Question 1

The marginal product and average product curves

Accepted Answer

A)  intersect at the maximum point of the marginal product curve. 
B)  do not intersect at any predictable point. 
C)  intersect at the maximum point of the average product curve. 
D)  never intersect. 
A)  intersect at the maximum point of the marginal product curve. 
B)  do not intersect at any predictable point. 
C)  intersect at the maximum point of the average product curve. 
D)  never intersect.

Question 2

-In the above table, the marginal product of the 7th worker is 6. What is the total product when 7 workers are employed?

Accepted Answer

A)  70 
B)  76 
C)  68 
D)  72 
A)  70 
B)  76 
C)  68 
D)  72

Question 3

The average product of labour is equal to the

Accepted Answer

A)  slope of the marginal product of labour curve. 
B)  total number of workers hired divided by the total product. 
C)  total product divided by the total number of workers hired. 
D)  Both answers B and C are correct. 
A)  slope of the marginal product of labour curve. 
B)  total number of workers hired divided by the total product. 
C)  total product divided by the total number of workers hired. 
D)  Both answers B and C are correct.

Question 4

"Diminishing marginal returns" refer to a situation in which the

Accepted Answer

A)  average product of the next worker hired is less than the average product of the previous worker hired. 
B)  marginal product of the next worker hired is less than the marginal product of the previous worker hired. 
C)  average cost of the next worker hired is less than the average cost of the previous worker hired. 
D)  marginal cost of the next worker hired is less than the marginal cost of the previous worker hired. 
A)  average product of the next worker hired is less than the average product of the previous worker hired. 
B)  marginal product of the next worker hired is less than the marginal product of the previous worker hired. 
C)  average cost of the next worker hired is less than the average cost of the previous worker hired. 
D)  marginal cost of the next worker hired is less than the marginal cost of the previous worker hired.

Question 5

-In the above figure, the intersection of curves A and B is the point at which

Accepted Answer

A)  average total cost is minimised. 
B)  total product is maximised. 
C)  average variable cost is minimised. 
D)  average fixed cost is minimised. 
A)  average total cost is minimised. 
B)  total product is maximised. 
C)  average variable cost is minimised. 
D)  average fixed cost is minimised.

Question 6

-The table above gives costs at Jan's Bike Shop. Unfortunately, Jan's record keeping has been patchy. Each worker is paid $100 a day. Labour costs are the only variable cost of production. What is the total fixed cost of producing 64 bikes?

Accepted Answer

A)  $500 
B)  $300 
C)  $400 
D)  $200 
A)  $500 
B)  $300 
C)  $400 
D)  $200

Question 7

Which of the following would be classified as a fixed cost for the local supermarket?

Accepted Answer

A)  The rent for the six- year lease for the building the store uses 
B)  The cost of the boxes of cereal sold in the store 
C)  The payroll tax the store pays the government on the workers' income 
D)  The salary and any overtime paid to the store's manager 
A)  The rent for the six- year lease for the building the store uses 
B)  The cost of the boxes of cereal sold in the store 
C)  The payroll tax the store pays the government on the workers' income 
D)  The salary and any overtime paid to the store's manager

Question 8

-Cindy's Shirts' production function is shown in the above table. Cindy rents two sewing machines for $30 a day each and hires workers at a daily wage rate of $40 per worker. What is the marginal cost when production increases from 18 to 20 units per day?

Accepted Answer

A)  $40.00 
B)  $10.00 
C)  $20.00 
D)  $8.00 
A)  $40.00 
B)  $10.00 
C)  $20.00 
D)  $8.00

Question 9

Tudor's Deli and Catering could have sold their delivery van on December 31, 2010 for $16,000. If they could sell the same van on December 31, 2011 for $13,000, then the economic depreciation in 2011 for this van

Accepted Answer

A)  is $29,000. 
B)  is $13,000. 
C)  is $16,000. 
D)  is $3,000. 
A)  is $29,000. 
B)  is $13,000. 
C)  is $16,000. 
D)  is $3,000.

Question 10

-In the above figure, as output increases, the distance between curves B and C decreases because

Accepted Answer

A)  there are increasing marginal costs as output increases. 
B)  average fixed cost decreases as output increases. 
C)  total cost decreases as output increases. 
D)  there are diminishing returns to average total cost. 
A)  there are increasing marginal costs as output increases. 
B)  average fixed cost decreases as output increases. 
C)  total cost decreases as output increases. 
D)  there are diminishing returns to average total cost.

Question 11

-The above figure shows the costs at Barney's Bagel Bakery. Up to which level of output will increasing marginal returns in production be experienced at Barney's Bagel Bakery?

Accepted Answer

A)  Up to 2,000 bagels 
B)  Up to 3,000 bagels 
C)  Up to 500 bagels 
D)  Up to 3,500 bagels 
A)  Up to 2,000 bagels 
B)  Up to 3,000 bagels 
C)  Up to 500 bagels 
D)  Up to 3,500 bagels

Question 12

When a firm experiences economies of scale, its _______ cost curve slopes _______ as output increases.

Accepted Answer

A)  long- run average; downward 
B)  short- run average total; downward 
C)  long- run average; upward 
D)  short- run marginal cost; downward 
A)  long- run average; downward 
B)  short- run average total; downward 
C)  long- run average; upward 
D)  short- run marginal cost; downward

Question 13

When long- run average cost decreases as output increases there are definitely
I. increasing marginal returns.
II. economies of scale.

Accepted Answer

A)  Only I 
B)  Only II 
C)  Both I and II 
D)  Neither I nor II 
A)  Only I 
B)  Only II 
C)  Both I and II 
D)  Neither I nor II

Question 14

Increasing marginal returns to labour might occur at low levels of labour input because of

Accepted Answer

A)  increasing average costs. 
B)  decreasing use of machinery and increasing use of technology. 
C)  differing factor proportions. 
D)  increasing specialisation of tasks. 
A)  increasing average costs. 
B)  decreasing use of machinery and increasing use of technology. 
C)  differing factor proportions. 
D)  increasing specialisation of tasks.

Question 15

-The above table shows the total product schedule for the campus bookshop. If each employee is paid $6 per hour, what is the average variable cost of selling 83 books per hour (assuming labour costs are the only variable costs of production)?

Accepted Answer

A)  $0.43 per book 
B)  $2.30 per book 
C)  $0.07 per book 
D)  $6.00 per book 
A)  $0.43 per book 
B)  $2.30 per book 
C)  $0.07 per book 
D)  $6.00 per book

Question 16

The above table shows the total product of producing hats. The marginal product of the 4th worker is equal to

Accepted Answer

A)  25 baseball hats. 
B)  7 baseball hats. 
C)  21 baseball hats. 
D)  6.25 baseball hats. 
A)  25 baseball hats. 
B)  7 baseball hats. 
C)  21 baseball hats. 
D)  6.25 baseball hats.

Question 17

A normal profit for a self- employed entrepreneur is
I. an opportunity cost.
II. part of the implicit rental rate of the funds invested in the business.

Accepted Answer

A)  Only I 
B)  Only II 
C)  Both I and II 
D)  Neither I nor II 
A)  Only I 
B)  Only II 
C)  Both I and II 
D)  Neither I nor II

Question 18

A firm's opportunity costs _______.

Accepted Answer

A)  increase when economies of scope exist 
B)  include the cost of using resources owned by the firm 
C)  equal the cost of resources it buys from others in the market 
D)  do not include any opportunity costs for resources the owner suppliers 
A)  increase when economies of scope exist 
B)  include the cost of using resources owned by the firm 
C)  equal the cost of resources it buys from others in the market 
D)  do not include any opportunity costs for resources the owner suppliers

Question 19

-In the figure above, curve C is the _______ curve.

Accepted Answer

A)  average fixed cost 
B)  marginal cost 
C)  average variable cost 
D)  average total cost 
A)  average fixed cost 
B)  marginal cost 
C)  average variable cost 
D)  average total cost

Question 20

As output increases, marginal cost will eventually

Accepted Answer

A)  decrease because of the law of diminishing returns. 
B)  increase because of the law of increasing returns. 
C)  increase because of the law of diminishing returns. 
D)  decrease because of the law of increasing returns. 
A)  decrease because of the law of diminishing returns. 
B)  increase because of the law of increasing returns. 
C)  increase because of the law of diminishing returns. 
D)  decrease because of the law of increasing returns.

The marginal product and average product curves

-In the above table, the marginal product of the 7th worker is 6. What is the total product when 7 workers are employed?

The average product of labour is equal to the

"Diminishing marginal returns" refer to a situation in which the

-In the above figure, the intersection of curves A and B is the point at which

-The table above gives costs at Jan's Bike Shop. Unfortunately, Jan's record keeping has been patchy. Each worker is paid $100 a day. Labour costs are the only variable cost of production. What is the total fixed cost of producing 64 bikes?

Which of the following would be classified as a fixed cost for the local supermarket?

-Cindy's Shirts' production function is shown in the above table. Cindy rents two sewing machines for $30 a day each and hires workers at a daily wage rate of $40 per worker. What is the marginal cost when production increases from 18 to 20 units per day?

Tudor's Deli and Catering could have sold their delivery van on December 31, 2010 for $16,000. If they could sell the same van on December 31, 2011 for $13,000, then the economic depreciation in 2011 for this van

-In the above figure, as output increases, the distance between curves B and C decreases because

-The above figure shows the costs at Barney's Bagel Bakery. Up to which level of output will increasing marginal returns in production be experienced at Barney's Bagel Bakery?

When a firm experiences economies of scale, its _ cost curve slopes _ as output increases.

When long- run average cost decreases as output increases there are definitely I. increasing marginal returns. II. economies of scale.

Increasing marginal returns to labour might occur at low levels of labour input because of

-The above table shows the total product schedule for the campus bookshop. If each employee is paid $6 per hour, what is the average variable cost of selling 83 books per hour (assuming labour costs are the only variable costs of production)?

The above table shows the total product of producing hats. The marginal product of the 4th worker is equal to

A normal profit for a self- employed entrepreneur is I. an opportunity cost. II. part of the implicit rental rate of the funds invested in the business.

A firm's opportunity costs _______.

-In the figure above, curve C is the _______ curve.

As output increases, marginal cost will eventually

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Public Choices and Public Goods

Economics of the Environment

Monopoly and Its Regulation

Economic Inequality

Consumer Choices and Constraints

Perfect Competition

Monopolistic Competition

Oligopoly Games and Strategy

Decisions in Factor Markets

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Exam 13: Producer Choices and Constraints

The marginal product and average product curves

-In the above table, the marginal product of the 7th worker is 6. What is the total product when 7 workers are employed?

The average product of labour is equal to the

"Diminishing marginal returns" refer to a situation in which the

-In the above figure, the intersection of curves A and B is the point at which

-The table above gives costs at Jan's Bike Shop. Unfortunately, Jan's record keeping has been patchy. Each worker is paid $100 a day. Labour costs are the only variable cost of production. What is the total fixed cost of producing 64 bikes?

Which of the following would be classified as a fixed cost for the local supermarket?

-Cindy's Shirts' production function is shown in the above table. Cindy rents two sewing machines for $30 a day each and hires workers at a daily wage rate of $40 per worker. What is the marginal cost when production increases from 18 to 20 units per day?

Tudor's Deli and Catering could have sold their delivery van on December 31, 2010 for $16,000. If they could sell the same van on December 31, 2011 for $13,000, then the economic depreciation in 2011 for this van

-In the above figure, as output increases, the distance between curves B and C decreases because

-The above figure shows the costs at Barney's Bagel Bakery. Up to which level of output will increasing marginal returns in production be experienced at Barney's Bagel Bakery?

When a firm experiences economies of scale, its _______ cost curve slopes _______ as output increases.

When long- run average cost decreases as output increases there are definitely I. increasing marginal returns. II. economies of scale.

Increasing marginal returns to labour might occur at low levels of labour input because of

-The above table shows the total product schedule for the campus bookshop. If each employee is paid $6 per hour, what is the average variable cost of selling 83 books per hour (assuming labour costs are the only variable costs of production)?

The above table shows the total product of producing hats. The marginal product of the 4th worker is equal to

A normal profit for a self- employed entrepreneur is I. an opportunity cost. II. part of the implicit rental rate of the funds invested in the business.

A firm's opportunity costs _______.

-In the figure above, curve C is the _______ curve.

As output increases, marginal cost will eventually

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Public Choices and Public Goods

Economics of the Environment

Monopoly and Its Regulation

Economic Inequality

Consumer Choices and Constraints

Perfect Competition

Monopolistic Competition

Oligopoly Games and Strategy

Decisions in Factor Markets

Filters

When a firm experiences economies of scale, its _ cost curve slopes _ as output increases.