Question 1

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 2

Use the table below to answer the following questions.
Table 11.2.2
  
-Refer to Table 11.2.2 which gives Tania's total product schedule.The marginal product when the number of workers increases from 2 to 3 is

Accepted Answer

A) 1 teapot. 
B) 2 teapots. 
C) 3 teapots. 
D) 4 teapots. 
E) 3.75 teapots. 
A) 1 teapot. 
B) 2 teapots. 
C) 3 teapots. 
D) 4 teapots. 
E) 3.75 teapots.

Question 3

If capital is a variable input in a production process,the law of diminishing marginal returns implies that

Accepted Answer

A) total product is minimized. 
B) capital's marginal product is positive and less than one. 
C) total product is maximized. 
D) marginal product of capital eventually decreases. 
E) marginal product of capital is constant. 
A) total product is minimized. 
B) capital's marginal product is positive and less than one. 
C) total product is maximized. 
D) marginal product of capital eventually decreases. 
E) marginal product of capital is constant.

Question 4

Use the table below to answer the following question.
Table 11.2.4
  
-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 5

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.Average product of labour reaches its maximum for the ________ worker.

Accepted Answer

A) first 
B) second 
C) third 
D) fourth 
E) fifth 
A) first 
B) second 
C) third 
D) fourth 
E) fifth

Question 6

Which of the following quotes best illustrates the idea of average product?

Accepted Answer

A) "If I have 10 workers on my assembly line, I can produce 13 tables a day." 
B) "If I add an 11th worker, I can produce 1 extra table a day." 
C) "Each worker produces 2 tables a day." 
D) "I find if I add an extra shift at night, table production only rises by 80 percent because I need more maintenance time on the assembly line." 
E) "If I double workers and double the assembly line, I can make 120 percent more tables." 
A) "If I have 10 workers on my assembly line, I can produce 13 tables a day." 
B) "If I add an 11th worker, I can produce 1 extra table a day." 
C) "Each worker produces 2 tables a day." 
D) "I find if I add an extra shift at night, table production only rises by 80 percent because I need more maintenance time on the assembly line." 
E) "If I double workers and double the assembly line, I can make 120 percent more tables."

Question 7

Use the table below to answer the following questions.
Table 11.4.1
Swanky's output levels
  
-Refer to Table 11.4.1,which represents Swanky's production possibilities as the firm varies the quantities of knitting machines and workers per day.If Swanky increases the number of knitting machines from 2 to 3 and increases the number of workers employed from 2 to 3,the factory experiences

Accepted Answer

A) economies of scale. 
B) constant returns to scale. 
C) diseconomies of scale. 
D) constant marginal product. 
E) minimum efficient scale. 
A) economies of scale. 
B) constant returns to scale. 
C) diseconomies of scale. 
D) constant marginal product. 
E) minimum efficient scale.

Question 8

Use the table below to answer the following questions.
Table 11.3.1
  
-Refer to Table 11.3.1,which gives Tania's total cost schedule.The average fixed cost of producing 9 teapots per day is

Accepted Answer

A) $2.22. 
B) $1.25. 
C) $10.00. 
D) $1.11. 
E) $1.54. 
A) $2.22. 
B) $1.25. 
C) $10.00. 
D) $1.11. 
E) $1.54.

Question 9

If energy (E)is the only input used to produce output (Q),what is the formula for average product of energy?

Accepted Answer

A)   
B) Q/E 
C)   
D) E/Q 
E) Q*E 
A)   
B) Q/E 
C)   
D) E/Q 
E) Q*E

Question 10

Table 11.2.1
  
-Refer to Table 11.2.1 which gives Tania's total product schedule.The marginal product when the firm increases the number of workers from 3 to 4 per day is

Accepted Answer

A) 6 teapots. 
B) 2 teapots. 
C) 9 teapots. 
D) 7 teapots. 
E) 4 teapots. 
A) 6 teapots. 
B) 2 teapots. 
C) 9 teapots. 
D) 7 teapots. 
E) 4 teapots.

Question 11

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 12

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 13

Use the figure below to answer the following questions.
   
Figure 11.3.2
-Refer to Figure 11.3.2,which illustrates short-run average and marginal cost curves.Which one of the following statements is false?

Accepted Answer

A) Average fixed cost decreases with output. 
B) The vertical gap between curves B and C is equal to average variable cost. 
C) Line B comes closer to line C as output increases because of a decrease in average fixed cost. 
D) Curve D is the marginal cost curve. 
E) The vertical gap between curves B and C is equal to average fixed cost. 
A) Average fixed cost decreases with output. 
B) The vertical gap between curves B and C is equal to average variable cost. 
C) Line B comes closer to line C as output increases because of a decrease in average fixed cost. 
D) Curve D is the marginal cost curve. 
E) The vertical gap between curves B and C is equal to average fixed cost.

Question 14

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 15

The marginal cost curve slopes downward at low outputs because of ________.The marginal cost curve eventually slopes upward because of ________.

Accepted Answer

A) greater specialization and division of labour;the law of diminishing returns 
B) the law of diminishing returns;increasing average fixed cost 
C) falling average fixed cost;the law of diminishing returns 
D) the law of diminishing returns;greater specialization and division of labour 
E) greater specialization and division of labour;rising average fixed cost 
A) greater specialization and division of labour;the law of diminishing returns 
B) the law of diminishing returns;increasing average fixed cost 
C) falling average fixed cost;the law of diminishing returns 
D) the law of diminishing returns;greater specialization and division of labour 
E) greater specialization and division of labour;rising average fixed cost

Question 16

Use the table below to answer the following questions.
Table 11.2.3
  
-Refer to Table 11.2.3.The value of A is

Accepted Answer

A) 1.75. 
B) 2. 
C) 3. 
D) 7. 
E) 4. 
A) 1.75. 
B) 2. 
C) 3. 
D) 7. 
E) 4.

Question 17

Use the figure below to answer the following questions.
   
Figure 11.4.4
-Refer to Figure 11.4.4,which illustrates the long-run average total cost curve.Which one of the following statements is false?

Accepted Answer

A) Economies of scale exist between 0 and Q0 units of output. 
B) Diseconomies of scale exist between 0 and Q1 units of output. 
C) Constant returns to scale exist between Q1 and Q2 units of output. 
D) Diseconomies of scale exist at quantities greater than Q2 units of output. 
E) Constant returns to scale exist between Q0 and Q1 units of output. 
A) Economies of scale exist between 0 and Q0 units of output. 
B) Diseconomies of scale exist between 0 and Q1 units of output. 
C) Constant returns to scale exist between Q1 and Q2 units of output. 
D) Diseconomies of scale exist at quantities greater than Q2 units of output. 
E) Constant returns to scale exist between Q0 and Q1 units of output.

Question 18

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.Marginal product of labour reaches its maximum when the number of workers increases from

Accepted Answer

A) zero to 1. 
B) 1 to 2. 
C) 2 to 3. 
D) 3 to 4. 
E) 4 to 5. 
A) zero to 1. 
B) 1 to 2. 
C) 2 to 3. 
D) 3 to 4. 
E) 4 to 5.

Question 19

Which of the following quotes best illustrates the idea of fixed cost?

Accepted Answer

A) "As we increase output, per-unit costs fall." 
B) "My primary source of overhead cost is the cost of running the head office." 
C) "If I need to, I can negotiate more overtime with my work force to meet unexpected orders." 
D) "If I double the number of workers and trucks, I get only 80 percent more packages delivered." 
E) None of the above. 
A) "As we increase output, per-unit costs fall." 
B) "My primary source of overhead cost is the cost of running the head office." 
C) "If I need to, I can negotiate more overtime with my work force to meet unexpected orders." 
D) "If I double the number of workers and trucks, I get only 80 percent more packages delivered." 
E) None of the above.

Question 20

Use the figure below to answer the following questions.
   
Figure 11.4.2
-Refer to Figure 11.4.2,which illustrates the short-run average total cost curves for four different plant sizes.Which curve represents the average total cost for the largest of the four plant sizes?

Accepted Answer

A) ATCA 
B) ATCB 
C) ATCC 
D) ATCD 
E) either ATCC or ATCD 
A) ATCA 
B) ATCB 
C) ATCC 
D) ATCD 
E) either ATCC or ATCD

Exam 11: Output and Costs

The marginal cost curve slopes upward due to

Use the table below to answer the following questions. Table 11.2.2 -Refer to Table 11.2.2 which gives Tania's total product schedule.The marginal product when the number of workers increases from 2 to 3 is

If capital is a variable input in a production process,the law of diminishing marginal returns implies that

Use the table below to answer the following question. Table 11.2.4 -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.

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.Average product of labour reaches its maximum for the ________ worker.

Which of the following quotes best illustrates the idea of average product?

Use the table below to answer the following questions. Table 11.3.1 -Refer to Table 11.3.1,which gives Tania's total cost schedule.The average fixed cost of producing 9 teapots per day is

If energy (E)is the only input used to produce output (Q),what is the formula for average product of energy?

Table 11.2.1 -Refer to Table 11.2.1 which gives Tania's total product schedule.The marginal product when the firm increases the number of workers from 3 to 4 per day is

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

The short run refers to a time period

Use the figure below to answer the following questions. Figure 11.3.2 -Refer to Figure 11.3.2,which illustrates short-run average and marginal cost curves.Which one of the following statements is false?

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

The marginal cost curve slopes downward at low outputs because of ________.The marginal cost curve eventually slopes upward because of ________.

Use the table below to answer the following questions. Table 11.2.3 -Refer to Table 11.2.3.The value of A is

Use the figure below to answer the following questions. Figure 11.4.4 -Refer to Figure 11.4.4,which illustrates the long-run average total cost curve.Which one of the following statements is false?

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.Marginal product of labour reaches its maximum when the number of workers increases from

Which of the following quotes best illustrates the idea of fixed cost?

Use the figure below to answer the following questions. Figure 11.4.2 -Refer to Figure 11.4.2,which illustrates the short-run average total cost curves for four different plant sizes.Which curve represents the average total cost for the largest of the four plant sizes?

What Is Economics?

The Economic Problem

Demand and Supply

Elasticity

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Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Perfect Competition

Monopoly

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Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: The Keynesian Model

Canadian Inflation, Unemployment, and Business Cycle

Fiscal Policy

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The marginal cost curve slopes downward at low outputs because of .The marginal cost curve eventually slopes upward because of .