Question 1

-Using the above table, we see that when output is 4 units, average variable cost equals

Accepted Answer

A) $24.00. 
B) $14.00. 
C) $3.50. 
D) $6.00. 
A) $24.00. 
B) $14.00. 
C) $3.50. 
D) $6.00.

Question 2

At Phil's Hot Dog Stand, we found the following: 4 laborers produced 66 hot dogs
5 laborers produced 76 hot dogs
6 laborers produced 84 hot dogs
7 laborers produced 88 hot dogs
What was the marginal physical product of the seventh laborer?

Accepted Answer

A) 8 hot dogs 
B) 10 hot dogs 
C) 4 hot dogs 
D) none of the above due to insufficient information 
A) 8 hot dogs 
B) 10 hot dogs 
C) 4 hot dogs 
D) none of the above due to insufficient information

Question 3

The long run is defined as the time period in which

Accepted Answer

A) the firm can vary only one input. 
B) the firm can make positive economic profits. 
C) all factors of production can be altered. 
D) the firm can alter its rate of production. 
A) the firm can vary only one input. 
B) the firm can make positive economic profits. 
C) all factors of production can be altered. 
D) the firm can alter its rate of production.

Question 4

-Refer to the above table. What does the marginal product equal when the quantity of labor goes from 3 to 4?

Accepted Answer

A) 9 
B) 18 
C) 72 
D) 216 
A) 9 
B) 18 
C) 72 
D) 216

Question 5

Which of the following statements is correct?

Accepted Answer

A) TC = TFC + TVC 
B) TC = average product + marginal product 
C) TC = TFC - TVC 
D) TC = average physical product - marginal physical product 
A) TC = TFC + TVC 
B) TC = average product + marginal product 
C) TC = TFC - TVC 
D) TC = average physical product - marginal physical product

Question 6

Use the information from the below table to answer following question(s).  
-In the above table, the average product for 5 units of labor is

Accepted Answer

A) 20.0. 
B) 22.5. 
C) 25.0. 
D) 15.0. 
A) 20.0. 
B) 22.5. 
C) 25.0. 
D) 15.0.

Question 7

The total cost of the firm

Accepted Answer

A) includes explicit costs but excludes implicit costs. 
B) includes implicit costs but excludes explicit costs. 
C) includes implicit and explicit costs. 
D) includes implicit and explicit costs but excludes a normal rate of return on investment. 
A) includes explicit costs but excludes implicit costs. 
B) includes implicit costs but excludes explicit costs. 
C) includes implicit and explicit costs. 
D) includes implicit and explicit costs but excludes a normal rate of return on investment.

Question 8

-In a map showing short-run cost functions, one curve begins at the origin and rises as output expands. It is called the

Accepted Answer

A) the marginal cost curve. 
B) the total fixed cost curve. 
C) the total cost curve. 
D) the total variable cost curve. 
A) the marginal cost curve. 
B) the total fixed cost curve. 
C) the total cost curve. 
D) the total variable cost curve.

Question 9

-Refer to the above table. At an output of 5 units, average total costs are

Accepted Answer

A) $18. 
B) $19. 
C) $37. 
D) $185. 
A) $18. 
B) $19. 
C) $37. 
D) $185.

Question 10

An increase in long-run average costs resulting from increases in output is

Accepted Answer

A) attributed to economies of scale. 
B) attributed to diseconomies to scale. 
C) attributed to constant returns to scale. 
D) attributed to the law of diminishing marginal product. 
A) attributed to economies of scale. 
B) attributed to diseconomies to scale. 
C) attributed to constant returns to scale. 
D) attributed to the law of diminishing marginal product.

Question 11

-Use the above figure. At an output equal to "Q" the average fixed cost for the firm will be the line segment

Accepted Answer

A) DE. 
B) AB. 
C) BE. 
D) CD. 
A) DE. 
B) AB. 
C) BE. 
D) CD.

Question 12

Use the information from the below table to answer following question(s).  
-In the above table, the marginal product of the sixth worker is

Accepted Answer

A) 10. 
B) 25. 
C) 20. 
D) 15. 
A) 10. 
B) 25. 
C) 20. 
D) 15.

Question 13

In the above table, the marginal cost of the fourth unit is

Accepted Answer

A) $1.00. 
B) $2.00. 
C) $6.00. 
D) $24.00. 
A) $1.00. 
B) $2.00. 
C) $6.00. 
D) $24.00.

Question 14

-In the above table, what is the marginal cost to produce the 5th unit of output?

Accepted Answer

A) $80 
B) $60 
C) $55 
D) $20 
A) $80 
B) $60 
C) $55 
D) $20

Question 15

Production functions indicate the relationship between

Accepted Answer

A) factor costs and output prices. 
B) factor inputs and the quantity of output. 
C) the value of inputs and average costs. 
D) factor inputs and factor prices. 
A) factor costs and output prices. 
B) factor inputs and the quantity of output. 
C) the value of inputs and average costs. 
D) factor inputs and factor prices.

Question 16

For a wheat farmer in the middle of harvesting system, a fixed input would be

Accepted Answer

A) workers hired. 
B) combines rented. 
C) the land that had been planted. 
D) trucks rented to haul the wheat. 
A) workers hired. 
B) combines rented. 
C) the land that had been planted. 
D) trucks rented to haul the wheat.

Question 17

A horizontal long-run average cost curve indicates

Accepted Answer

A) constant returns to scale. 
B) diseconomies of scale. 
C) constant marginal physical product. 
D) economies of scale. 
A) constant returns to scale. 
B) diseconomies of scale. 
C) constant marginal physical product. 
D) economies of scale.

Question 18

A production function is a(n)

Accepted Answer

A) cost relationship. 
B) economic relationship. 
C) accounting relationship. 
D) technological relationship. 
A) cost relationship. 
B) economic relationship. 
C) accounting relationship. 
D) technological relationship.

Question 19

-In the above table, what is the average variable cost to produce 2 units of output?

Accepted Answer

A) $30 
B) $60 
C) $55 
D) $20 
A) $30 
B) $60 
C) $55 
D) $20

Question 20

-Using the above table, the marginal product of the 4th worker is

Accepted Answer

A) 12. 
B) 13. 
C) 14. 
D) 15. 
A) 12. 
B) 13. 
C) 14. 
D) 15.

Exam 22: The Firm: Cost and Output Determination

-Using the above table, we see that when output is 4 units, average variable cost equals

At Phil's Hot Dog Stand, we found the following: 4 laborers produced 66 hot dogs 5 laborers produced 76 hot dogs 6 laborers produced 84 hot dogs 7 laborers produced 88 hot dogs What was the marginal physical product of the seventh laborer?

The long run is defined as the time period in which

-Refer to the above table. What does the marginal product equal when the quantity of labor goes from 3 to 4?

Which of the following statements is correct?

Use the information from the below table to answer following question(s). -In the above table, the average product for 5 units of labor is

The total cost of the firm

-In a map showing short-run cost functions, one curve begins at the origin and rises as output expands. It is called the

-Refer to the above table. At an output of 5 units, average total costs are

An increase in long-run average costs resulting from increases in output is

-Use the above figure. At an output equal to "Q" the average fixed cost for the firm will be the line segment

Use the information from the below table to answer following question(s). -In the above table, the marginal product of the sixth worker is

In the above table, the marginal cost of the fourth unit is

-In the above table, what is the marginal cost to produce the 5th unit of output?

Production functions indicate the relationship between

For a wheat farmer in the middle of harvesting system, a fixed input would be

A horizontal long-run average cost curve indicates

A production function is a(n)

-In the above table, what is the average variable cost to produce 2 units of output?

-Using the above table, the marginal product of the 4th worker is

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