Question 1

A firm's total fixed cost is $100.If total cost is $200 for one unit of output and $310 for two units,what is the marginal cost of the second unit?

Accepted Answer

A) $100 
B) $110 
C) $200 
D) $210 
E) $310 
A) $100 
B) $110 
C) $200 
D) $210 
E) $310

Question 2

The law of diminishing marginal returns states:

Accepted Answer

A) As the size of a plant increases,marginal product eventually decreases. 
B) As the size of a firm's plant increases,average cost eventually decreases. 
C) As a firm uses more of a variable factor of production,with a given quantity of the fixed factor of production,the marginal product of the variable factor eventually diminishes. 
D) As a firm uses more of a variable factor of production,its average cost eventually decreases. 
E) As a firm uses more of a variable factor or production,total product eventually decreases. 
A) As the size of a plant increases,marginal product eventually decreases. 
B) As the size of a firm's plant increases,average cost eventually decreases. 
C) As a firm uses more of a variable factor of production,with a given quantity of the fixed factor of production,the marginal product of the variable factor eventually diminishes. 
D) As a firm uses more of a variable factor of production,its average cost eventually decreases. 
E) As a firm uses more of a variable factor or production,total product eventually decreases.

Question 3

The ATC 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 4

Which one of the following statements is false?

Accepted Answer

A) Average total cost is total cost per unit of output. 
B) Average fixed cost plus average variable cost equals average total cost. 
C) Marginal cost is the increase in total cost resulting from a one-unit increase in output. 
D) Total cost equals fixed cost plus average cost. 
E) Marginal cost depends on the amount of labour hired. 
A) Average total cost is total cost per unit of output. 
B) Average fixed cost plus average variable cost equals average total cost. 
C) Marginal cost is the increase in total cost resulting from a one-unit increase in output. 
D) Total cost equals fixed cost plus average cost. 
E) Marginal cost depends on the amount of labour hired.

Question 5

When the marginal product of labour is less than the average product of labour,

Accepted Answer

A) the average product of labour is increasing. 
B) the marginal product of labour is increasing. 
C) the total product curve is negatively sloped. 
D) the firm is experiencing diminishing marginal returns. 
E) None of the above. 
A) the average product of labour is increasing. 
B) the marginal product of labour is increasing. 
C) the total product curve is negatively sloped. 
D) the firm is experiencing diminishing marginal returns. 
E) None of the above.

Question 6

Sue's Surfboards rents the factory building in which it produces surfboards.The rent is increased by $200 a week.If other things remain the same,the average fixed cost curve ________,the average variable cost curve ________,the average total cost curve ________,and the marginal cost curve ________.

Accepted Answer

A) does not change;shifts upward;shifts upward;shifts upward 
B) shifts upward;does not change;shifts upward;does not change 
C) shifts upward;does not change;does not change;shifts upward 
D) shifts upward;does not change;shifts upward;shifts upward 
E) shifts upward;shifts upward;shifts upward;shifts upward 
A) does not change;shifts upward;shifts upward;shifts upward 
B) shifts upward;does not change;shifts upward;does not change 
C) shifts upward;does not change;does not change;shifts upward 
D) shifts upward;does not change;shifts upward;shifts upward 
E) shifts upward;shifts upward;shifts upward;shifts upward

Question 7

Use the figure below to answer the following questions.
   Figure 11.4.1
-Refer to Figure 11.4.1 which shows the total product curves for four different plant sizes as Tania varies the quantity of capital and workers.The curve that represents the plant using the largest amount of capital is

Accepted Answer

A) plant A. 
B) plant B. 
C) plant C. 
D) plant D. 
E) all curves because each plant uses the same number of machines,just different amounts of labour. 
A) plant A. 
B) plant B. 
C) plant C. 
D) plant D. 
E) all curves because each plant uses the same number of machines,just different amounts of labour.

Question 8

Use the table below to answer the following questions.
Table 11.3.2
 $\begin{array}{ccccc}\hline\text { Labour }&\text { Output }&TFC&TVC&TC\
\text { (workers per }&\text { (teapots per }&\text { (dollars per }&\text { (dollars per }&\text { (dollars per }\
\text { day) } & \text { day) } & \text { day) } & \text { day) }& \text { day) }\
\hline 0 & 0 & 30 & 0 & 30 \
1 & 3 & 30 & 20 & -- \
2 & 8 & 30 & 40 & -- \
3 & 12 & 30 & 60 & -- \
4 & 14 & 30 & -- & 110 \
5 & 15 & 30 & -- & 130\\hline
\end{array}$
-Refer to Table 11.3.2,which gives Tania's total cost schedule.The average total cost of producing 14 teapots is

Accepted Answer

A) $7.86. 
B) $6.75. 
C) $7. 
D) $1.75. 
E) $27.50. 
A) $7.86. 
B) $6.75. 
C) $7. 
D) $1.75. 
E) $27.50.

Question 9

Use the figure below to answer the following questions.
   Figure 11.2.1
-Refer to Figure 11.2.1 which illustrates Tania's total product curve.Which one of the following statements is true?

Accepted Answer

A) The points above the curve are attainable and inefficient. 
B) The points below the curve are attainable and inefficient. 
C) The points below the curve are inefficient and unattainable. 
D) The points on the curve are efficient and unattainable. 
E) Marginal product is equal at every point on the total product curve. 
A) The points above the curve are attainable and inefficient. 
B) The points below the curve are attainable and inefficient. 
C) The points below the curve are inefficient and unattainable. 
D) The points on the curve are efficient and unattainable. 
E) Marginal product is equal at every point on the total product curve.

Question 10

When the marginal product curve is ________,the marginal cost curve is falling.When the average product curve is ________,the average variable cost curve is falling.Maximum MP occurs at the same output as ________.Maximum AP occurs at the same output as ________.

Accepted Answer

A) rising;rising;maximum MC;maximum AVC 
B) falling;falling;minimum MC;minimum AVC 
C) rising;rising;minimum MC;minimum AVC 
D) falling;falling;maximum MC;maximum AVC 
E) rising;rising;minimum MC;minimum ATC 
A) rising;rising;maximum MC;maximum AVC 
B) falling;falling;minimum MC;minimum AVC 
C) rising;rising;minimum MC;minimum AVC 
D) falling;falling;maximum MC;maximum AVC 
E) rising;rising;minimum MC;minimum ATC

Question 11

Total cost is $20 at 4 units of output and $36 at 6 units of output.Between 4 and 6 units of output,marginal cost

Accepted Answer

A) is less than average total cost. 
B) is equal to average total cost. 
C) is equal to average variable cost. 
D) is greater than average total cost. 
E) equals average fixed cost. 
A) is less than average total cost. 
B) is equal to average total cost. 
C) is equal to average variable cost. 
D) is greater than average total cost. 
E) equals average fixed cost.

Question 12

Use the table below to answer the following questions.
Table 11.3.1
 $\begin{array}{ccccc}\hline\text { Labour }&\text { Output }&TFC&TVC&TC\
\text { (workers per }&\text { (teapots per }&\text { (dollars per }&\text { (dollars per }&\text { (dollars per }\
\text { day) } & \text { day) } & \text { day) } & \text { day) }& \text { day) }\
\hline 0 & 0 & 20 & 0 & 20 \
1 & 4 & 20 & -- & 45 \
2 & 9 & 20 & -- & 70 \
3 & 13 & 20 & -- & 95 \
4 & 16 & 20 & 100 & -- \
5 & 18 & 20 & 125 & 145\\hline
\end{array}$
-Refer to Table 11.3.1,which gives Tania's total cost schedule.The average total cost of producing 16 teapots per day is

Accepted Answer

A) $2. 
B) $5. 
C) $3.33. 
D) $7.50. 
E) $5.51. 
A) $2. 
B) $5. 
C) $3.33. 
D) $7.50. 
E) $5.51.

Question 13

Use the table below to answer the following question.
Table 11.2.4
 $$\begin{array} { c c } 
\hline\begin{array} { c } 
\text { Number of } \
\text { Workers }
\end{array} & \begin{array} { c } 
\text { Total Product } \
\text { (baskets of corn) }
\end{array} \
\hline 1 & 0 \
2 & 3 \
3 & 7 \
4 & 10 \
5 & 12 \
\hline
\end{array}$$
-Refer to Table 11.2.4.The table gives the total product schedule of workers who harvest corn.Diminishing marginal returns begin when the ________ is hired.

Accepted Answer

A) 1st labourer 
B) 2nd labourer 
C) 3rd labourer 
D) 4th labourer 
E) There are no diminishing marginal returns since total product always rises. 
A) 1st labourer 
B) 2nd labourer 
C) 3rd labourer 
D) 4th labourer 
E) There are no diminishing marginal returns since total product always rises.

Question 14

The marginal cost (MC)curve intersects the

Accepted Answer

A) ATC,AVC,and AFC curves at their minimum points. 
B) ATC and AFC curves at their minimum points. 
C) AVC and AFC curves at their minimum points. 
D) ATC and AVC curves at their minimum points. 
E) TC and TVC curves at their minimum points. 
A) ATC,AVC,and AFC curves at their minimum points. 
B) ATC and AFC curves at their minimum points. 
C) AVC and AFC curves at their minimum points. 
D) ATC and AVC curves at their minimum points. 
E) TC and TVC curves at their minimum points.

Question 15

A production function is the relationship between the maximum output attainable and the

Accepted Answer

A) price of output. 
B) change in technology. 
C) demand for output. 
D) quantities of inputs used. 
E) amount of labour used. 
A) price of output. 
B) change in technology. 
C) demand for output. 
D) quantities of inputs used. 
E) amount of labour used.

Question 16

Refer to the table below to answer the following questions.
Table 11.2.1
 $$\begin{array} { c c } 
\hline \begin{array} { c } 
\text { Labour } \
\text { (workersper day) }
\end{array} & \begin{array} { c } 
\text { Output } \
\text { (teapots per day) }
\end{array} \
\hline 0 & 0 \
1 & 3 \
2 & 12 \
3 & 19 \
4 & 23 \
5 & 25 \
\hline
\end{array}$$
-Refer to Table 11.2.1 which gives Tania's total product schedule.The marginal product when the number of workers increases from 1 to 2 is

Accepted Answer

A) 3 teapots. 
B) 12 teapots. 
C) 7 teapots. 
D) 9 teapots. 
E) 6 teapots. 
A) 3 teapots. 
B) 12 teapots. 
C) 7 teapots. 
D) 9 teapots. 
E) 6 teapots.

Question 17

Diminishing marginal returns refers to a situation where the ________ of an additional worker is less than the ________ of the previous worker.

Accepted Answer

A) marginal cost;marginal cost 
B) average cost;average cost 
C) marginal product;marginal product 
D) average product;average product 
E) marginal product;average product 
A) marginal cost;marginal cost 
B) average cost;average cost 
C) marginal product;marginal product 
D) average product;average product 
E) marginal product;average product

Question 18

If an increase in output from 5 to 10 teapots increases total cost from $100 to $200,the marginal cost of one of those 5 teapots is

Accepted Answer

A) $10. 
B) $20. 
C) $22. 
D) $25. 
E) dependent upon the amount of extra labour used. 
A) $10. 
B) $20. 
C) $22. 
D) $25. 
E) dependent upon the amount of extra labour used.

Question 19

The short run refers to a time period

Accepted Answer

A) of one year or less. 
B) in which all factors of production are variable. 
C) in which all factors of production are fixed. 
D) in which some factors of production are variable,but at least one factor of production is. 
E) in which all factors of production are variable,but the technology is fixed. 
A) of one year or less. 
B) in which all factors of production are variable. 
C) in which all factors of production are fixed. 
D) in which some factors of production are variable,but at least one factor of production is. 
E) in which all factors of production are variable,but the technology is fixed.

Question 20

The law of diminishing marginal returns refers to the tendency for ________ to eventually decrease as more labour is employed,everything else remaining the same.

Accepted Answer

A) average total cost 
B) marginal cost 
C) total product 
D) marginal product of labour 
E) average product of labour 
A) average total cost 
B) marginal cost 
C) total product 
D) marginal product of labour 
E) average product of labour

A firm's total fixed cost is $100.If total cost is $200 for one unit of output and $310 for two units,what is the marginal cost of the second unit?

The law of diminishing marginal returns states:

The ATC curve shifts upward if

Which one of the following statements is false?

When the marginal product of labour is less than the average product of labour,

Sue's Surfboards rents the factory building in which it produces surfboards.The rent is increased by $200 a week.If other things remain the same,the average fixed cost curve ,the average variable cost curve ,the average total cost curve ,and the marginal cost curve .

Use the figure below to answer the following questions. Figure 11.4.1 -Refer to Figure 11.4.1 which shows the total product curves for four different plant sizes as Tania varies the quantity of capital and workers.The curve that represents the plant using the largest amount of capital is

Use the figure below to answer the following questions. Figure 11.2.1 -Refer to Figure 11.2.1 which illustrates Tania's total product curve.Which one of the following statements is true?

When the marginal product curve is ,the marginal cost curve is falling.When the average product curve is ,the average variable cost curve is falling.Maximum MP occurs at the same output as .Maximum AP occurs at the same output as .

Total cost is $20 at 4 units of output and $36 at 6 units of output.Between 4 and 6 units of output,marginal cost

Use the table below to answer the following question. Table 11.2.4 Number of Workers Total Product (baskets of corn) 1 0 2 3 3 7 4 10 5 12 -Refer to Table 11.2.4.The table gives the total product schedule of workers who harvest corn.Diminishing marginal returns begin when the ________ is hired.

The marginal cost (MC)curve intersects the

A production function is the relationship between the maximum output attainable and the

Refer to the table below to answer the following questions. Table 11.2.1 Labour (workersper day) Output (teapots per day) 0 0 1 3 2 12 3 19 4 23 5 25 -Refer to Table 11.2.1 which gives Tania's total product schedule.The marginal product when the number of workers increases from 1 to 2 is

Diminishing marginal returns refers to a situation where the of an additional worker is less than the of the previous worker.

If an increase in output from 5 to 10 teapots increases total cost from $100 to $200,the marginal cost of one of those 5 teapots is

The short run refers to a time period

The law of diminishing marginal returns refers to the tendency for ________ to eventually decrease as more labour is employed,everything else remaining the same.

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

A firm's total fixed cost is $100.If total cost is $200 for one unit of output and $310 for two units,what is the marginal cost of the second unit?

The law of diminishing marginal returns states:

The ATC curve shifts upward if

Which one of the following statements is false?

When the marginal product of labour is less than the average product of labour,

Sue's Surfboards rents the factory building in which it produces surfboards.The rent is increased by $200 a week.If other things remain the same,the average fixed cost curve ________,the average variable cost curve ________,the average total cost curve ________,and the marginal cost curve ________.

Use the figure below to answer the following questions. Figure 11.4.1 -Refer to Figure 11.4.1 which shows the total product curves for four different plant sizes as Tania varies the quantity of capital and workers.The curve that represents the plant using the largest amount of capital is

Use the figure below to answer the following questions. Figure 11.2.1 -Refer to Figure 11.2.1 which illustrates Tania's total product curve.Which one of the following statements is true?

When the marginal product curve is ________,the marginal cost curve is falling.When the average product curve is ________,the average variable cost curve is falling.Maximum MP occurs at the same output as ________.Maximum AP occurs at the same output as ________.

Total cost is $20 at 4 units of output and $36 at 6 units of output.Between 4 and 6 units of output,marginal cost

Use the table below to answer the following question. Table 11.2.4 Number of Workers Total Product (baskets of corn) 1 0 2 3 3 7 4 10 5 12 -Refer to Table 11.2.4.The table gives the total product schedule of workers who harvest corn.Diminishing marginal returns begin when the ________ is hired.

The marginal cost (MC)curve intersects the

A production function is the relationship between the maximum output attainable and the

Refer to the table below to answer the following questions. Table 11.2.1 Labour (workersper day) Output (teapots per day) 0 0 1 3 2 12 3 19 4 23 5 25 -Refer to Table 11.2.1 which gives Tania's total product schedule.The marginal product when the number of workers increases from 1 to 2 is

Diminishing marginal returns refers to a situation where the ________ of an additional worker is less than the ________ of the previous worker.

If an increase in output from 5 to 10 teapots increases total cost from $100 to $200,the marginal cost of one of those 5 teapots is

The short run refers to a time period

The law of diminishing marginal returns refers to the tendency for ________ to eventually decrease as more labour is employed,everything else remaining the same.

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

Sue's Surfboards rents the factory building in which it produces surfboards.The rent is increased by $200 a week.If other things remain the same,the average fixed cost curve ,the average variable cost curve ,the average total cost curve ,and the marginal cost curve .

When the marginal product curve is ,the marginal cost curve is falling.When the average product curve is ,the average variable cost curve is falling.Maximum MP occurs at the same output as .Maximum AP occurs at the same output as .

Diminishing marginal returns refers to a situation where the of an additional worker is less than the of the previous worker.