Exam 5: Production and Cost Analysis in the Short Run

For a particular production function,over the range of output where marginal product rises as units of the variable input are added to the fixed input,marginal cost will be:

(Multiple Choice)

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Question 21

-Refer to Scenario 3.The average variable cost of producing three units of output is:

(Multiple Choice)

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Question 22

The payment of wages by a firm is an example of:

(Multiple Choice)

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Question 23

Which of the following statements is false?

(Multiple Choice)

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Question 24

The term "fixed input" refers to:

(Multiple Choice)

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Question 25

Fred is considering opening a ski shop in Colorado.Assume Fred will incur the following costs: building rent = $100,000/year,inventory = $250,000/year,energy = $50,000/year,and labor (one clerk)= $10,000/year.In addition,Fred's current income as a computer programmer is $40,000 per year.Assuming Fred would earn $460,000 in revenues,he could expect to earn:

(Multiple Choice)

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Question 26

-Refer to Scenario 2.The average fixed cost of 2 units of output is:

(Multiple Choice)

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Question 27

According to a study by Blinder et al.,on average,fixed costs account for about 44 percent of firms' total costs of production,suggesting that fixed costs are more important to many firms' decision-making processes than standard theory would suggest.

(True/False)

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Question 28

The law of diminishing returns is a result of the fact that more and more units of a variable input are being added to a fixed input.Because of the limitations imposed by the fixed input,at some point the productivity of additional units of the variable input must decline.

(True/False)

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Question 29

When demand for a firm's product decreases,the firm can take a number of steps to adjust costs and quantities supplied to the market.Some are listed below.Which actions are short run and which are long run? Explain your reasoning. a.Layoff 25 percent of the firm's existing employees. b.Declare bankruptcy and sell all of the firm's plant and equipment. c.Require management personnel to take a significant cut in pay. d.Furlough employees for 3 days each month. e.Move to a smaller production facility.

(Essay)

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Question 30

All else constant,an improvement in technology would cause a firm's total,average and marginal product functions to increase (graphically,shift up).

(True/False)

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Question 31

From the manager's perspective:

(Multiple Choice)

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Question 32

Explain the difference between the short run and the long run as it relates to the firm's production function.Why is this distinction important to a firm's manager?

(Essay)

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Question 33

For a typical short-run production function,so long as marginal product is increasing,average product will be increasing as well.

(True/False)

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Question 34

Which of the following statements is correct?

(Multiple Choice)

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Question 35

Economic profit is equal to the difference between:

(Multiple Choice)

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Question 36

-Refer to Scenario 3.The average total cost of 5 units of output is:

(Multiple Choice)

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Question 37

So long as a firm is enjoying increasing marginal returns,a one unit increase in output will cause marginal costs to and total costs to .

(Multiple Choice)

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Question 38

Which of the following would be classified as a short-run decision?

(Multiple Choice)

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Question 39

The average product of a variable input is calculated as:

(Multiple Choice)

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Question 40

Showing 21 - 40 of 101

For a particular production function,over the range of output where marginal product rises as units of the variable input are added to the fixed input,marginal cost will be:

-Refer to Scenario 3.The average variable cost of producing three units of output is:

The payment of wages by a firm is an example of:

Which of the following statements is false?

The term "fixed input" refers to:

-Refer to Scenario 2.The average fixed cost of 2 units of output is:

According to a study by Blinder et al.,on average,fixed costs account for about 44 percent of firms' total costs of production,suggesting that fixed costs are more important to many firms' decision-making processes than standard theory would suggest.

The law of diminishing returns is a result of the fact that more and more units of a variable input are being added to a fixed input.Because of the limitations imposed by the fixed input,at some point the productivity of additional units of the variable input must decline.

All else constant,an improvement in technology would cause a firm's total,average and marginal product functions to increase (graphically,shift up).

From the manager's perspective:

Explain the difference between the short run and the long run as it relates to the firm's production function.Why is this distinction important to a firm's manager?

For a typical short-run production function,so long as marginal product is increasing,average product will be increasing as well.

Which of the following statements is correct?

Economic profit is equal to the difference between:

-Refer to Scenario 3.The average total cost of 5 units of output is:

So long as a firm is enjoying increasing marginal returns,a one unit increase in output will cause marginal costs to and total costs to .

Which of the following would be classified as a short-run decision?

The average product of a variable input is calculated as:

Managers and Economics

Demand, supply, and Equilibrium Prices

Demand Elasticities

Techniques for Understanding Consumer Demand and Behavior

Production and Cost Analysis in the Long Run

Market Structure: Perfect Competition

Market Structure: Monopoly and Monopolistic Competition

Market Structure: Oligopoly

Pricing Strategies for the Firm

Measuring Macroeconomic Activity

Spending by Individuals, firms, and Governments on Real Goods and Services

The Role of Money in the Macro Economy

The Aggregate Model of the Macro Economy

International and Balance of Payments Issues in the Macro Economy

Combining Micro and Macro Analysis for Managerial Decision Making

Filters

Exam 5: Production and Cost Analysis in the Short Run

For a particular production function,over the range of output where marginal product rises as units of the variable input are added to the fixed input,marginal cost will be:

-Refer to Scenario 3.The average variable cost of producing three units of output is:

The payment of wages by a firm is an example of:

Which of the following statements is false?

The term "fixed input" refers to:

-Refer to Scenario 2.The average fixed cost of 2 units of output is:

According to a study by Blinder et al.,on average,fixed costs account for about 44 percent of firms' total costs of production,suggesting that fixed costs are more important to many firms' decision-making processes than standard theory would suggest.

The law of diminishing returns is a result of the fact that more and more units of a variable input are being added to a fixed input.Because of the limitations imposed by the fixed input,at some point the productivity of additional units of the variable input must decline.

All else constant,an improvement in technology would cause a firm's total,average and marginal product functions to increase (graphically,shift up).

From the manager's perspective:

Explain the difference between the short run and the long run as it relates to the firm's production function.Why is this distinction important to a firm's manager?

For a typical short-run production function,so long as marginal product is increasing,average product will be increasing as well.

Which of the following statements is correct?

Economic profit is equal to the difference between:

-Refer to Scenario 3.The average total cost of 5 units of output is:

So long as a firm is enjoying increasing marginal returns,a one unit increase in output will cause marginal costs to ________ and total costs to ________.

Which of the following would be classified as a short-run decision?

The average product of a variable input is calculated as:

Managers and Economics

Demand, supply, and Equilibrium Prices

Demand Elasticities

Techniques for Understanding Consumer Demand and Behavior

Production and Cost Analysis in the Long Run

Market Structure: Perfect Competition

Market Structure: Monopoly and Monopolistic Competition

Market Structure: Oligopoly

Pricing Strategies for the Firm

Measuring Macroeconomic Activity

Spending by Individuals, firms, and Governments on Real Goods and Services

The Role of Money in the Macro Economy

The Aggregate Model of the Macro Economy

International and Balance of Payments Issues in the Macro Economy

Combining Micro and Macro Analysis for Managerial Decision Making

Filters

So long as a firm is enjoying increasing marginal returns,a one unit increase in output will cause marginal costs to and total costs to .