Question 1

The _____ is the increase in output that is produced when a firm hires an additional worker.

Accepted Answer

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

Question 2

Use the following to answer questions:  
-(Table: Cost Data) Look at the table Cost Data. The marginal cost of producing the second purse is:

Accepted Answer

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

Question 3

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 4

The _____ curve shows the quantities of output that can be obtained from different quantities of a variable input, assuming other inputs are fixed.

Accepted Answer

A)  total input 
B)  marginal input 
C)  total product 
D)  average total quantity 
A)  total input 
B)  marginal input 
C)  total product 
D)  average total quantity

Question 5

Diminishing returns are one explanation for diseconomies of scale.

Accepted Answer

A) True 
 B)False

Question 6

The long run refers to the period for which:

Accepted Answer

A)  a fixed input exists. 
B)  all inputs are variable. 
C)  marginal costs are decreasing. 
D)  diminishing returns raise marginal cost. 
A)  a fixed input exists. 
B)  all inputs are variable. 
C)  marginal costs are decreasing. 
D)  diminishing returns raise marginal cost.

Question 7

Average variable cost equals all of the following EXCEPT:

Accepted Answer

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

Question 8

If marginal cost is equal to average total cost:

Accepted Answer

A)  average total cost is increasing. 
B)  average total cost is at its maximum. 
C)  average total cost is at its minimum. 
D)  marginal cost is decreasing. 
A)  average total cost is increasing. 
B)  average total cost is at its maximum. 
C)  average total cost is at its minimum. 
D)  marginal cost is decreasing.

Question 9

Use the following to answer questions:
Figure: The Total Product  
-(Figure: The Total Product) Look at the figure The Total Product. Between points A and B the marginal product of labor is:

Accepted Answer

A)  increasing. 
B)  zero. 
C)  falling. 
D)  infinite. 
A)  increasing. 
B)  zero. 
C)  falling. 
D)  infinite.

Question 10

If Marie Marionettes is operating under conditions of diminishing marginal product, the marginal costs will be:

Accepted Answer

A)  equal to average total cost. 
B)  decreasing. 
C)  increasing. 
D)  constant. 
A)  equal to average total cost. 
B)  decreasing. 
C)  increasing. 
D)  constant.

Question 11

Use the following to answer questions:
Figure: Change in the Total Product  
-(Figure: Change in the Total Product) Look at the figure Change in the Total Product. As indicated by the change in a production function from TP1 to TP2, the marginal product of labor curve has:

Accepted Answer

A)  shifted upward. 
B)  shifted downward. 
C)  not moved. 
D)  become inverted. 
A)  shifted upward. 
B)  shifted downward. 
C)  not moved. 
D)  become inverted.

Question 12

Suppose the marginal cost curve in the short run first decreases and then increases. If marginal cost is increasing, _____ must be _____.

Accepted Answer

A)  marginal product; increasing 
B)  average variable cost; increasing 
C)  average total cost; increasing 
D)  marginal product; decreasing 
A)  marginal product; increasing 
B)  average variable cost; increasing 
C)  average total cost; increasing 
D)  marginal product; decreasing

Question 13

A business produces 10 pairs of eyeglasses. It incurs $30 in average variable cost and $5 in average fixed cost. The total cost of producing 10 pairs of eyeglasses is:

Accepted Answer

A)  $35. 
B)  $50. 
C)  $300. 
D)  $350. 
A)  $35. 
B)  $50. 
C)  $300. 
D)  $350.

Question 14

In the short run, the average total cost curve slopes upward because of:

Accepted Answer

A)  economies of scale. 
B)  diseconomies of scale. 
C)  increasing returns. 
D)  diminishing returns. 
A)  economies of scale. 
B)  diseconomies of scale. 
C)  increasing returns. 
D)  diminishing returns.

Question 15

When a firm adds physical capital, its variable cost will decrease in the long run.

Accepted Answer

A) True 
 B)False

Question 16

Use the following to answer questions:  
-(Table: Cost Data) Look at the table Cost Data. The average fixed cost of producing 2 purses is:

Accepted Answer

A)  $0. 
B)  $50. 
C)  $25. 
D)  $2. 
A)  $0. 
B)  $50. 
C)  $25. 
D)  $2.

Question 17

Use the following to answer questions:  
-(Table: Workers and Output) Look at the table Workers and Output. After graduation you achieve your dream of opening an art shop that specializes in selling mud statues. You pay $10 per day on a loan from your uncle, and regardless of how much you produce, you pay $10 per day to each of the workers who make the mud statues. The variable cost of producing 48 statues is:

Accepted Answer

A)  $50. 
B)  $48. 
C)  $20. 
D)  $10. 
A)  $50. 
B)  $48. 
C)  $20. 
D)  $10.

Question 18

Use the following to answer questions:  
-(Figure and Table: Variable, Fixed, and Total Costs) Look at the figure and table Variable, Fixed, and Total Costs. The marginal cost of increasing production from 19 to 36 bushels of wheat is:

Accepted Answer

A)  $23.53. 
B)  $11.76. 
C)  $22.22. 
D)  $11.11. 
A)  $23.53. 
B)  $11.76. 
C)  $22.22. 
D)  $11.11.

Question 19

Use the following to answer questions:  
-(Table: Output and Costs) Look at the table Output and Costs. When output increases from 1 to 2, marginal cost equals:

Accepted Answer

A)  $13. 
B)  $10. 
C)  $8. 
D)  $17. 
A)  $13. 
B)  $10. 
C)  $8. 
D)  $17.

Question 20

The rent for Oscar's sporting goods store is $2,500 per month. Oscar pays his staff $9 per hour, and his monthly electricity bill averages $700, depending on his total hours of operation. Oscar's fixed costs of production equal:

Accepted Answer

A)  $2,500 per month. 
B)  $3,200 per month. 
C)  $9 per hour multiplied by total hours of work plus $700. 
D)  $9 per hour multiplied by total hours of work plus $3,200. 
A)  $2,500 per month. 
B)  $3,200 per month. 
C)  $9 per hour multiplied by total hours of work plus $700. 
D)  $9 per hour multiplied by total hours of work plus $3,200.

The _____ is the increase in output that is produced when a firm hires an additional worker.

Use the following to answer questions: -(Table: Cost Data) Look at the table Cost Data. The marginal cost of producing the second purse is:

Total cost divided by the quantity of output produced is:

The _____ curve shows the quantities of output that can be obtained from different quantities of a variable input, assuming other inputs are fixed.

Diminishing returns are one explanation for diseconomies of scale.

The long run refers to the period for which:

Average variable cost equals all of the following EXCEPT:

If marginal cost is equal to average total cost:

Use the following to answer questions: Figure: The Total Product -(Figure: The Total Product) Look at the figure The Total Product. Between points A and B the marginal product of labor is:

If Marie Marionettes is operating under conditions of diminishing marginal product, the marginal costs will be:

Use the following to answer questions: Figure: Change in the Total Product -(Figure: Change in the Total Product) Look at the figure Change in the Total Product. As indicated by the change in a production function from TP₁ to TP₂, the marginal product of labor curve has:

Suppose the marginal cost curve in the short run first decreases and then increases. If marginal cost is increasing, _ must be _.

A business produces 10 pairs of eyeglasses. It incurs $30 in average variable cost and $5 in average fixed cost. The total cost of producing 10 pairs of eyeglasses is:

In the short run, the average total cost curve slopes upward because of:

When a firm adds physical capital, its variable cost will decrease in the long run.

Use the following to answer questions: -(Table: Cost Data) Look at the table Cost Data. The average fixed cost of producing 2 purses is:

Use the following to answer questions: -(Figure and Table: Variable, Fixed, and Total Costs) Look at the figure and table Variable, Fixed, and Total Costs. The marginal cost of increasing production from 19 to 36 bushels of wheat is:

Use the following to answer questions: -(Table: Output and Costs) Look at the table Output and Costs. When output increases from 1 to 2, marginal cost equals:

The rent for Oscar's sporting goods store is $2,500 per month. Oscar pays his staff $9 per hour, and his monthly electricity bill averages $700, depending on his total hours of operation. Oscar's fixed costs of production equal:

First Principles

Economic Models: Trade-Offs and Trade 25

Supply and Demand

Consumer and Producer Surplus

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals Firms

The Rational Consumer

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods Common Resources

The Economics of the Welfare

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Filters

Exam 11: Behind the Supply Curve: Inputs and Costs

The _____ is the increase in output that is produced when a firm hires an additional worker.

Use the following to answer questions: -(Table: Cost Data) Look at the table Cost Data. The marginal cost of producing the second purse is:

Total cost divided by the quantity of output produced is:

The _____ curve shows the quantities of output that can be obtained from different quantities of a variable input, assuming other inputs are fixed.

Diminishing returns are one explanation for diseconomies of scale.

The long run refers to the period for which:

Average variable cost equals all of the following EXCEPT:

If marginal cost is equal to average total cost:

Use the following to answer questions: Figure: The Total Product -(Figure: The Total Product) Look at the figure The Total Product. Between points A and B the marginal product of labor is:

If Marie Marionettes is operating under conditions of diminishing marginal product, the marginal costs will be:

Use the following to answer questions: Figure: Change in the Total Product -(Figure: Change in the Total Product) Look at the figure Change in the Total Product. As indicated by the change in a production function from TP1 to TP2, the marginal product of labor curve has:

Suppose the marginal cost curve in the short run first decreases and then increases. If marginal cost is increasing, _____ must be _____.

A business produces 10 pairs of eyeglasses. It incurs $30 in average variable cost and $5 in average fixed cost. The total cost of producing 10 pairs of eyeglasses is:

In the short run, the average total cost curve slopes upward because of:

When a firm adds physical capital, its variable cost will decrease in the long run.

Use the following to answer questions: -(Table: Cost Data) Look at the table Cost Data. The average fixed cost of producing 2 purses is:

Use the following to answer questions: -(Figure and Table: Variable, Fixed, and Total Costs) Look at the figure and table Variable, Fixed, and Total Costs. The marginal cost of increasing production from 19 to 36 bushels of wheat is:

Use the following to answer questions: -(Table: Output and Costs) Look at the table Output and Costs. When output increases from 1 to 2, marginal cost equals:

The rent for Oscar's sporting goods store is $2,500 per month. Oscar pays his staff $9 per hour, and his monthly electricity bill averages $700, depending on his total hours of operation. Oscar's fixed costs of production equal:

First Principles

Economic Models: Trade-Offs and Trade 25

Supply and Demand

Consumer and Producer Surplus

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals Firms

The Rational Consumer

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods Common Resources

The Economics of the Welfare

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Filters

Use the following to answer questions: Figure: Change in the Total Product -(Figure: Change in the Total Product) Look at the figure Change in the Total Product. As indicated by the change in a production function from TP₁ to TP₂, the marginal product of labor curve has:

Suppose the marginal cost curve in the short run first decreases and then increases. If marginal cost is increasing, _ must be _.