost curve, the ________ the plant, the ________ is the output at which average total cost is at a ________.

Some of the cost curves for Ike's Ice Cream Kitchen are given in the above figure. At which of the following levels of output does the marginal product of labor equal the average product of labor?

-In the figure above, the marginal product of the second worker is

-The above table shows the total product schedule for the campus book store. If employees are paid $6 per hour, assuming there are no other variable costs, then the average variable cost of selling books will reach its minimum at

-The average total cost curves for plants A, B, C and D are shown in the above figure. Which plant is best to use to produce 20 units per day?

A firm's total cost in the short run is the sum of its fixed cost plus its variable cost plus its marginal cost.

A firm's average total cost is $100, its average variable cost is $90, and its total fixed cost is $1,000. Its output is

When there are diminishing marginal returns to labor, the marginal product of the last worker hired must be negative.

-The average total cost curves for plants A, B, C and D are shown in the above figure. Which plant is best to use to produce 60 units per day?

Minneapolis business Rogue Chocolatier sells specialty chocolate bars with a high cocoa content. The price of cocoa beans had shot up 44 percent in the first nine months of 2008. How does this affect Rogue's short run costs?

-The table above gives production information for Bob's Baseball Cap Company. Bob's total cost when zero caps are produced is $200 and workers cost $10 per hour. The marginal cost per hat of producing 30 hats per hour (instead of 25) is

-The above table gives some production and cost information for Flaming Fernando's, a restaurant that sells Fiery Frijoles. What is the average total cost of producing 4,500 frijoles?

Which of the following would be classified as a fixed cost for the local supermarket?

-The above figure shows the costs at Barney's Bagel Bakery. At which of the following amounts of output is the AFC be the lowest?

Average product equals the

In the above figure, the most efficient way to produce 15 units is to hire

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

For each short-run average total cost curve, the the plant, the is the output at which average total cost is at a .