Question 1

short-run production function assumes that

Accepted Answer

A) the level of output is fixed. 
B) at least one input is a fixed input. 
C) all inputs are fixed inputs. 
D) both a and b 
E) both b and c 
A) the level of output is fixed. 
B) at least one input is a fixed input. 
C) all inputs are fixed inputs. 
D) both a and b 
E) both b and c

Question 2

$\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,diminishing returns

Accepted Answer

A) begin with the first unit of labor. 
B) begin with the third unit of labor. 
C) begin with the fourth unit of labor. 
D) begin with the fifth unit of labor. 
E) do not occur because output is positive for all levels of labor usage. 
A) begin with the first unit of labor. 
B) begin with the third unit of labor. 
C) begin with the fourth unit of labor. 
D) begin with the fifth unit of labor. 
E) do not occur because output is positive for all levels of labor usage.

Question 3

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,if the firm produces 60 units of output,what is average variable cost?

Accepted Answer

A) $5 
B) $7.67 
C) $20 
D) $57.50 
E) $2.67 
A) $5 
B) $7.67 
C) $20 
D) $57.50 
E) $2.67

Question 4

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.Suppose that installation of a new assembly line increases the output produced per worker.The cost per unit of output

Accepted Answer

A) will increase. 
B) will decrease. 
C) will be unchanged. 
D) is at its maximum. 
E) is at its minimum 
A) will increase. 
B) will decrease. 
C) will be unchanged. 
D) is at its maximum. 
E) is at its minimum

Question 5

The following graph shows the marginal and average product curves for labor,the firm's only variable input.The monthly wage for labor is $2,800.Fixed cost is $160,000.   When the firm uses 40 units of labor,what is AVC at this level of output?

Accepted Answer

A) $120 
B) $400 
C) $40 
D) $70 
E) $86 
A) $120 
B) $400 
C) $40 
D) $70 
E) $86

Question 6

Use the following table to answer the question below: The amount of total output produced from various combinations of labor and capital. $$\begin{array}{l}
\quad\quad\quad\quad\quad\quad\text { Units of Capital }\
\begin{array} { c c c c c c } 
& & 1 & 2 & 3 & 4 \
& 1 & 20 & 36 & 48 & 53 \
\text { Units } & 2 & 38 & 68 & 88 & 94 \
\text { of } & 3 & 53 & 94 & 122 & 133 \
\text { Iabar } & 4 & 63 & 112 & 148 & 164 \
& 5 & 68 & 120 & 164 & 184
\end{array}
\end{array}$$ If capital is fixed at three units,how much does the fourth unit of labor add to total output?

Accepted Answer

A) 16 
B) 28 
C) 34 
D) 36 
E) none of the above 
A) 16 
B) 28 
C) 34 
D) 36 
E) none of the above

Question 7

The following graph shows the marginal and average product curves for labor,the firm's only variable input.The monthly wage for labor is $2,800.Fixed cost is $160,000.   When the firm uses 40 units of labor,how much output does it produce?

Accepted Answer

A) 1,600 units 
B) 400 units 
C) 4,000 units 
D) 2,800 units 
E) none of the above 
A) 1,600 units 
B) 400 units 
C) 4,000 units 
D) 2,800 units 
E) none of the above

Question 8

Average total cost

Accepted Answer

A) increases as output increases. 
B) decreases as output increases. 
C) increases if marginal cost is increasing. 
D) increases if marginal cost is greater than average total cost. 
E) both c and d 
A) increases as output increases. 
B) decreases as output increases. 
C) increases if marginal cost is increasing. 
D) increases if marginal cost is greater than average total cost. 
E) both c and d

Question 9

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

Accepted Answer

A) 60 
B) 80 
C) 110 
D) 130 
E) none of the above 
A) 60 
B) 80 
C) 110 
D) 130 
E) none of the above

Question 10

Based on the following table,what is average variable cost when output is 200? $\begin{array}{llcc}
  \text {  Output} & \text { Total Cost }  \
0 &\$300\
50&800\
100&1050\
150 &1650\
200 &2400\
\end{array}$

Accepted Answer

A) $2.00 
B) $12.00 
C) $10.50 
D) $240 
E) $210 
A) $2.00 
B) $12.00 
C) $10.50 
D) $240 
E) $210

Question 11

To answer,refer to the following:
 "At Huffy's ...bicycle factory,1,700 employees turn out 15,000 bicycles a day.Five years ago,it required 2,200 workers to make 10,000 bikes daily."
Holding all else equal,we can conclude that,over the past 5 years,

Accepted Answer

A) Huffy's average variable cost decreased. 
B) Huffy's average variable cost increased. 
C) Huffy's marginal cost decreased. 
D) Huffy's marginal cost increased. 
E) both a and c 
A) Huffy's average variable cost decreased. 
B) Huffy's average variable cost increased. 
C) Huffy's marginal cost decreased. 
D) Huffy's marginal cost increased. 
E) both a and c

Question 12

Given the table below,what is average total cost when 200 units of output are produced? $\begin{array}{c}
\begin{array}{c}
\
\
\text { Output } \
\hline 100 \
200 \
300 \
400 
\end{array}
\begin{array}{c}
\
\text { Total}\
\text { Cost }\
\hline 560\
-\
-\
-
\end{array}
\begin{array}{c}
\text {Total}\
\text {Fixed}\
\text {Cost}\
\hline-\
-\
-\
-
\end{array}
\begin{array}{c}
\text { Total } \
\text { Variable } \
\text { Cost } \
\hline 60\
-\
-\
- 
\end{array}
\begin{array}{lll}
\text {Average}\
\text {Fixed}\
\text {Cost}\
\hline -\
-\
-\
-
\end{array}
\begin{array}{c}
\text {Average}\
\text {Variable}\
\text {Cost}\
\hline-\
-\
4.00\
-
\end{array}
\begin{array}{c}
\text {Average}\
\text {Total}\
\text {Cost}\
\hline-\
-\
-\
7.00
\end{array}
\begin{array}{c}
\
\text {Marginal}\
\text {Cost}\
\hline-\
4.00\
-\
-
\end{array}
\end{array}$

Accepted Answer

A) $2.30 
B) $2.50 
C) $4.00 
D) $4.80 
E) none of the above 
A) $2.30 
B) $2.50 
C) $4.00 
D) $4.80 
E) none of the above

Question 13

A firm is currently producing 10 units of output; marginal cost is $24 and average total cost is $6 at this level of output.The average total cost at 9 units of output is:

Accepted Answer

A) $4 
B) $5 
C) $6 
D) $8 
E) none of the above 
A) $4 
B) $5 
C) $6 
D) $8 
E) none of the above

Question 14

Given the table below,what is the total fixed cost when 400 units of output are produced? $\begin{array}{c}
\begin{array}{c}
\
\
\text { Output } \
\hline 100 \
200 \
300 \
400 
\end{array}
\begin{array}{c}
\
\text { Total}\
\text { Cost }\
\hline 560\
-\
-\
-
\end{array}
\begin{array}{c}
\text {Total}\
\text {Fixed}\
\text {Cost}\
\hline-\
-\
-\
-
\end{array}
\begin{array}{c}
\text { Total } \
\text { Variable } \
\text { Cost } \
\hline 60\
-\
-\
- 
\end{array}
\begin{array}{lll}
\text {Average}\
\text {Fixed}\
\text {Cost}\
\hline -\
-\
-\
-
\end{array}
\begin{array}{c}
\text {Average}\
\text {Variable}\
\text {Cost}\
\hline-\
-\
4.00\
-
\end{array}
\begin{array}{c}
\text {Average}\
\text {Total}\
\text {Cost}\
\hline-\
-\
-\
7.00
\end{array}
\begin{array}{c}
\
\text {Marginal}\
\text {Cost}\
\hline-\
4.00\
-\
-
\end{array}
\end{array}$

Accepted Answer

A) $500 
B) $2000 
C) $3500 
D) $5000 
E) none of the above 
A) $500 
B) $2000 
C) $3500 
D) $5000 
E) none of the above

Question 15

The following graph shows the marginal and average product curves for labor,the firm's only variable input.The monthly wage for labor is $2,800.Fixed cost is $160,000.   When the firm uses 40 units of labor,what is marginal cost at this level of output?

Accepted Answer

A) $70 
B) $35 
C) $60 
D) $280 
E) $55 
A) $70 
B) $35 
C) $60 
D) $280 
E) $55

Question 16

-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 .The average variable cost when 550 units of labor are employed is $_________,and the marginal cost when 550 units of labor are employed is $____________.

Accepted Answer

A) $1,000/1,925; $1,000/825 
B) $1,000/2,700; $1,000/2,025 
C) $4.50; $2.75 
D) $0.35; $2.70 
E) none of the above 
A) $1,000/1,925; $1,000/825 
B) $1,000/2,700; $1,000/2,025 
C) $4.50; $2.75 
D) $0.35; $2.70 
E) none of the above

Question 17

The following graph shows the marginal and average product curves for labor,the firm's only variable input.The monthly wage for labor is $2,800.Fixed cost is $160,000.   At what output does the firm reach minimum average variable cost?

Accepted Answer

A) 7,400 
B) 8,000 
C) 100 
D) 6,000 
E) 600 
A) 7,400 
B) 8,000 
C) 100 
D) 6,000 
E) 600

Question 18

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.What is the marginal product of labor?

Accepted Answer

A) $8 per worker 
B) 8 units of output per worker 
C) $16 per worker 
D) 16 units of output per worker 
E) none of the above 
A) $8 per worker 
B) 8 units of output per worker 
C) $16 per worker 
D) 16 units of output per worker 
E) none of the above

Question 19

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.What is average variable cost?

Accepted Answer

A) $0.32 
B) $16 
C) $20 
D) $1,280 
E) none of the above 
A) $0.32 
B) $16 
C) $20 
D) $1,280 
E) none of the above

Question 20

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 average product of labor when 4 units of labor are employed is

Accepted Answer

A) 22. 
B) 20. 
C) 19. 
D) 16. 
A) 22. 
B) 20. 
C) 19. 
D) 16.

short-run production function assumes that

Units of Labor 1 2 3 4 5 Total Product --- --- 300 --- 290 Average Product --- 125 --- --- --- Marginal Product 100 --- --- 20 --- In the table above,diminishing returns

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,if the firm produces 60 units of output,what is average variable cost?

The following graph shows the marginal and average product curves for labor,the firm's only variable input.The monthly wage for labor is $2,800.Fixed cost is $160,000. When the firm uses 40 units of labor,what is AVC at this level of output?

The following graph shows the marginal and average product curves for labor,the firm's only variable input.The monthly wage for labor is $2,800.Fixed cost is $160,000. When the firm uses 40 units of labor,how much output does it produce?

Average total cost

Based on the following table,what is average variable cost when output is 200? Output Total Cost 0 \3 00 50 800 100 1050 150 1650 200 2400

To answer,refer to the following: "At Huffy's ...bicycle factory,1,700 employees turn out 15,000 bicycles a day.Five years ago,it required 2,200 workers to make 10,000 bikes daily." Holding all else equal,we can conclude that,over the past 5 years,

Given the table below,what is average total cost when 200 units of output are produced? Output 100 200 300 400 Total Cost 560 - - - Total Fixed Cost - - - - Total Variable Cost 60 - - - Average Fixed Cost - - - - Average Variable Cost - - 4.00 - Average Total Cost - - - 7.00 Marginal Cost - 4.00 - -

A firm is currently producing 10 units of output; marginal cost is $24 and average total cost is $6 at this level of output.The average total cost at 9 units of output is:

The following graph shows the marginal and average product curves for labor,the firm's only variable input.The monthly wage for labor is $2,800.Fixed cost is $160,000. When the firm uses 40 units of labor,what is marginal cost at this level of output?

-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 .The average variable cost when 550 units of labor are employed is $_,and the marginal cost when 550 units of labor are employed is $____.

The following graph shows the marginal and average product curves for labor,the firm's only variable input.The monthly wage for labor is $2,800.Fixed cost is $160,000. At what output does the firm reach minimum average variable cost?

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.What is the marginal product of labor?

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.What is average 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 average product of labor when 4 units of labor are employed is

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

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Exam 8: Production and Cost in the Short Run

short-run production function assumes that

Units of Labor 1 2 3 4 5 Total Product --- --- 300 --- 290 Average Product --- 125 --- --- --- Marginal Product 100 --- --- 20 --- In the table above,diminishing returns

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,if the firm produces 60 units of output,what is average variable cost?

The following graph shows the marginal and average product curves for labor,the firm's only variable input.The monthly wage for labor is $2,800.Fixed cost is $160,000. When the firm uses 40 units of labor,what is AVC at this level of output?

The following graph shows the marginal and average product curves for labor,the firm's only variable input.The monthly wage for labor is $2,800.Fixed cost is $160,000. When the firm uses 40 units of labor,how much output does it produce?

Average total cost

Based on the following table,what is average variable cost when output is 200? Output Total Cost 0 \3 00 50 800 100 1050 150 1650 200 2400

To answer,refer to the following: "At Huffy's ...bicycle factory,1,700 employees turn out 15,000 bicycles a day.Five years ago,it required 2,200 workers to make 10,000 bikes daily." Holding all else equal,we can conclude that,over the past 5 years,

A firm is currently producing 10 units of output; marginal cost is $24 and average total cost is $6 at this level of output.The average total cost at 9 units of output is:

The following graph shows the marginal and average product curves for labor,the firm's only variable input.The monthly wage for labor is $2,800.Fixed cost is $160,000. When the firm uses 40 units of labor,what is marginal cost at this level of output?

The following graph shows the marginal and average product curves for labor,the firm's only variable input.The monthly wage for labor is $2,800.Fixed cost is $160,000. At what output does the firm reach minimum average variable cost?

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.What is the marginal product of labor?

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.What is average 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 average product of labor when 4 units of labor are employed is

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