Question 1

Which one of the following statements is false?

Accepted Answer

A) Total variable cost plus total fixed cost equals total cost. 
B) Marginal cost equals the change in total cost divided by the change in output. 
C) Average total cost is calculated by dividing total cost by the level of output. 
D) The average cost curve is U-shaped. 
E) The total cost curve is U-shaped. 
A) Total variable cost plus total fixed cost equals total cost. 
B) Marginal cost equals the change in total cost divided by the change in output. 
C) Average total cost is calculated by dividing total cost by the level of output. 
D) The average cost curve is U-shaped. 
E) The total cost curve is U-shaped.

Question 2

Table 11.2.1
  
-Refer to Table 11.2.1 which gives Tania's total product schedule.Marginal product of labour reaches its maximum when the number of workers increases from

Accepted Answer

A) 0 to 1. 
B) 1 to 2. 
C) 2 to 3. 
D) 3 to 4. 
E) 4 to 5 
A) 0 to 1. 
B) 1 to 2. 
C) 2 to 3. 
D) 3 to 4. 
E) 4 to 5

Question 3

Choose the correct statement.

Accepted Answer

A) The long run is a period of time in which the quantity of at least one input is fixed. 
B) The short run is a period of time in which the firm has sufficient time to change all its inputs. 
C) The long run is a time frame that lasts for 10 years. 
D) In the short run, the firm's plant is fixed. 
E) A firm always has plenty of time to make decisions about changing its inputs no matter if it is in a short run or long run position. 
A) The long run is a period of time in which the quantity of at least one input is fixed. 
B) The short run is a period of time in which the firm has sufficient time to change all its inputs. 
C) The long run is a time frame that lasts for 10 years. 
D) In the short run, the firm's plant is fixed. 
E) A firm always has plenty of time to make decisions about changing its inputs no matter if it is in a short run or long run position.

Question 4

The average product of energy equals

Accepted Answer

A) the increase in total product divided by the increase in energy used. 
B) total product divided by the quantity of energy used. 
C) the slope of the total product curve. 
D) the slope of the marginal product curve. 
E) the difference between the total product and the marginal product of energy. 
A) the increase in total product divided by the increase in energy used. 
B) total product divided by the quantity of energy used. 
C) the slope of the total product curve. 
D) the slope of the marginal product curve. 
E) the difference between the total product and the marginal product of energy.

Question 5

Which type of cost does not change as the quantity of output produced changes?

Accepted Answer

A) average total cost 
B) marginal cost 
C) average fixed cost 
D) total fixed cost 
E) Both C and D are correct. 
A) average total cost 
B) marginal cost 
C) average fixed cost 
D) total fixed cost 
E) Both C and D are correct.

Question 6

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 plant has the lowest average total cost for an output rate of 5 sweaters a day?

Accepted Answer

A) Plant A 
B) Plant B 
C) Plant C 
D) Plant D 
E) none of the above 
A) Plant A 
B) Plant B 
C) Plant C 
D) Plant D 
E) none of the above

Question 7

The average product of labour equals

Accepted Answer

A) the slope of the total product curve. 
B) the slope of the marginal product curve. 
C) the increase in total product divided by the increase in labour employed. 
D) total product divided by the quantity of labour employed. 
E) the difference between the total product and the marginal product of labour. 
A) the slope of the total product curve. 
B) the slope of the marginal product curve. 
C) the increase in total product divided by the increase in labour employed. 
D) total product divided by the quantity of labour employed. 
E) the difference between the total product and the marginal product of labour.

Question 8

If the marginal product of the fifth worker is 34,then the total product of five workers

Accepted Answer

A) is 35. 
B) is 24. 
C) is 170. 
D) is 6.8. 
E) cannot be calculated with the information given. 
A) is 35. 
B) is 24. 
C) is 170. 
D) is 6.8. 
E) cannot be calculated with the information given.

Question 9

Diseconomies of scale are present when

Accepted Answer

A) the LRAC curve slopes downward. 
B) average total cost falls as input increases. 
C) average total cost rises as output increases. 
D) the LRAC curve is horizontal. 
E) total fixed cost increases. 
A) the LRAC curve slopes downward. 
B) average total cost falls as input increases. 
C) average total cost rises as output increases. 
D) the LRAC curve is horizontal. 
E) total fixed cost increases.

Question 10

The average variable cost curve will shift upward if

Accepted Answer

A) there is an increase in fixed cost. 
B) there is a technological advance. 
C) the price of the variable input decreases. 
D) the price of the variable input increases. 
E) the price of output increases. 
A) there is an increase in fixed cost. 
B) there is a technological advance. 
C) the price of the variable input decreases. 
D) the price of the variable input increases. 
E) the price of output increases.

Question 11

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 12

If ATC is falling,then MC must be

Accepted Answer

A) rising. 
B) falling. 
C) equal to ATC. 
D) above ATC. 
E) below ATC. 
A) rising. 
B) falling. 
C) equal to ATC. 
D) above ATC. 
E) below ATC.

Question 13

If the average variable cost of producing 10 units is $18 and the average variable cost of producing 11 units is $20,we know that,between 10 and 11 units of output,

Accepted Answer

A) marginal cost is increasing. 
B) average total cost is increasing. 
C) average fixed cost is increasing. 
D) total cost is either increasing or decreasing. 
E) none of the above. 
A) marginal cost is increasing. 
B) average total cost is increasing. 
C) average fixed cost is increasing. 
D) total cost is either increasing or decreasing. 
E) none of the above.

Exam 11: Output and Costs

Which one of the following statements is false?

Table 11.2.1 -Refer to Table 11.2.1 which gives Tania's total product schedule.Marginal product of labour reaches its maximum when the number of workers increases from

Choose the correct statement.

The average product of energy equals

Which type of cost does not change as the quantity of output produced changes?

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 plant has the lowest average total cost for an output rate of 5 sweaters a day?

The average product of labour equals

If the marginal product of the fifth worker is 34,then the total product of five workers

Diseconomies of scale are present when

The average variable cost curve will shift upward if

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?

If ATC is falling,then MC must be

If the average variable cost of producing 10 units is $18 and the average variable cost of producing 11 units is $20,we know that,between 10 and 11 units of output,

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