Question 1

If average product is increasing,then marginal product

Accepted Answer

A) must be greater than average product. 
B) must be less than average product. 
C) must be increasing. 
D) cannot be decreasing. 
E) both a and c 
A) must be greater than average product. 
B) must be less than average product. 
C) must be increasing. 
D) cannot be decreasing. 
E) both a and c

Question 2

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.Which of the following is true?

Accepted Answer

A) Average variable cost is increasing. 
B) Marginal cost is increasing. 
C) Average variable cost is decreasing. 
D) Cannot determine without more information. 
A) Average variable cost is increasing. 
B) Marginal cost is increasing. 
C) Average variable cost is decreasing. 
D) Cannot determine without more information.

Question 3

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 120 units of labor,what is its AVC at this output?

Accepted Answer

A) $40 
B) $70 
C) $60 
D) $56 
E) none of the above 
A) $40 
B) $70 
C) $60 
D) $56 
E) none of the above

Question 4

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 the amount of labor used increases from three to four units,the marginal product of the second unit of capital

Accepted Answer

A) increases by 8 units. 
B) increases by 49 units. 
C) decreases by 14 units. 
D) decreases by 49 units. 
E) none of the above 
A) increases by 8 units. 
B) increases by 49 units. 
C) decreases by 14 units. 
D) decreases by 49 units. 
E) none of the above

Question 5

In the figure above,the wage rate is $600 and total fixed cost is $15,000.How much output does the firm produce when average variable cost is at its minimum?

Accepted Answer

A) 270 
B) 375 
C) 30 
D) 1,600 
E) 4,800 
A) 270 
B) 375 
C) 30 
D) 1,600 
E) 4,800

Question 6

-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 minimum average variable cost,the firm employs __________ units of labor and minimum average variable cost is reached at __________ units of output.

Accepted Answer

A) 300; 810,000 
B) 300; 962,500 
C) 450; 962,500 
D) 500; 540,000 
E) none of the above 
A) 300; 810,000 
B) 300; 962,500 
C) 450; 962,500 
D) 500; 540,000 
E) none of the above

Question 7

Which of the following statements is FALSE?

Accepted Answer

A) A firm plans in the long run and operates in the short run. 
B) In the short run,a firm can change some but not all of its inputs. 
C) In the long run all inputs are variable. 
D) In the short run all inputs are fixed. 
A) A firm plans in the long run and operates in the short run. 
B) In the short run,a firm can change some but not all of its inputs. 
C) In the long run all inputs are variable. 
D) In the short run all inputs are fixed.

If average product is increasing,then marginal product

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.Which of the following is true?

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 120 units of labor,what is its AVC at this output?

In the figure above,the wage rate is $600 and total fixed cost is $15,000.How much output does the firm produce when average variable cost is at its minimum?

-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 minimum average variable cost,the firm employs units of labor and minimum average variable cost is reached at units of output.

Which of the following statements is FALSE?

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

If average product is increasing,then marginal product

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.Which of the following is true?

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 120 units of labor,what is its AVC at this output?

In the figure above,the wage rate is $600 and total fixed cost is $15,000.How much output does the firm produce when average variable cost is at its minimum?

Which of the following statements is FALSE?

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