Question 1

Fill in the blanks in the table below and answer the next   questions:

-In the above table, 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 2

Refer to the following:
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.

$$\begin{array} { c c } 
\text { units of } & \text { units of } \
\text { Labor } & \text { Output } \
\hline 2 & 10 \
4 & 26 \
0 & 46 \
8 & 60 \
10 & 72 \
12 & 80
\end{array}$$
-If the firm produces 80 units of output, what is its total cost of production?

Accepted Answer

A)  $540 
B)  $1,600 
C)  $1,900 
D)  $5,040 
E)  none of the above 
A)  $540 
B)  $1,600 
C)  $1,900 
D)  $5,040 
E)  none of the above

Question 3

Refer to the following:
"At Huffy's ... bicycle factory, 1,700 employees turn out 15,000 bicycles a day (in 1987). Five years ago, it required 2,200 workers to make 10,000 bikes daily." (The Wall Street Journal).
-Holding all else equal, we can conclude that, over the past five 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 4

Refer to the following:

$\begin{array}{ccccccccc} 
& & \text { Total } & \text { Total } & \text { Average } & \text { Average } & \text { Average } & \
& \text { Total } & \text { Fixed } & \text { Variable } & \text { Fixed } & \text { Variable } & \text { Total } & \text { Marginal } \
\text { Output } & \text { Cost } & \text { Cost } & \text { Cost } & \text { Cost } & \text { Cost } & \text { Cost } & \text { Cost }\
\hline 100&560&-&60&-&-&-&-\200&-&-&-&-&-&-&4.00\300&-&-&-&-&4.00-&-&-\400&-&-&-&-&-&7.00&-\
\end{array}$
-What is the total fixed cost when 400 units of output are produced?

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 5

Fill in the blank.
a. The definition of the long run is _________________________________.
b. The definition of the short run is ________________________________.

Accepted Answer

a. the period in which all inp

Question 6

If a firm is producing a given level of output in a technically efficient manner, then it must be the case that

Accepted Answer

A)  this is the lowest cost method of producing that output. 
B)  each input is producing its maximum marginal product. 
C)  this output level is the most that can be produced with the given levels of inputs. 
D)  both a and c 
E)  all of the above 
A)  this is the lowest cost method of producing that output. 
B)  each input is producing its maximum marginal product. 
C)  this output level is the most that can be produced with the given levels of inputs. 
D)  both a and c 
E)  all of the above

Question 7

Refer to the following:

$\begin{array}{rr}
\text { Output } & \text { Total Cost } \
\hline 0 & \$ 300 \
50 & 800 \
100 & 1050 \
150 & 1650 \
200 & 2400
\end{array}$
-The additional cost of producing the 170th unit of output is:

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 8

If a firm is producing a given level of output in an economically efficient manner, then it must be the case that

Accepted Answer

A)  this is the lowest cost method of producing that output. 
B)  each input is producing its maximum marginal product. 
C)  this output level is the most that can be produced with the given level of inputs. 
D)  both a and c 
E)  none of the above 
A)  this is the lowest cost method of producing that output. 
B)  each input is producing its maximum marginal product. 
C)  this output level is the most that can be produced with the given level of inputs. 
D)  both a and c 
E)  none of the above

Question 9

Refer to the following:
  
-In the above figure, what is the AVERAGE total cost of producing 10 units of output?

Accepted Answer

A)  $4 
B)  $8 
C)  $12 
D)  $50 
E)  $360 
A)  $4 
B)  $8 
C)  $12 
D)  $50 
E)  $360

Question 10

Refer to the following:
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.
  
-what output does the firm reach minimum average variable cost?

Accepted Answer

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

Question 11

Refer to the following:

$\begin{array}{cccc}
\begin{array}{c}
\text { Number of } \
\text { Workers }
\end{array} & \begin{array}{c}
\text { Total } \
\text { Product }
\end{array} & \begin{array}{c}
\text { Average } \
\text { Product }
\end{array} & \begin{array}{c}
\text { Marginal } \
\text { Product }
\end{array} \
\hline 5 &- & 28 & -30 \
10 & - & - & 30\
15 & 420 & - &- \
20 &- & - &22\
\end{array}$
-How much does the 13th worker add to total output?

Accepted Answer

A)  28 units 
B)  29 units 
C)  130 units 
D)  420 units 
E)  none of the above 
A)  28 units 
B)  29 units 
C)  130 units 
D)  420 units 
E)  none of the above

Question 12

Refer to the following:
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 13

A short-run cost function assumes that

Accepted Answer

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

Question 14

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 15

Refer to the following:

$\begin{array}{rr}
\text { Output } & \text { Total Cost } \
\hline 0 & \$ 300 \
50 & 800 \
100 & 1050 \
150 & 1650 \
200 & 2400
\end{array}$
-What is average fixed cost when 200 units of output are produced?

Accepted Answer

A)  $2.80 
B)  $80 
C)  $150 
D)  $1.50 
E)  none of the above 
A)  $2.80 
B)  $80 
C)  $150 
D)  $1.50 
E)  none of the above

Question 16

Refer to the following:
Amount of total output produced from various combinations of labor and capital.

$\begin{array}{cccc} 
&\text { Units of Capital }\
&& 1 & 2 & 3 \
\hline  &1 & 80 & 100 & 120 \
\text {Units }&2 & 180 & 220 & 260 \
\text {of }&3 & 270 & 330 & 390 \
\text {Labor }&4 & 340 & 420 & 500 \
&5 & 390 & 490 & 590 \
&6 & 410 & 530 & 650
\end{array}$
-If labor is fixed at 5 units, how much does the second unit of capital add to total output?

Accepted Answer

A)  490 
B)  390 
C)  50 
D)  100 
E)  none of the above 
A)  490 
B)  390 
C)  50 
D)  100 
E)  none of the above

Question 17

In order to answer this question you should fill in the blanks in the following table.
 $\begin{array}{lccc}
\text { Unit of } & \text { Total } & \text { Average Product } & \text { Marginal } \
\text { Labor } & \text { Product }(T P) & (A P) & \text { Product }(M P)\\hline
1 & - & 30 & - \
2 & - & - & 40 \
3 & 90 & -&-\
4&-&-&10
\end{array}$ 
a. At 2 units of labor, TP = ______ and AP = ______.
b. At 3 units of labor, AP = ______ and MP = ______.
c. At 4 units of labor, TP = ______ and AP = ______.

Accepted Answer

a. 70; 35

Question 18

Refer to the following:

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 variable cost?

Accepted Answer

A)  $0.63 
B)  $1.60 
C)  $3.20 
D)  $10.00 
E)  none of the above 
A)  $0.63 
B)  $1.60 
C)  $3.20 
D)  $10.00 
E)  none of the above

Question 19

Refer to the following:

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 20

Refer to the following:
 $$\begin{array} { c c c c } 
\begin{array} { c } 
\text { Units } \
\text { of Labor }
\end{array} & \begin{array} { c } 
\text { Totel } \
\text { Praduet }
\end{array} & \begin{array} { c } 
\text { Average } \
\text { Product }
\end{array} & \begin{array} { c } 
\text { Narginal } \
\text { Produet }
\end{array} \
\hline 1 & - & - & 100 \
2 & - & 125 & - \
3 & 300 & - & - \
4 & - & - & 20\
5&290&-&-
\end{array}$$
-In the table above, what is the average product of four units of labor?

Accepted Answer

A)  20 
B)  60 
C)  80 
D)  100 
E)  350 
A)  20 
B)  60 
C)  80 
D)  100 
E)  350

Fill in the blanks in the table below and answer the next questions: -In the above table, the marginal product of the fifth unit of labor is

Refer to the following: 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 0 46 8 60 10 72 12 80 -If the firm produces 80 units of output, what is its total cost of production?

Refer to the following: "At Huffy's ... bicycle factory, 1,700 employees turn out 15,000 bicycles a day (in 1987). Five years ago, it required 2,200 workers to make 10,000 bikes daily." (The Wall Street Journal). -Holding all else equal, we can conclude that, over the past five years,

Fill in the blank. a. The definition of the long run is _. b. The definition of the short run is .

If a firm is producing a given level of output in a technically efficient manner, then it must be the case that

Refer to the following: Output Total Cost 0 \ 300 50 800 100 1050 150 1650 200 2400 -The additional cost of producing the 170th unit of output is:

If a firm is producing a given level of output in an economically efficient manner, then it must be the case that

Refer to the following: -In the above figure, what is the AVERAGE total cost of producing 10 units of output?

Refer to the following: 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. -what output does the firm reach minimum average variable cost?

Refer to the following: Number of Workers Total Product Average Product Marginal Product 5 - 28 -30 10 - - 30 15 420 - - 20 - - 22 -How much does the 13th worker add to total output?

Refer to the following: 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?

A short-run cost function assumes that

If average product is increasing, then marginal product

Refer to the following: Output Total Cost 0 \ 300 50 800 100 1050 150 1650 200 2400 -What is average fixed cost when 200 units of output are produced?

Refer to the following: 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 variable cost?

Refer to the following: 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?

Refer to the following: Units of Labor Totel Praduet Average Product Narginal Produet 1 - - 100 2 - 125 - 3 300 - - 4 - - 20 5 290 - - -In the table above, what is the average product of four units of labor?

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

Fill in the blanks in the table below and answer the next questions: -In the above table, the marginal product of the fifth unit of labor is

Refer to the following: 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 0 46 8 60 10 72 12 80 -If the firm produces 80 units of output, what is its total cost of production?

Refer to the following: "At Huffy's ... bicycle factory, 1,700 employees turn out 15,000 bicycles a day (in 1987). Five years ago, it required 2,200 workers to make 10,000 bikes daily." (The Wall Street Journal). -Holding all else equal, we can conclude that, over the past five years,

Fill in the blank. a. The definition of the long run is _________________________________. b. The definition of the short run is ________________________________.

If a firm is producing a given level of output in a technically efficient manner, then it must be the case that

Refer to the following: Output Total Cost 0 \ 300 50 800 100 1050 150 1650 200 2400 -The additional cost of producing the 170th unit of output is:

If a firm is producing a given level of output in an economically efficient manner, then it must be the case that

Refer to the following: -In the above figure, what is the AVERAGE total cost of producing 10 units of output?

Refer to the following: 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. -what output does the firm reach minimum average variable cost?

Refer to the following: Number of Workers Total Product Average Product Marginal Product 5 - 28 -30 10 - - 30 15 420 - - 20 - - 22 -How much does the 13th worker add to total output?

Refer to the following: 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?

A short-run cost function assumes that

If average product is increasing, then marginal product

Refer to the following: Output Total Cost 0 \ 300 50 800 100 1050 150 1650 200 2400 -What is average fixed cost when 200 units of output are produced?

Refer to the following: 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 variable cost?

Refer to the following: 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?

Refer to the following: Units of Labor Totel Praduet Average Product Narginal Produet 1 - - 100 2 - 125 - 3 300 - - 4 - - 20 5 290 - - -In the table above, what is the average product of four units of labor?

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

Fill in the blank. a. The definition of the long run is _. b. The definition of the short run is .