Question 1

The short run as the term is used in connection with the theory of the firm is a period of time:

Accepted Answer

A) Too short for the firm to vary all its inputs 
B) No more than a week 
C) Long enough for the firm to vary the quantity of all its inputs 
D) In which the fixed costs are zero 
A) Too short for the firm to vary all its inputs 
B) No more than a week 
C) Long enough for the firm to vary the quantity of all its inputs 
D) In which the fixed costs are zero A

Question 2

Costs incurred only when production occurs are known as:

Accepted Answer

A) Explicit costs. 
B) Fixed costs. 
C) Variable costs. 
D) Technological expenses. 
A) Explicit costs. 
B) Fixed costs. 
C) Variable costs. 
D) Technological expenses. C

Question 3

If labour is the only variable resource and its marginal physical product falls as more workers are hired:

Accepted Answer

A) The law of diminishing marginal returns is at work. 
B) Marginal cost is rising. 
C) Average cost may still be declining. 
D) Average physical product may still be rising. 
A) The law of diminishing marginal returns is at work. 
B) Marginal cost is rising. 
C) Average cost may still be declining. 
D) Average physical product may still be rising. A

Question 4

When both average and total product are greater than zero, and marginal product equals average product, then total product:

Accepted Answer

A) Is at a maximum. 
B) Is positive and rising. 
C) Is falling. 
D) Is negative but rising. 
A) Is at a maximum. 
B) Is positive and rising. 
C) Is falling. 
D) Is negative but rising.

Question 5

Diminishing marginal returns are most compatible with:

Accepted Answer

A) Economies of scale. 
B) Advantages from specialization. 
C) Positively-sloped marginal cost curves 
D) Depreciation of the capital stock. 
A) Economies of scale. 
B) Advantages from specialization. 
C) Positively-sloped marginal cost curves 
D) Depreciation of the capital stock.

Question 6

Which of the following is irrelevant for rational decision making?

Accepted Answer

A) Total variable cost (TV
C)  
B) Explicit cost. 
C) Average fixed cost (AF
C) . 
D) Marginal cost (M
C) . 
A) Total variable cost (TV
C)  
B) Explicit cost. 
C) Average fixed cost (AF
C) . 
D) Marginal cost (M
C) .

Question 7

The total product curve may initially show output increasing at an increasing rate as more labour is hired because of the:

Accepted Answer

A) Declining quality of the labor force. 
B) Principle of comparative advantage. 
C) Law of diminishing marginal returns. 
D) Increase in marginal physical product. 
A) Declining quality of the labor force. 
B) Principle of comparative advantage. 
C) Law of diminishing marginal returns. 
D) Increase in marginal physical product.

Question 8

Which of the following statements describes the presence of diminishing returns. Holding at least one factor constant …....

Accepted Answer

A) The marginal product of a factor is positive and rising. 
B) The marginal product of a factor is positive but falling. 
C) The marginal product of a factor is falling and negative. 
D) The marginal product of a factor is constant. 
A) The marginal product of a factor is positive and rising. 
B) The marginal product of a factor is positive but falling. 
C) The marginal product of a factor is falling and negative. 
D) The marginal product of a factor is constant.

Question 9

Economies of scale exist if:

Accepted Answer

A) As the amount of capital increases, the cost of producing per unit rises 
B) As the amount of capital increases, the cost of producing per unit falls 
C) As the amount of capital increases, the marginal cost rises 
D) As the amount of capital increases, the marginal physical product falls 
A) As the amount of capital increases, the cost of producing per unit rises 
B) As the amount of capital increases, the cost of producing per unit falls 
C) As the amount of capital increases, the marginal cost rises 
D) As the amount of capital increases, the marginal physical product falls

Question 10

Which of the following statements describes increasing returns to scale:

Accepted Answer

A) Doubling the inputs used leads to double the output. 
B) Increasing the inputs by 50% leads to a 25% increase in output. 
C) Increasing inputs by 1/4 leads to an increase in output of 1/3. 
D) None of the above. 
A) Doubling the inputs used leads to double the output. 
B) Increasing the inputs by 50% leads to a 25% increase in output. 
C) Increasing inputs by 1/4 leads to an increase in output of 1/3. 
D) None of the above.

Question 11

In economic theory the costs of a firm

Accepted Answer

A) Tend to be less than the everyday use of the term costs would suggest 
B) Includes implicit as well as explicit outlays 
C) Always decline as more output is produced 
D) Are usually defined in such a way that profits will be larger than the 
A) Tend to be less than the everyday use of the term costs would suggest 
B) Includes implicit as well as explicit outlays 
C) Always decline as more output is produced 
D) Are usually defined in such a way that profits will be larger than the

The short run as the term is used in connection with the theory of the firm is a period of time:

Costs incurred only when production occurs are known as:

If labour is the only variable resource and its marginal physical product falls as more workers are hired:

When both average and total product are greater than zero, and marginal product equals average product, then total product:

Diminishing marginal returns are most compatible with:

Which of the following is irrelevant for rational decision making?

The total product curve may initially show output increasing at an increasing rate as more labour is hired because of the:

Which of the following statements describes the presence of diminishing returns. Holding at least one factor constant …....

Economies of scale exist if:

Which of the following statements describes increasing returns to scale:

In economic theory the costs of a firm

Consumer Theory and Utility

Indifference Curve Analysis and Consumer Theory

Cost Theory and Production Possibility Curve Analysis

Classical Economic Theory

Macroeconomic Theory and Models

Macroeconomic Equilibrium and Concepts

Keynesian Economics and Related Concepts

National Income and Keynesian Economics

Economics and Economic Theory

Economic Concepts and Theories

Macroeconomics and Economic Theories

Economics and Economic Methods

Economics and Social Science

Demand Analysis and Utility Theory

Indifference Curves, Ordering, Wealth of Nations, and More

Economics Questions on Demand and Supply

Elasticity of Supply and Demand

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Exam 14: Production and Costs

The short run as the term is used in connection with the theory of the firm is a period of time:

Costs incurred only when production occurs are known as:

If labour is the only variable resource and its marginal physical product falls as more workers are hired:

When both average and total product are greater than zero, and marginal product equals average product, then total product:

Diminishing marginal returns are most compatible with:

Which of the following is irrelevant for rational decision making?

The total product curve may initially show output increasing at an increasing rate as more labour is hired because of the:

Which of the following statements describes the presence of diminishing returns. Holding at least one factor constant …....

Economies of scale exist if:

Which of the following statements describes increasing returns to scale:

In economic theory the costs of a firm

Consumer Theory and Utility

Indifference Curve Analysis and Consumer Theory

Cost Theory and Production Possibility Curve Analysis

Classical Economic Theory

Macroeconomic Theory and Models

Macroeconomic Equilibrium and Concepts

Keynesian Economics and Related Concepts

National Income and Keynesian Economics

Economics and Economic Theory

Economic Concepts and Theories

Macroeconomics and Economic Theories

Economics and Economic Methods

Economics and Social Science

Demand Analysis and Utility Theory

Indifference Curves, Ordering, Wealth of Nations, and More

Economics Questions on Demand and Supply

Elasticity of Supply and Demand

Filters