Question 1

If two firms are identical in all respects except that one has more capital than another, the total product curve for the firm with more capital:

Accepted Answer

A) must equal the total product curve for the firm with less capital. 
B) will lie above the total product curve for the firm with less capital. 
C) will lie below the total product curve for the firm with less capital. 
D) will show no diminishing marginal returns. 
A) must equal the total product curve for the firm with less capital. 
B) will lie above the total product curve for the firm with less capital. 
C) will lie below the total product curve for the firm with less capital. 
D) will show no diminishing marginal returns.

Question 2

Figure: Short-Run Costs II     (Figure: Short-Run Costs II) Look at the figure Short-Run Costs II.Curve 3 is the cost curve.

Accepted Answer

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

Question 3

The larger the output, the greater the amount of variable input required to produce additional units.Called the ________ effect, this leads to a _.

Accepted Answer

A) spreading; lower average fixed cost. 
B) spreading; higher average fixed cost. 
C) diminishing returns; lower average variable cost. 
D) diminishing returns; higher average variable cost. 
A) spreading; lower average fixed cost. 
B) spreading; higher average fixed cost. 
C) diminishing returns; lower average variable cost. 
D) diminishing returns; higher average variable cost.

Question 4

(Table: Cost Data) Look at the table Cost Data, which shows data for a designer purse factory.The average total cost of producing 5 purses is:

Accepted Answer

A) $10 
B) $38 
C) $48 
D) $240 
A) $10 
B) $38 
C) $48 
D) $240

Question 5

Average variable cost equals all of the following except:

Accepted Answer

A) variable cost divided by output. 
B) (total cost - fixed cost) divided by output. 
C) average total cost minus average fixed cost. 
D) variable cost times output. 
A) variable cost divided by output. 
B) (total cost - fixed cost) divided by output. 
C) average total cost minus average fixed cost. 
D) variable cost times output.

Question 6

(Table: Cost Data) Look at the table Cost Data, which shows data for a designer purse factory.The marginal cost of producing the fifth purse is:

Accepted Answer

A) $60 
B) $50 
C) $35 
D) $20 
A) $60 
B) $50 
C) $35 
D) $20

Question 7

A farm can produce 1,000 bushels of wheat per year with two workers and 1,300 bushels of wheat per year with three workers.The marginal product of the third worker is:

Accepted Answer

A) 100 bushels. 
B) 300 bushels. 
C) 1,300 bushels. 
D) 2,300 bushels. 
A) 100 bushels. 
B) 300 bushels. 
C) 1,300 bushels. 
D) 2,300 bushels.

Question 8

(Table: Marie's Textbook Company) Look at the table Marie's Textbook Company.Marie has a small publishing company that produces textbooks.She has fixed costs of $500 per month and hires workers for $2,000 each per month.The table shows Marie's monthly production function.With as much precision as possible, calculate the following:
a) total cost of production when four workers are employed
b) the output level that produces the lowest average total cost
c) the price that Marie must charge in order to break even on the production of 130 textbooks

Accepted Answer

a) When four workers are employed, Marie

Question 9

(Table: Cost Data) Look at the table Cost Data, which shows data for a designer purse factory.The average variable cost of producing 5 purses is:

Accepted Answer

A) $10 
B) $38 
C) $48 
D) $190 
A) $10 
B) $38 
C) $48 
D) $190

Question 10

Janet's poodle grooming salon has a total cost curve expressed by the equation TC = 100 + 3Q₂, where Q is the quantity of dogs groomed.Given this expression, if Janet grooms five dogs, her total costs will be:

Accepted Answer

A) $100. 
B) $175. 
C) $225. 
D) $75. 
A) $100. 
B) $175. 
C) $225. 
D) $75.

Question 11

When an increase in the firm's output reduces its long-run average total cost, it undergoes:

Accepted Answer

A) increasing returns to scale. 
B) decreasing returns to scale. 
C) constant returns to scale. 
D) variable returns to scale. 
A) increasing returns to scale. 
B) decreasing returns to scale. 
C) constant returns to scale. 
D) variable returns to scale.

Question 12

The curve that shows the additional cost of producing each additional unit of output is called the:

Accepted Answer

A) average cost curve. 
B) total cost curve. 
C) marginal product curve. 
D) marginal cost curve. 
A) average cost curve. 
B) total cost curve. 
C) marginal product curve. 
D) marginal cost curve.

Question 13

When a firm produces a small amount of output, the spreading effect:

Accepted Answer

A) is stronger than the diminishing returns effect. 
B) is weaker than the diminishing returns effect. 
C) and diminishing returns effect are equal. 
D) will be zero. 
A) is stronger than the diminishing returns effect. 
B) is weaker than the diminishing returns effect. 
C) and diminishing returns effect are equal. 
D) will be zero.

Question 14

Figure: Long-Run and Short-Run Average Cost Curves     (Figure:Long-Run and Short-Run Average Cost Curves ) Look at the figure Long-Run and Short-Run Average Cost Curves.If a firm is producing at point C on the ATC2 but anticipates increasing output to 225,000 units in the long run, the firm will build a ________ plant and have _.

Accepted Answer

A) smaller; economies of scale 
B) smaller; diseconomies of scale 
C) bigger; economies of scale 
D) bigger; diseconomies of scale 
A) smaller; economies of scale 
B) smaller; diseconomies of scale 
C) bigger; economies of scale 
D) bigger; diseconomies of scale

Question 15

Total cost divided by the quantity of output produced is:

Accepted Answer

A) average total cost. 
B) average fixed cost. 
C) average product. 
D) marginal cost. 
A) average total cost. 
B) average fixed cost. 
C) average product. 
D) marginal cost.

Question 16

(Table: Costs of Producing Bagels) Look at the table Cost of Producing Bagels.The marginal cost of producing the sixth bagel is:

Accepted Answer

A) $0.10. 
B) $0.15. 
C) $0.20. 
D) $0.80. 
A) $0.10. 
B) $0.15. 
C) $0.20. 
D) $0.80.

Question 17

The curve that shows the additional cost of each additional unit of output is called the:
A.average cost curve.
B.total cost curve.
C.marginal product curve.D.marginal cost curve.

Accepted Answer

marginal c

Question 18

If marginal cost is greater than average total cost, then:

Accepted Answer

A) average total cost is increasing. 
B) average total cost is decreasing. 
C) average total cost is unchanged. 
D) marginal cost is decreasing. 
A) average total cost is increasing. 
B) average total cost is decreasing. 
C) average total cost is unchanged. 
D) marginal cost is decreasing.

Question 19

Diminishing marginal returns occur when:

Accepted Answer

A) each additional unit of a variable factor adds more to total output than the previous unit. 
B) an additional variable factor adds less to total output than the previous unit. 
C) the marginal product of a variable factor is increasing but at a decreasing rate. 
D) total product decreases. 
A) each additional unit of a variable factor adds more to total output than the previous unit. 
B) an additional variable factor adds less to total output than the previous unit. 
C) the marginal product of a variable factor is increasing but at a decreasing rate. 
D) total product decreases.

Question 20

A firm's marginal cost is:

Accepted Answer

A) the ratio of the change in total cost to the change in the quantity of output. 
B) the change in total cost divided by the change in labor input. 
C) the slope of the average fixed cost curve. 
D) total cost divided by output. 
A) the ratio of the change in total cost to the change in the quantity of output. 
B) the change in total cost divided by the change in labor input. 
C) the slope of the average fixed cost curve. 
D) total cost divided by output.

If two firms are identical in all respects except that one has more capital than another, the total product curve for the firm with more capital:

Figure: Short-Run Costs II (Figure: Short-Run Costs II) Look at the figure Short-Run Costs II.Curve 3 is the cost curve.

The larger the output, the greater the amount of variable input required to produce additional units.Called the ________ effect, this leads to a _.

(Table: Cost Data) Look at the table Cost Data, which shows data for a designer purse factory.The average total cost of producing 5 purses is:

Average variable cost equals all of the following except:

(Table: Cost Data) Look at the table Cost Data, which shows data for a designer purse factory.The marginal cost of producing the fifth purse is:

A farm can produce 1,000 bushels of wheat per year with two workers and 1,300 bushels of wheat per year with three workers.The marginal product of the third worker is:

(Table: Cost Data) Look at the table Cost Data, which shows data for a designer purse factory.The average variable cost of producing 5 purses is:

Janet's poodle grooming salon has a total cost curve expressed by the equation TC = 100 + 3Q₂, where Q is the quantity of dogs groomed.Given this expression, if Janet grooms five dogs, her total costs will be:

When an increase in the firm's output reduces its long-run average total cost, it undergoes:

The curve that shows the additional cost of producing each additional unit of output is called the:

When a firm produces a small amount of output, the spreading effect:

Total cost divided by the quantity of output produced is:

(Table: Costs of Producing Bagels) Look at the table Cost of Producing Bagels.The marginal cost of producing the sixth bagel is:

The curve that shows the additional cost of each additional unit of output is called the: A.average cost curve. B.total cost curve. C.marginal product curve.D.marginal cost curve.

If marginal cost is greater than average total cost, then:

Diminishing marginal returns occur when:

A firm's marginal cost is:

First Principles

Economic Models: Trade-Offs and Trade

Supply and Demand

Consumer and Producer Surplus

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Filters

Exam 11: Behind the Supply Curve: Inputs and Costs

If two firms are identical in all respects except that one has more capital than another, the total product curve for the firm with more capital:

Figure: Short-Run Costs II (Figure: Short-Run Costs II) Look at the figure Short-Run Costs II.Curve 3 is the cost curve.

The larger the output, the greater the amount of variable input required to produce additional units.Called the ________ effect, this leads to a _.

(Table: Cost Data) Look at the table Cost Data, which shows data for a designer purse factory.The average total cost of producing 5 purses is:

Average variable cost equals all of the following except:

(Table: Cost Data) Look at the table Cost Data, which shows data for a designer purse factory.The marginal cost of producing the fifth purse is:

A farm can produce 1,000 bushels of wheat per year with two workers and 1,300 bushels of wheat per year with three workers.The marginal product of the third worker is:

(Table: Cost Data) Look at the table Cost Data, which shows data for a designer purse factory.The average variable cost of producing 5 purses is:

Janet's poodle grooming salon has a total cost curve expressed by the equation TC = 100 + 3Q₂, where Q is the quantity of dogs groomed.Given this expression, if Janet grooms five dogs, her total costs will be:

When an increase in the firm's output reduces its long-run average total cost, it undergoes:

The curve that shows the additional cost of producing each additional unit of output is called the:

When a firm produces a small amount of output, the spreading effect:

Total cost divided by the quantity of output produced is:

(Table: Costs of Producing Bagels) Look at the table Cost of Producing Bagels.The marginal cost of producing the sixth bagel is:

The curve that shows the additional cost of each additional unit of output is called the: A.average cost curve. B.total cost curve. C.marginal product curve.D.marginal cost curve.

If marginal cost is greater than average total cost, then:

Diminishing marginal returns occur when:

A firm's marginal cost is:

First Principles

Economic Models: Trade-Offs and Trade

Supply and Demand

Consumer and Producer Surplus

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Filters