Question 1

The average fixed cost curve slopes downward due to

Accepted Answer

A) diminishing marginal utility. 
B) diminishing marginal returns. 
C) technological inefficiency. 
D) economic inefficiency. 
E) none of the above. 
A) diminishing marginal utility. 
B) diminishing marginal returns. 
C) technological inefficiency. 
D) economic inefficiency. 
E) none of the above.

Question 2

If the marginal product of the fifth worker is 34,then the total product of five workers

Accepted Answer

A) is 35. 
B) is 24. 
C) is 170. 
D) is 6.8. 
E) cannot be calculated with the information given. 
A) is 35. 
B) is 24. 
C) is 170. 
D) is 6.8. 
E) cannot be calculated with the information given.

Question 3

The short run is a time frame in which

Accepted Answer

A) the firm is not able to hire more workers. 
B) the amount of output produced is fixed. 
C) there is a shortage of most factors of production. 
D) at least one factor of production is fixed. 
E) there is not enough time to make all of the decisions necessary to maximize profit. 
A) the firm is not able to hire more workers. 
B) the amount of output produced is fixed. 
C) there is a shortage of most factors of production. 
D) at least one factor of production is fixed. 
E) there is not enough time to make all of the decisions necessary to maximize profit.

Question 4

Which type of cost does not change as the quantity of output produced changes?

Accepted Answer

A) average total cost 
B) marginal cost 
C) average fixed cost 
D) total fixed cost 
E) Both C and D are correct. 
A) average total cost 
B) marginal cost 
C) average fixed cost 
D) total fixed cost 
E) Both C and D are correct.

Question 5

Marginal product

Accepted Answer

A) is always negative. 
B) is the slope of the total product curve. 
C) is always zero. 
D) lies between zero and one. 
E) equals average product minus total product. 
A) is always negative. 
B) is the slope of the total product curve. 
C) is always zero. 
D) lies between zero and one. 
E) equals average product minus total product.

Question 6

If ATC is falling,then MC must be

Accepted Answer

A) rising. 
B) falling. 
C) equal to ATC. 
D) above ATC. 
E) below ATC. 
A) rising. 
B) falling. 
C) equal to ATC. 
D) above ATC. 
E) below ATC.

Question 7

Use the figure below to answer the following question.
   Figure 11.3.1
-Refer to Figure 11.3.1.Which one of the following statements is false?

Accepted Answer

A) The total fixed cost curve A. 
B) Total variable cost and total cost both increase with output. 
C) The vertical gap between curves B and C is equal to total variable cost. 
D) Marginal cost is equal to the slope of curve C. 
E) Total fixed cost is constant. 
A) The total fixed cost curve A. 
B) Total variable cost and total cost both increase with output. 
C) The vertical gap between curves B and C is equal to total variable cost. 
D) Marginal cost is equal to the slope of curve C. 
E) Total fixed cost is constant.

Question 8

The AFC curve shifts upward if

Accepted Answer

A) factor prices rise. 
B) a new technology is introduced. 
C) more workers are hired. 
D) all of the above. 
E) none of the above. 
A) factor prices rise. 
B) a new technology is introduced. 
C) more workers are hired. 
D) all of the above. 
E) none of the above.

Question 9

Marginal product of labour is the increase in total product that results from a

Accepted Answer

A) one-unit increase in the quantity of labour employed,other inputs remaining the same. 
B) one-unit increase in the quantity of fixed inputs employed,holding the quantity of the variable inputs constant. 
C) one-unit increase in both the quantity of variable and fixed inputs. 
D) change in the cost of labour. 
E) 1 percent change in the quantity of labour and the quantity of capital employed. 
A) one-unit increase in the quantity of labour employed,other inputs remaining the same. 
B) one-unit increase in the quantity of fixed inputs employed,holding the quantity of the variable inputs constant. 
C) one-unit increase in both the quantity of variable and fixed inputs. 
D) change in the cost of labour. 
E) 1 percent change in the quantity of labour and the quantity of capital employed.

Question 10

The marginal cost curve slopes upward due to

Accepted Answer

A) diminishing marginal utility. 
B) diminishing marginal returns. 
C) technological inefficiency. 
D) economic inefficiency. 
E) none of the above. 
A) diminishing marginal utility. 
B) diminishing marginal returns. 
C) technological inefficiency. 
D) economic inefficiency. 
E) none of the above.

Question 11

Which one of the following is false?

Accepted Answer

A) The marginal cost curve intersects the average variable cost curve and the average total cost curve at their maximum points. 
B) When marginal cost is greater than average variable cost,average variable cost is increasing. 
C) When marginal cost is greater than average total cost,average total cost is increasing. 
D) The average total cost curve is U-shaped. 
E) The average fixed cost curve is downward sloping. 
A) The marginal cost curve intersects the average variable cost curve and the average total cost curve at their maximum points. 
B) When marginal cost is greater than average variable cost,average variable cost is increasing. 
C) When marginal cost is greater than average total cost,average total cost is increasing. 
D) The average total cost curve is U-shaped. 
E) The average fixed cost curve is downward sloping.

Question 12

Ernie's Earmuffs produces 200 earmuffs per year at a total cost of $2,000 and $400 of this cost is fixed.What is Ernie's total variable cost?

Accepted Answer

A) $400 
B) $8 
C) $2 
D) $2,400 
E) $1,600 
A) $400 
B) $8 
C) $2 
D) $2,400 
E) $1,600

Question 13

A firm will want to increase its scale of plant if

Accepted Answer

A) it is persistently producing on the upward-sloping part of its short-run average total cost curve. 
B) it is persistently producing on the downward-sloping part of its short-run average total cost curve. 
C) it is producing below minimum efficient scale. 
D) marginal cost is below average total cost. 
E) marginal cost is below average variable cost. 
A) it is persistently producing on the upward-sloping part of its short-run average total cost curve. 
B) it is persistently producing on the downward-sloping part of its short-run average total cost curve. 
C) it is producing below minimum efficient scale. 
D) marginal cost is below average total cost. 
E) marginal cost is below average variable cost.

Question 14

Suppose a 1-unit increase in labour,from 2 to 3 workers,increases output from 10 to 15 tea cups.The marginal product from the increase in the quantity of labour is

Accepted Answer

A) 1 tea cup. 
B) 3 tea cups. 
C) 4 tea cups. 
D) 5 tea cups. 
E) 15 tea cups. 
A) 1 tea cup. 
B) 3 tea cups. 
C) 4 tea cups. 
D) 5 tea cups. 
E) 15 tea cups.

Question 15

If constant returns to scale are present

Accepted Answer

A) average total cost is decreasing. 
B) average total cost is increasing. 
C) the LRAC curve is horizontal. 
D) the LRAC curve is downward sloping. 
E) the LRAC curve is upward sloping. 
A) average total cost is decreasing. 
B) average total cost is increasing. 
C) the LRAC curve is horizontal. 
D) the LRAC curve is downward sloping. 
E) the LRAC curve is upward sloping.

Question 16

Ernie's Earmuffs produces 200 earmuffs per year at a total cost of $2,000 and $400 of this cost is fixed.What is Ernie's average variable cost?

Accepted Answer

A) $400 
B) $8 
C) $2 
D) $2,400 
E) $1,600 
A) $400 
B) $8 
C) $2 
D) $2,400 
E) $1,600

Question 17

If the total product of four workers is 156,calculate the average product of each worker.

Accepted Answer

A) 39 
B) 19.5 
C) 78 
D) 152 
E) 624 
A) 39 
B) 19.5 
C) 78 
D) 152 
E) 624

Question 18

The range over which average variable cost is decreasing is the same as the range over which

Accepted Answer

A) marginal cost is increasing. 
B) average fixed cost is decreasing. 
C) marginal product is decreasing. 
D) average product is decreasing. 
E) average product is increasing. 
A) marginal cost is increasing. 
B) average fixed cost is decreasing. 
C) marginal product is decreasing. 
D) average product is decreasing. 
E) average product is increasing.

Question 19

Choose the correct statement.

Accepted Answer

A) Expenditure on a plant that has no resale value is a sunk cost. 
B) A sunk cost is irrelevant to a firm's current decisions. 
C) A cost that influences a firm's current decisions is the short-run cost of changing its labour inputs. 
D) A cost that influences a firm's current decisions is the long-run cost of changing its plant. 
E) All of the above. 
A) Expenditure on a plant that has no resale value is a sunk cost. 
B) A sunk cost is irrelevant to a firm's current decisions. 
C) A cost that influences a firm's current decisions is the short-run cost of changing its labour inputs. 
D) A cost that influences a firm's current decisions is the long-run cost of changing its plant. 
E) All of the above.

Question 20

Use the table below to answer the following questions.
Table 11.2.2
 $\begin{array}{lc}\hline \text { Labour } & \text { Output } \
\text { (workers per day) } & \text { (teapots per day) }\
\hline 0 & 0 \
1 & 2 \
2 & 8 \
3 & 12 \
4 & 15 \
5 & 16\\hline 
\end{array}$
-Refer to Table 11.2.2 which gives Tania's total product schedule.The average product when the firm hires three workers is

Accepted Answer

A) 1 teapot per worker. 
B) 2 teapots per worker. 
C) 3 teapots per worker. 
D) 4 teapots per worker. 
E) 12 teapots per worker. 
A) 1 teapot per worker. 
B) 2 teapots per worker. 
C) 3 teapots per worker. 
D) 4 teapots per worker. 
E) 12 teapots per worker.

The average fixed cost curve slopes downward due to

If the marginal product of the fifth worker is 34,then the total product of five workers

The short run is a time frame in which

Which type of cost does not change as the quantity of output produced changes?

Marginal product

If ATC is falling,then MC must be

Use the figure below to answer the following question. Figure 11.3.1 -Refer to Figure 11.3.1.Which one of the following statements is false?

The AFC curve shifts upward if

Marginal product of labour is the increase in total product that results from a

The marginal cost curve slopes upward due to

Which one of the following is false?

Ernie's Earmuffs produces 200 earmuffs per year at a total cost of $2,000 and $400 of this cost is fixed.What is Ernie's total variable cost?

A firm will want to increase its scale of plant if

Suppose a 1-unit increase in labour,from 2 to 3 workers,increases output from 10 to 15 tea cups.The marginal product from the increase in the quantity of labour is

If constant returns to scale are present

Ernie's Earmuffs produces 200 earmuffs per year at a total cost of $2,000 and $400 of this cost is fixed.What is Ernie's average variable cost?

If the total product of four workers is 156,calculate the average product of each worker.

The range over which average variable cost is decreasing is the same as the range over which

Choose the correct statement.

Use the table below to answer the following questions. Table 11.2.2 Labour Output (workers per day) (teapots per day) 0 0 1 2 2 8 3 12 4 15 5 16 -Refer to Table 11.2.2 which gives Tania's total product schedule.The average product when the firm hires three workers is

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

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Filters

Exam 11: Output and Costs

The average fixed cost curve slopes downward due to

If the marginal product of the fifth worker is 34,then the total product of five workers

The short run is a time frame in which

Which type of cost does not change as the quantity of output produced changes?

Marginal product

If ATC is falling,then MC must be

Use the figure below to answer the following question. Figure 11.3.1 -Refer to Figure 11.3.1.Which one of the following statements is false?

The AFC curve shifts upward if

Marginal product of labour is the increase in total product that results from a

The marginal cost curve slopes upward due to

Which one of the following is false?

Ernie's Earmuffs produces 200 earmuffs per year at a total cost of $2,000 and $400 of this cost is fixed.What is Ernie's total variable cost?

A firm will want to increase its scale of plant if

Suppose a 1-unit increase in labour,from 2 to 3 workers,increases output from 10 to 15 tea cups.The marginal product from the increase in the quantity of labour is

If constant returns to scale are present

Ernie's Earmuffs produces 200 earmuffs per year at a total cost of $2,000 and $400 of this cost is fixed.What is Ernie's average variable cost?

If the total product of four workers is 156,calculate the average product of each worker.

The range over which average variable cost is decreasing is the same as the range over which

Choose the correct statement.

Use the table below to answer the following questions. Table 11.2.2 Labour Output (workers per day) (teapots per day) 0 0 1 2 2 8 3 12 4 15 5 16 -Refer to Table 11.2.2 which gives Tania's total product schedule.The average product when the firm hires three workers is

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

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Filters