Question 1

The short run:

Accepted Answer

A)  Is 1 week. 
B)  Is when a firm has at least one fixed factor of production. 
C)  Is when all the factors of production are variable. 
D)  Is when losses are made. 
A)  Is 1 week. 
B)  Is when a firm has at least one fixed factor of production. 
C)  Is when all the factors of production are variable. 
D)  Is when losses are made. B

Question 2

Internal economies of scale occur when:

Accepted Answer

A)  Costs fall over time. 
B)  Revenue falls over time. 
C)  Unit costs fall as the firm's scale increases. 
D)  The price falls with more output. 
A)  Costs fall over time. 
B)  Revenue falls over time. 
C)  Unit costs fall as the firm's scale increases. 
D)  The price falls with more output. C

Question 3

Fixed costs:

Accepted Answer

A)  Never change. 
B)  Do not change with output. 
C)  Do not change over time. 
D)  Are equal to variable costs. 
A)  Never change. 
B)  Do not change with output. 
C)  Do not change over time. 
D)  Are equal to variable costs. B

Question 4

The Law of Diminishing Returns occurs:

Accepted Answer

A)  In the long run. 
B)  When the price is lowered to sell more. 
C)  When more units of a variable factor of production are added to a fixed factor. 
D)  When the total output falls as more units of a variable factor of production are added. 
A)  In the long run. 
B)  When the price is lowered to sell more. 
C)  When more units of a variable factor of production are added to a fixed factor. 
D)  When the total output falls as more units of a variable factor of production are added.

Question 5

Diseconomies of scale occur when:

Accepted Answer

A)  Marginal costs increase as output increases in the long run. 
B)  Total costs increase as output increases in the long run. 
C)  Fixed costs increase as output increases in the long run. 
D)  Unit costs increase as output increases in the long run. 
A)  Marginal costs increase as output increases in the long run. 
B)  Total costs increase as output increases in the long run. 
C)  Fixed costs increase as output increases in the long run. 
D)  Unit costs increase as output increases in the long run.

Question 6

The marginal product curve:

Accepted Answer

A)  Is inversely related to the average fixed cost curve. 
B)  Crosses the average product curve at its minimum point. 
C)  Crosses the average product curve at its maximum point. 
D)  Crosses the average costs curve at its minimum point. 
A)  Is inversely related to the average fixed cost curve. 
B)  Crosses the average product curve at its minimum point. 
C)  Crosses the average product curve at its maximum point. 
D)  Crosses the average costs curve at its minimum point.

Question 7

Short run marginal costs are determined mainly by the law of diminishing marginal utility.

Accepted Answer

A) True 
 B)False

Question 8

If the total product is 300 units when 10 employees are employed and 440 when 11 are employed:

Accepted Answer

A)  The marginal product is 30 units with 10 employees. 
B)  The average product is 140 units. 
C)  The average product increases from 30 units to 40 units. 
D)  The marginal product is 10 units. 
A)  The marginal product is 30 units with 10 employees. 
B)  The average product is 140 units. 
C)  The average product increases from 30 units to 40 units. 
D)  The marginal product is 10 units.

Question 9

Marginal costs:

Accepted Answer

A)  Equal fixed costs plus variable costs. 
B)  Equal average costs. 
C)  Equal total cost per unit. 
D)  Equal the extra cost of producing a unit. 
A)  Equal fixed costs plus variable costs. 
B)  Equal average costs. 
C)  Equal total cost per unit. 
D)  Equal the extra cost of producing a unit.

Question 10

The first level of output at which average costs are minimized is called:

Accepted Answer

A)  The Minimum Average Scale 
B)  The Maximum Unit Scale 
C)  The Mean Extra Scale 
D)  The Minimum Efficient Scale 
A)  The Minimum Average Scale 
B)  The Maximum Unit Scale 
C)  The Mean Extra Scale 
D)  The Minimum Efficient Scale

Question 11

The increase or decrease in total cost when another unit is produced is called the ________ cost.

Accepted Answer

The answer of The increase or decrease in total cost...

Question 12

When marginal product is positive but falling, total output (total product) is falling.

Accepted Answer

A) True 
 B)False

Question 13

The marginal cost curve:

Accepted Answer

A)  Is inversely related to the average cost curve. 
B)  Crosses the marginal product at its minimum. 
C)  Crosses the total cost curve at its maximum point. 
D)  Crosses the average costs curve at its minimum point. 
A)  Is inversely related to the average cost curve. 
B)  Crosses the marginal product at its minimum. 
C)  Crosses the total cost curve at its maximum point. 
D)  Crosses the average costs curve at its minimum point.

Exam 10: Costs: Short Run and Long Run

The short run:

Internal economies of scale occur when:

Fixed costs:

The Law of Diminishing Returns occurs:

Diseconomies of scale occur when:

The marginal product curve:

Short run marginal costs are determined mainly by the law of diminishing marginal utility.

If the total product is 300 units when 10 employees are employed and 440 when 11 are employed:

Marginal costs:

The first level of output at which average costs are minimized is called:

The increase or decrease in total cost when another unit is produced is called the ________ cost.

When marginal product is positive but falling, total output (total product) is falling.

The marginal cost curve:

What Is Economics

The Production Possibility Frontier PPF

Demand

Behavioural Economics

The Elasticity of Demand

Supply

Market Equilibrium

The Free Market System

Intervening in the Market System

Revenues, Costs, and Profits

Perfect Competition

Monopoly

Oligopoly

Monopolistic Competition and Non-Price Competition

The Labour Market

Introduction to Macroeconomics

Equilibrium in the Economy

National Income and the Standard of Living

Demand Side and Supply Side Policies

Influences on Aggregate Demand: Consumption

Influences on Aggregate Demand: Investment

Influences on Aggregate Demand: Government Revenues and Taxation

Influences on Aggregate Demand: International Trade, Globalization, and Exchange Rates

Government Objectives: Economic Growth and the Economic Cycle

Unemployment

Money

Government Objectives: Managing Inflation

Government Objectives: Achieving a Favourable Trade Position

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