Question 1

What does a firm's short-run total product curve show and what is its significance?

Accepted Answer

A short-run total product curve shows th

Question 2

-Ajax Manufacturing has a fixed scale of plant with the levels of total product given in the table for different levels of labor. Complete the table by calculating the average product and marginal product.

Accepted Answer

@#IMG-DLM& The compl

Question 3

-The cost data in the above table data show that production is characterized by

Accepted Answer

A)  economies of scale. 
B)  constant returns to scale. 
C)  decreasing returns to scale. 
D)  More information is needed to answer the question. 
A)  economies of scale. 
B)  constant returns to scale. 
C)  decreasing returns to scale. 
D)  More information is needed to answer the question.

Question 4

Which of the following statements is true?

Accepted Answer

A)  If average product equals marginal product, average product decreases. 
B)  If marginal product equals average product, average product is a maximum. 
C)  If marginal product equals average product, marginal product is a maximum. 
D)  If marginal product exceeds average product, marginal product increases. 
A)  If average product equals marginal product, average product decreases. 
B)  If marginal product equals average product, average product is a maximum. 
C)  If marginal product equals average product, marginal product is a maximum. 
D)  If marginal product exceeds average product, marginal product increases.

Question 5

-Cindy's Sweaters' production function is shown in the above table. Cindy rents two knitting machines for $30 a day each and hires workers at a wage rate of $40 a day. If Cindy produces 18 sweaters per day, what is her average total cost?

Accepted Answer

A)  $6.67 
B)  $10.00 
C)  $11.00 
D)  $13.33 
A)  $6.67 
B)  $10.00 
C)  $11.00 
D)  $13.33

Question 6

Marginal cost is

Accepted Answer

A)  all the costs of the fixed inputs. 
B)  all the costs of production of goods. 
C)  all the costs that vary with output. 
D)  the change in the total cost resulting from a one-unit change in output. 
A)  all the costs of the fixed inputs. 
B)  all the costs of production of goods. 
C)  all the costs that vary with output. 
D)  the change in the total cost resulting from a one-unit change in output.

Question 7

Sticky Cakes is a bakery. A decrease in the wage rate that Sticky Cakes pays its workers

Accepted Answer

A)  does not shift its MC curve or its ATC curve. 
B)  shifts its MC curve downward but not its ATC curve. 
C)  shifts both its MC curve and its ATC curve downward. 
D)  does not shift its MC curve but shifts its ATC curve downward. 
A)  does not shift its MC curve or its ATC curve. 
B)  shifts its MC curve downward but not its ATC curve. 
C)  shifts both its MC curve and its ATC curve downward. 
D)  does not shift its MC curve but shifts its ATC curve downward.

Question 8

The total output produced with any quantity of labor is equal to the sum of the

Accepted Answer

A)  marginal products of each of the workers hired. 
B)  average products of each of the workers hired. 
C)  total wages the firm pays its workers. 
D)  Both answers A and B are correct. 
A)  marginal products of each of the workers hired. 
B)  average products of each of the workers hired. 
C)  total wages the firm pays its workers. 
D)  Both answers A and B are correct.

Question 9

The output at which average product is a maximum is the same output at which ________ is a minimum.

Accepted Answer

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

Question 10

Which of the following is correct?

Accepted Answer

A)  A firm's short-run average cost curve is derived from a series of long-run average cost curves. 
B)  A firm's long-run average cost curve is derived from a series of short-run average cost curves. 
C)  A firm's long-run total cost is the difference between its long-run fixed cost and long-run variable cost. 
D)  Both answers A and C are correct. 
A)  A firm's short-run average cost curve is derived from a series of long-run average cost curves. 
B)  A firm's long-run average cost curve is derived from a series of short-run average cost curves. 
C)  A firm's long-run total cost is the difference between its long-run fixed cost and long-run variable cost. 
D)  Both answers A and C are correct.

Question 11

-In the figure above, when 40 units are produced the average fixed cost is

Accepted Answer

A)  $4. 
B)  $8. 
C)  $12. 
D)  $20. 
A)  $4. 
B)  $8. 
C)  $12. 
D)  $20.

Question 12

Decent Donuts  
-Based on the data in the table above, what is the average product of labor when Decent Donuts employs five workers?

Accepted Answer

A)  16.66 dozen donuts per day 
B)  17.2 dozen donuts per day 
C)  20 dozen donuts per day 
D)  22 dozen donuts per day 
A)  16.66 dozen donuts per day 
B)  17.2 dozen donuts per day 
C)  20 dozen donuts per day 
D)  22 dozen donuts per day

Question 13

Cost schedule  
-In the above table, the total fixed cost is

Accepted Answer

A)  $0. 
B)  $20. 
C)  $30. 
D)  $50. 
A)  $0. 
B)  $20. 
C)  $30. 
D)  $50.

Question 14

-The above table shows the short-run total product schedule for the campus book store. What is the marginal product (MP) of going from 5 to 6 employees at the book store?

Accepted Answer

A)  83 books sold 
B)  13.83 books sold 
C)  10 books sold 
D)  between 11 and 14 books sold 
A)  83 books sold 
B)  13.83 books sold 
C)  10 books sold 
D)  between 11 and 14 books sold

Question 15

-Based on the above production data table for Ken's Pizza Parlor, we know that the average product of labor curve begins to decrease after hiring worker ________.

Accepted Answer

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

Question 16

-In the above table, diminishing marginal returns start to occur when the

Accepted Answer

A)  3rd worker is employed. 
B)  4th worker is employed. 
C)  5th worker is employed. 
D)  6th worker is employed. 
A)  3rd worker is employed. 
B)  4th worker is employed. 
C)  5th worker is employed. 
D)  6th worker is employed.

Question 17

-In the above figure, as output increases, the distance between curves B and C decreases because

Accepted Answer

A)  total cost decreases as output increases. 
B)  average fixed cost decreases as output increases. 
C)  there are diminishing returns to average total cost. 
D)  there are increasing marginal costs as output increases. 
A)  total cost decreases as output increases. 
B)  average fixed cost decreases as output increases. 
C)  there are diminishing returns to average total cost. 
D)  there are increasing marginal costs as output increases.

Question 18

-Dustin's copy shop can use four alternative plants. The figure above shows the average total cost curves for Plant 1 (ATC1), Plant 2 (ATC2), Plant 3 (ATC3), and Plant 4 (ATC4).What is Dustin's long-run average cost if the output is 3,000 copies per day?

Accepted Answer

A)  3.7 cents per copy 
B)  5.0 cents per copy 
C)  8.5 cents per copy 
D)  More information is needed to determine the long-run average cost. 
A)  3.7 cents per copy 
B)  5.0 cents per copy 
C)  8.5 cents per copy 
D)  More information is needed to determine the long-run average cost.

Question 19

-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. When Silvio's uses 2 ovens and hires the 3rd worker, the marginal product of labor is ________ the average product of labor, and therefore the average product of labor ________.

Accepted Answer

A)  less than; decreases 
B)  less than; increases 
C)  greater than; decreases 
D)  greater than; increases 
A)  less than; decreases 
B)  less than; increases 
C)  greater than; decreases 
D)  greater than; increases

Question 20

When marginal cost is greater than average cost, average cost decreases as output increases.

Accepted Answer

A) True 
 B)False

Exam 11: Output and Costs

What does a firm's short-run total product curve show and what is its significance?

-Ajax Manufacturing has a fixed scale of plant with the levels of total product given in the table for different levels of labor. Complete the table by calculating the average product and marginal product.

-The cost data in the above table data show that production is characterized by

Which of the following statements is true?

-Cindy's Sweaters' production function is shown in the above table. Cindy rents two knitting machines for $30 a day each and hires workers at a wage rate of $40 a day. If Cindy produces 18 sweaters per day, what is her average total cost?

Marginal cost is

Sticky Cakes is a bakery. A decrease in the wage rate that Sticky Cakes pays its workers

The total output produced with any quantity of labor is equal to the sum of the

The output at which average product is a maximum is the same output at which ________ is a minimum.

Which of the following is correct?

-In the figure above, when 40 units are produced the average fixed cost is

Decent Donuts -Based on the data in the table above, what is the average product of labor when Decent Donuts employs five workers?

Cost schedule -In the above table, the total fixed cost is

-The above table shows the short-run total product schedule for the campus book store. What is the marginal product (MP) of going from 5 to 6 employees at the book store?

-Based on the above production data table for Ken's Pizza Parlor, we know that the average product of labor curve begins to decrease after hiring worker ________.

-In the above table, diminishing marginal returns start to occur when the

-In the above figure, as output increases, the distance between curves B and C decreases because

-Dustin's copy shop can use four alternative plants. The figure above shows the average total cost curves for Plant 1 (ATC1), Plant 2 (ATC2), Plant 3 (ATC3), and Plant 4 (ATC4).What is Dustin's long-run average cost if the output is 3,000 copies per day?

When marginal cost is greater than average cost, average cost decreases as output increases.

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

-Dustin's copy shop can use four alternative plants. The figure above shows the average total cost curves for Plant 1 (ATC₁), Plant 2 (ATC₂), Plant 3 (ATC₃), and Plant 4 (ATC₄).What is Dustin's long-run average cost if the output is 3,000 copies per day?