Question 1

Diminishing returns refers to the decrease in

Accepted Answer

A) profit that results from increases in output. 
B) average total cost that results from decreases in input prices. 
C) average product that results from increases in the variable input. 
D) marginal product that results from increases in the variable input. 
E) long-run average cost that results from increases in output. 
A) profit that results from increases in output. 
B) average total cost that results from decreases in input prices. 
C) average product that results from increases in the variable input. 
D) marginal product that results from increases in the variable input. 
E) long-run average cost that results from increases in output.

Question 2

In the table below,the capital stock is fixed at 40 units,the price of capital is $15 per unit,and the price of labor is $80 per unit. $$\begin{array} { c c } 
\text { Units of } & \text { Units of } \
\text { Labor } & \text { Output } \
\hline 5 & 40 \
10 & 100 \
15 & 180 \
20 & 220
\end{array}$$ If the firm produces 180 units of output,what is total variable cost?

Accepted Answer

A) $1,200 
B) $1,800 
C) $14,400 
D) $17,100 
E) none of the above 
A) $1,200 
B) $1,800 
C) $14,400 
D) $17,100 
E) none of the above

Question 3

Use the following table to answer the question below: The amount of total output produced from various combinations of labor and capital. $$\begin{array} { c c c c c c } 
& &  { \text { Units af Capital } } \
 & & 1 & 2 & 3 & 4 \
& 1 & 50 & 120 & 160 & 180 \
\text { Units } & 2 & 110 & 260 & 360 & 390 \
\text { of } & 3 & 150 & 360 & 510 & 560 \
\text { Lebor } & 4 & 170 & 430 & 630 & 690 \
& 5 & 160 & 480 & 710 & 790
\end{array}$$ If labor is fixed at three units,how much does the second unit of capital add to total output?

Accepted Answer

A) 100 
B) 150 
C) 210 
D) 360 
E) none of the above 
A) 100 
B) 150 
C) 210 
D) 360 
E) none of the above

Question 4

out the table and answer the question below. $\begin{array}{c}
\begin{array}{c}
\text {Units of}\
\text {Labor}\
\hline1 \
2 \
3 \
4 \
5 \
6 \
7
\end{array}
\begin{array}{c}
\text { Total }\
\text { Product }\
\hline ---\
---\
66\
---\
---\
78\
---
\end{array}
\begin{array}{c}
\text {Average}\
\text {Product}\
\hline20\
---\
---\
---\
16\
---\
10
\end{array}
\begin{array}{c}
\text {Marginal}\
 \text {Product}\
\hline---\
30\
---\
10\
---\
---\
---\
\end{array}
\end{array}$

The marginal product of the fifth unit of labor is

Accepted Answer

A) 16. 
B) 10. 
C) 4. 
D) -2. 
A) 16. 
B) 10. 
C) 4. 
D) -2.

Question 5

A firm is using a single variable input,labor,with a given amount of a fixed input,capital.If the level of capital is decreased,

Accepted Answer

A) the total product curve of labor curve shifts downward. 
B) the average product curve of labor curve shifts downward. 
C) the marginal product curve of labor shifts downward. 
D) all of the above 
E) none of the above 
A) the total product curve of labor curve shifts downward. 
B) the average product curve of labor curve shifts downward. 
C) the marginal product curve of labor shifts downward. 
D) all of the above 
E) none of the above

Question 6

A firm produces 4,000 units of output using 500 workers.Marginal cost is $10,the wage rate is $160,and total fixed cost is $100,000.When output is 4,000 units,

Accepted Answer

A) average variable cost is decreasing. 
B) average variable cost is increasing. 
C) average total cost is decreasing. 
D) average total cost is increasing. 
E) both a and c 
A) average variable cost is decreasing. 
B) average variable cost is increasing. 
C) average total cost is decreasing. 
D) average total cost is increasing. 
E) both a and c

Question 7

Above is a firm's average product of labor and marginal product of labor curves.The price of labor is $60 per unit.Given this,diminishing returns set in with the

Accepted Answer

A) 3rd unit of labor. 
B) 6th unit of labor. 
C) 10th unit of labor. 
D) 12th unit of labor. 
E) 14th unit of labor. 
A) 3rd unit of labor. 
B) 6th unit of labor. 
C) 10th unit of labor. 
D) 12th unit of labor. 
E) 14th unit of labor.

Question 8

$\begin{array}{c}
\begin{array}{c}
\text {Units of}\
\text {Labor}\
\hline1 \
2 \
3 \
4 \
5 \
\end{array}
\begin{array}{c}
\text { Total }\
\text { Product }\
\hline ---\
---\
300\
---\
290\
\end{array}
\begin{array}{c}
\text {Average}\
\text {Product}\
\hline---\

125\
---\
---\
---\

\end{array}
\begin{array}{c}
\text {Marginal}\
 \text {Product}\
\hline100\
---\
---\
20\
---\

\end{array}
\end{array}$

In the table above,what is the marginal product of the fifth unit of labor?

Accepted Answer

A) 20 
B) 50 
C) 80 
D) -10 
E) -30 
A) 20 
B) 50 
C) 80 
D) -10 
E) -30

Question 9

Given the table below,the maximum amount that can be produced using 20 workers is $\begin{array}{cccc}
\begin{array}{c}
\text { Number of } \
\text { Workers }
\end{array} & \begin{array}{c}
\text { Total } \
\text { Product }
\end{array} & \begin{array}{c}
\text { Average } \
\text { Product }
\end{array} & \begin{array}{c}
\text { Morginal } \
\text { Product }
\end{array} \
\hline 5 & -&28 & -\
10 & - & - & 30 \
15 & 420 & - &- \
20 & -& -&22 \
\hline
\end{array}$

Accepted Answer

A) 442 units. 
B) 530 units. 
C) 22 units. 
D) 420 units. 
E) 26.5 units. 
A) 442 units. 
B) 530 units. 
C) 22 units. 
D) 420 units. 
E) 26.5 units.

Question 10

The capital stock is fixed at 5 units,the price of capital is $60 per unit,and the price of labor is $20 per unit. $$\begin{array} { c c } 
\text { Units of } & \text { Units of } \
\text { Labor } & \text { Output } \
\hline 2 & 10 \
4 & 26 \
6 & 46 \
8 & 60 \
10 & 72 \
12 & 80
\end{array}$$ Based on the above,how much does the 12th unit of output add to the firm's total variable cost?

Accepted Answer

A) $2.50 
B) $4 
C) $5 
D) $20 
E) $40 
A) $2.50 
B) $4 
C) $5 
D) $20 
E) $40

Question 11

out the table and answer the question below. $\begin{array}{c}
\begin{array}{c}
\text {Units of}\
\text {Labor}\
\hline1 \
2 \
3 \
4 \
5 \
6 \
7
\end{array}
\begin{array}{c}
\text { Total }\
\text { Product }\
\hline ---\
---\
66\
---\
---\
78\
---
\end{array}
\begin{array}{c}
\text {Average}\
\text {Product}\
\hline20\
---\
---\
---\
16\
---\
10
\end{array}
\begin{array}{c}
\text {Marginal}\
 \text {Product}\
\hline---\
30\
---\
10\
---\
---\
---\
\end{array}
\end{array}$

Marginal product is negative when _____ units of labor are employed.

Accepted Answer

A) 5 units of labor are employed. 
B) 6 units of labor are employed. 
C) 7 units of labor are employed. 
D) both b and c 
A) 5 units of labor are employed. 
B) 6 units of labor are employed. 
C) 7 units of labor are employed. 
D) both b and c

Question 12

-Assume labor-the only variable input of a firm-has average and marginal product curves shown in the figure above.The price of labor is $1,000 per unit .At its minimum value,marginal cost is $___________.

Accepted Answer

A) $1,000/2,025 
B) $1,000/1,925 
C) $1,000/1,800 
D) $1,000/2,700 
E) none of the above 
A) $1,000/2,025 
B) $1,000/1,925 
C) $1,000/1,800 
D) $1,000/2,700 
E) none of the above

Question 13

Suppose that the firm's only variable input is labor.When 50 workers are used,the average product of labor is 50 and the marginal product of labor is 75.The wage rate is $80 and the total cost of the fixed input is $500.What is average total cost?

Accepted Answer

A) $0.825 
B) $0.63 
C) $1.80 
D) $4.10 
E) none of the above 
A) $0.825 
B) $0.63 
C) $1.80 
D) $4.10 
E) none of the above

Question 14

$\begin{array}{c}
\begin{array}{c}
\text {Units of}\
\text {Labor}\
\hline1 \
2 \
3 \
4 \
5 \
\end{array}
\begin{array}{c}
\text { Total }\
\text { Product }\
\hline ---\
---\
300\
---\
290\
\end{array}
\begin{array}{c}
\text {Average}\
\text {Product}\
\hline---\

125\
---\
---\
---\

\end{array}
\begin{array}{c}
\text {Marginal}\
 \text {Product}\
\hline100\
---\
---\
20\
---\

\end{array}
\end{array}$

In the table above,how much does the third unit of labor ADD to total output?

Accepted Answer

A) 100 
B) 125 
C) 150 
D) 300 
E) none of the above 
A) 100 
B) 125 
C) 150 
D) 300 
E) none of the above

Question 15

Given the table below,as the number of workers increases from 10 to 15,output per worker $\begin{array}{cccc}
\begin{array}{c}
\text { Number of } \
\text { Workers }
\end{array} & \begin{array}{c}
\text { Total } \
\text { Product }
\end{array} & \begin{array}{c}
\text { Average } \
\text { Product }
\end{array} & \begin{array}{c}
\text { Morginal } \
\text { Product }
\end{array} \
\hline 5 & -&28 & -\
10 & - & - & 30 \
15 & 420 & - &- \
20 & -& -&22 \
\hline
\end{array}$

Accepted Answer

A) increases from 290 to 420 
B) increases from 28 to 29 
C) decreases from 29 to 28 
D) decreases from 30 to 26 
E) none of the above 
A) increases from 290 to 420 
B) increases from 28 to 29 
C) decreases from 29 to 28 
D) decreases from 30 to 26 
E) none of the above

Question 16

Based on the following table,the additional cost of producing the 170th unit of output is: $\begin{array}{llcc}
  \text {  Output} & \text { Total Cost }  \
0 &\$300\
50&800\
100&1050\
150 &1650\
200 &2400\
\end{array}$

Accepted Answer

A) $10.50 
B) $11.50 
C) $13 
D) $15 
E) none of the above 
A) $10.50 
B) $11.50 
C) $13 
D) $15 
E) none of the above

Question 17

Given the table below,diminishing returns begin with the $\begin{array}{cccc}
\begin{array}{c}
\text { Number of } \
\text { Workers }
\end{array} & \begin{array}{c}
\text { Total } \
\text { Product }
\end{array} & \begin{array}{c}
\text { Average } \
\text { Product }
\end{array} & \begin{array}{c}
\text { Morginal } \
\text { Product }
\end{array} \
\hline 5 & -&28 & -\
10 & - & - & 30 \
15 & 420 & - &- \
20 & -& -&22 \
\hline
\end{array}$

Accepted Answer

A) 1st worker. 
B) 5th worker. 
C) 10th worker. 
D) 11th worker. 
E) 16th worker. 
A) 1st worker. 
B) 5th worker. 
C) 10th worker. 
D) 11th worker. 
E) 16th worker.

Question 18

Marginal cost

Accepted Answer

A) measures how total cost changes when input prices change. 
B) measures how total cost changes when one more unit of output is produced. 
C) is less than average cost when average cost is decreasing. 
D) both a and b 
E) both b and c 
A) measures how total cost changes when input prices change. 
B) measures how total cost changes when one more unit of output is produced. 
C) is less than average cost when average cost is decreasing. 
D) both a and b 
E) both b and c

Question 19

Given the table below,if capital is fixed at one unit,diminishing returns begin with the $$\begin{array}{l}
\quad\quad\quad\quad\quad \text { Units of Capital }\
\begin{array} { c c c c c } 
& & 1 & 2 & 3 \
 \text { Units } & 1 & 80 & 100 & 120 \
\text { of } & 2 & 180 & 220 & 260 \
\text { Labor } & 3 & 270 & 330 & 390 \
& 4 & 340 & 420 & 500 \
& 5 & 390 & 490 & 590 \
& 6 & 410 & 530 & 650
\end{array}
\end{array}$$ Amount of total output produced from various combinations of labor and capital.

Accepted Answer

A) first unit of labor. 
B) second unit of labor. 
C) third unit of labor. 
D) fourth unit of labor. 
E) none of the above 
A) first unit of labor. 
B) second unit of labor. 
C) third unit of labor. 
D) fourth unit of labor. 
E) none of the above

Question 20

$\begin{array}{c}
\begin{array}{c}
\text {Units of}\
\text {Labor}\
\hline1 \
2 \
3 \
4 \
5 \
\end{array}
\begin{array}{c}
\text { Total }\
\text { Product }\
\hline ---\
---\
300\
---\
290\
\end{array}
\begin{array}{c}
\text {Average}\
\text {Product}\
\hline---\

125\
---\
---\
---\

\end{array}
\begin{array}{c}
\text {Marginal}\
 \text {Product}\
\hline100\
---\
---\
20\
---\

\end{array}
\end{array}$

In the table above,what is the maximum amount of output that can be produced with two workers?

Accepted Answer

A) 50 
B) 125 
C) 150 
D) 250 
E) 320 
A) 50 
B) 125 
C) 150 
D) 250 
E) 320

Diminishing returns refers to the decrease in

In the table below,the capital stock is fixed at 40 units,the price of capital is $15 per unit,and the price of labor is $80 per unit. Units of Units of Labor Output 5 40 10 100 15 180 20 220 If the firm produces 180 units of output,what is total variable cost?

out the table and answer the question below. Units of Labor 1 2 3 4 5 6 7 Total Product --- --- 66 --- --- 78 --- Average Product 20 --- --- --- 16 --- 10 Marginal Product --- 30 --- 10 --- --- --- The marginal product of the fifth unit of labor is

A firm is using a single variable input,labor,with a given amount of a fixed input,capital.If the level of capital is decreased,

A firm produces 4,000 units of output using 500 workers.Marginal cost is $10,the wage rate is $160,and total fixed cost is $100,000.When output is 4,000 units,

Above is a firm's average product of labor and marginal product of labor curves.The price of labor is $60 per unit.Given this,diminishing returns set in with the

Units of Labor 1 2 3 4 5 Total Product --- --- 300 --- 290 Average Product --- 125 --- --- --- Marginal Product 100 --- --- 20 --- In the table above,what is the marginal product of the fifth unit of labor?

Given the table below,the maximum amount that can be produced using 20 workers is Number of Workers Total Product Average Product Morginal Product 5 - 28 - 10 - - 30 15 420 - - 20 - - 22

The capital stock is fixed at 5 units,the price of capital is $60 per unit,and the price of labor is $20 per unit. Units of Units of Labor Output 2 10 4 26 6 46 8 60 10 72 12 80 Based on the above,how much does the 12th unit of output add to the firm's total variable cost?

out the table and answer the question below. Units of Labor 1 2 3 4 5 6 7 Total Product --- --- 66 --- --- 78 --- Average Product 20 --- --- --- 16 --- 10 Marginal Product --- 30 --- 10 --- --- --- Marginal product is negative when _____ units of labor are employed.

-Assume labor-the only variable input of a firm-has average and marginal product curves shown in the figure above.The price of labor is $1,000 per unit .At its minimum value,marginal cost is $___________.

Suppose that the firm's only variable input is labor.When 50 workers are used,the average product of labor is 50 and the marginal product of labor is 75.The wage rate is $80 and the total cost of the fixed input is $500.What is average total cost?

Units of Labor 1 2 3 4 5 Total Product --- --- 300 --- 290 Average Product --- 125 --- --- --- Marginal Product 100 --- --- 20 --- In the table above,how much does the third unit of labor ADD to total output?

Given the table below,as the number of workers increases from 10 to 15,output per worker Number of Workers Total Product Average Product Morginal Product 5 - 28 - 10 - - 30 15 420 - - 20 - - 22

Based on the following table,the additional cost of producing the 170th unit of output is: Output Total Cost 0 \3 00 50 800 100 1050 150 1650 200 2400

Given the table below,diminishing returns begin with the Number of Workers Total Product Average Product Morginal Product 5 - 28 - 10 - - 30 15 420 - - 20 - - 22

Marginal cost

Given the table below,if capital is fixed at one unit,diminishing returns begin with the Units of Capital 1 2 3 Units 1 80 100 120 of 2 180 220 260 Labor 3 270 330 390 4 340 420 500 5 390 490 590 6 410 530 650 Amount of total output produced from various combinations of labor and capital.

Units of Labor 1 2 3 4 5 Total Product --- --- 300 --- 290 Average Product --- 125 --- --- --- Marginal Product 100 --- --- 20 --- In the table above,what is the maximum amount of output that can be produced with two workers?

Managers,profits,and Markets

Demand,supply,and Market Equilibrium

Marginal Analysis for Optimal Decisions

Basic Estimation Techniques

Theory of Consumer Behavior

Elasticity and Demand

Demand Estimation and Forecasting

Production and Cost in the Long Run

Production and Cost Estimation

Managerial Decisions in Competitive Markets

Managerial Decisions for Firms With Market Power

Strategic Decision Making in Oligopoly Markets

Advanced Pricing Techniques

Decisions Under Risk and Uncertainty

Government Regulation of Business

Filters

Exam 8: Production and Cost in the Short Run

Diminishing returns refers to the decrease in

In the table below,the capital stock is fixed at 40 units,the price of capital is $15 per unit,and the price of labor is $80 per unit. Units of Units of Labor Output 5 40 10 100 15 180 20 220 If the firm produces 180 units of output,what is total variable cost?

out the table and answer the question below. Units of Labor 1 2 3 4 5 6 7 Total Product --- --- 66 --- --- 78 --- Average Product 20 --- --- --- 16 --- 10 Marginal Product --- 30 --- 10 --- --- --- The marginal product of the fifth unit of labor is

A firm is using a single variable input,labor,with a given amount of a fixed input,capital.If the level of capital is decreased,

A firm produces 4,000 units of output using 500 workers.Marginal cost is $10,the wage rate is $160,and total fixed cost is $100,000.When output is 4,000 units,

Above is a firm's average product of labor and marginal product of labor curves.The price of labor is $60 per unit.Given this,diminishing returns set in with the

Units of Labor 1 2 3 4 5 Total Product --- --- 300 --- 290 Average Product --- 125 --- --- --- Marginal Product 100 --- --- 20 --- In the table above,what is the marginal product of the fifth unit of labor?

Given the table below,the maximum amount that can be produced using 20 workers is Number of Workers Total Product Average Product Morginal Product 5 - 28 - 10 - - 30 15 420 - - 20 - - 22

The capital stock is fixed at 5 units,the price of capital is $60 per unit,and the price of labor is $20 per unit. Units of Units of Labor Output 2 10 4 26 6 46 8 60 10 72 12 80 Based on the above,how much does the 12th unit of output add to the firm's total variable cost?

out the table and answer the question below. Units of Labor 1 2 3 4 5 6 7 Total Product --- --- 66 --- --- 78 --- Average Product 20 --- --- --- 16 --- 10 Marginal Product --- 30 --- 10 --- --- --- Marginal product is negative when _____ units of labor are employed.

-Assume labor-the only variable input of a firm-has average and marginal product curves shown in the figure above.The price of labor is $1,000 per unit .At its minimum value,marginal cost is $___________.

Suppose that the firm's only variable input is labor.When 50 workers are used,the average product of labor is 50 and the marginal product of labor is 75.The wage rate is $80 and the total cost of the fixed input is $500.What is average total cost?

Units of Labor 1 2 3 4 5 Total Product --- --- 300 --- 290 Average Product --- 125 --- --- --- Marginal Product 100 --- --- 20 --- In the table above,how much does the third unit of labor ADD to total output?

Given the table below,as the number of workers increases from 10 to 15,output per worker Number of Workers Total Product Average Product Morginal Product 5 - 28 - 10 - - 30 15 420 - - 20 - - 22

Based on the following table,the additional cost of producing the 170th unit of output is: Output Total Cost 0 \3 00 50 800 100 1050 150 1650 200 2400

Given the table below,diminishing returns begin with the Number of Workers Total Product Average Product Morginal Product 5 - 28 - 10 - - 30 15 420 - - 20 - - 22

Marginal cost

Given the table below,if capital is fixed at one unit,diminishing returns begin with the Units of Capital 1 2 3 Units 1 80 100 120 of 2 180 220 260 Labor 3 270 330 390 4 340 420 500 5 390 490 590 6 410 530 650 Amount of total output produced from various combinations of labor and capital.

Units of Labor 1 2 3 4 5 Total Product --- --- 300 --- 290 Average Product --- 125 --- --- --- Marginal Product 100 --- --- 20 --- In the table above,what is the maximum amount of output that can be produced with two workers?

Managers,profits,and Markets

Demand,supply,and Market Equilibrium

Marginal Analysis for Optimal Decisions

Basic Estimation Techniques

Theory of Consumer Behavior

Elasticity and Demand

Demand Estimation and Forecasting

Production and Cost in the Long Run

Production and Cost Estimation

Managerial Decisions in Competitive Markets

Managerial Decisions for Firms With Market Power

Strategic Decision Making in Oligopoly Markets

Advanced Pricing Techniques

Decisions Under Risk and Uncertainty

Government Regulation of Business

Filters