Question 1

The marginal cost (MC)curve intersects the

Accepted Answer

A) ATC, AVC, and AFC curves at their minimum points. 
B) ATC and AFC curves at their minimum points. 
C) AVC and AFC curves at their minimum points. 
D) ATC and AVC curves at their minimum points. 
E) TC and TVC curves at their minimum points. 
A) ATC, AVC, and AFC curves at their minimum points. 
B) ATC and AFC curves at their minimum points. 
C) AVC and AFC curves at their minimum points. 
D) ATC and AVC curves at their minimum points. 
E) TC and TVC curves at their minimum points.

Question 2

Suppose Honda can triple its production of Civics by tripling its production facility for those cars.This indicates the presence of

Accepted Answer

A) constant returns to scale. 
B) economies of scale. 
C) diseconomies of scale. 
D) the law of diminishing returns. 
E) minimum efficient scale. 
A) constant returns to scale. 
B) economies of scale. 
C) diseconomies of scale. 
D) the law of diminishing returns. 
E) minimum efficient scale.

Question 3

Which of the following quotes best illustrates the idea of marginal product?

Accepted Answer

A) "If I have 10 workers on my assembly line, I can produce 13 tables a day." 
B) "If I add an 11th worker, I can produce 1 extra table a day." 
C) "Each worker produces 2 tables a day." 
D) "I find if I add an extra shift at night, table production only rises by 80 percent because I need more maintenance time on the assembly line." 
E) "If I double workers and double the assembly line, I can make 120 percent more tables." 
A) "If I have 10 workers on my assembly line, I can produce 13 tables a day." 
B) "If I add an 11th worker, I can produce 1 extra table a day." 
C) "Each worker produces 2 tables a day." 
D) "I find if I add an extra shift at night, table production only rises by 80 percent because I need more maintenance time on the assembly line." 
E) "If I double workers and double the assembly line, I can make 120 percent more tables."

Question 4

Marginal cost ________ as the quantity produced increases.

Accepted Answer

A) initially decreases and then decreases 
B) always decreases 
C) always increases 
D) initially increases and then decreases 
E) becomes negative 
A) initially decreases and then decreases 
B) always decreases 
C) always increases 
D) initially increases and then decreases 
E) becomes negative

Question 5

Economies of scale refer to the range of output over which

Accepted Answer

A) long-run average cost rises as output increases. 
B) marginal cost exceeds average cost. 
C) long-run average cost falls as output increases. 
D) the marginal product of labour decreases. 
E) marginal product equals average product. 
A) long-run average cost rises as output increases. 
B) marginal cost exceeds average cost. 
C) long-run average cost falls as output increases. 
D) the marginal product of labour decreases. 
E) marginal product equals average product.

Question 6

Choose the correct equation.

Accepted Answer

A) TFC = TC/Q 
B) TFC = TC - AVC 
C) TFC = TC - TVC 
D) TFC = TVC/Q 
E) TFC = TVC - TC 
A) TFC = TC/Q 
B) TFC = TC - AVC 
C) TFC = TC - TVC 
D) TFC = TVC/Q 
E) TFC = TVC - TC

Question 7

Diseconomies of scale refer to the range of output over which

Accepted Answer

A) long-run average cost rises as output increases. 
B) average cost exceeds marginal cost. 
C) long-run average cost falls as output increases. 
D) the marginal product of labour increases. 
E) marginal product equals average product. 
A) long-run average cost rises as output increases. 
B) average cost exceeds marginal cost. 
C) long-run average cost falls as output increases. 
D) the marginal product of labour increases. 
E) marginal product equals average product.

Question 8

Use the table below to answer the following questions.
Table 11.3.1
  
-Refer to Table 11.3.1, which gives Tania's total cost schedule.The average fixed cost of producing 9 teapots per day is

Accepted Answer

A) $2.22. 
B) $1.25. 
C) $10.00. 
D) $1.11. 
E) $1.54. 
A) $2.22. 
B) $1.25. 
C) $10.00. 
D) $1.11. 
E) $1.54.

Question 9

The long-run average cost curve is the relationship between the lowest attainable average total cost and output, when plant size is ________ and labour is ________.The long-run average cost curve is made up of the segments of individual average ________ cost curves with the lowest average ________ cost for a given output.

Accepted Answer

A) varied; varied; variable; variable 
B) varied; varied; total; total 
C) varied; held constant; variable; variable 
D) held constant; varied; total; total 
E) held constant; varied; variable; variable 
A) varied; varied; variable; variable 
B) varied; varied; total; total 
C) varied; held constant; variable; variable 
D) held constant; varied; total; total 
E) held constant; varied; variable; variable

Question 10

Which one of the following statements is false?

Accepted Answer

A) Average total cost is total cost per unit of output. 
B) Average fixed cost plus average variable cost equals average total cost. 
C) Marginal cost is the increase in total cost resulting from a one-unit increase in output. 
D) Total cost equals fixed cost plus average cost. 
E) Marginal cost depends on the amount of labour hired. 
A) Average total cost is total cost per unit of output. 
B) Average fixed cost plus average variable cost equals average total cost. 
C) Marginal cost is the increase in total cost resulting from a one-unit increase in output. 
D) Total cost equals fixed cost plus average cost. 
E) Marginal cost depends on the amount of labour hired.

Question 11

If the average variable cost of producing 10 units is $18 and the average variable cost of producing 11 units is $20, we know that, between 10 and 11 units of output,

Accepted Answer

A) marginal cost is increasing. 
B) average total cost is increasing. 
C) average fixed cost is increasing. 
D) total cost is either increasing or decreasing. 
E) none of the above 
A) marginal cost is increasing. 
B) average total cost is increasing. 
C) average fixed cost is increasing. 
D) total cost is either increasing or decreasing. 
E) none of the above

Question 12

Use the table below to answer the following questions.
Table 11.2.3
  
-Refer to Table 11.2.3.The value of A is

Accepted Answer

A) 1.75. 
B) 2. 
C) 3. 
D) 7. 
E) 4. 
A) 1.75. 
B) 2. 
C) 3. 
D) 7. 
E) 4.

Question 13

The average fixed cost curve slopes downward due to

Accepted Answer

A) diminishing marginal utility. 
B) diminishing marginal returns. 
C) technological inefficiency. 
D) economic inefficiency. 
E) spreading total fixed cost over increasing output. 
A) diminishing marginal utility. 
B) diminishing marginal returns. 
C) technological inefficiency. 
D) economic inefficiency. 
E) spreading total fixed cost over increasing output.

Question 14

The short run refers to a time period

Accepted Answer

A) of one year or less. 
B) in which all factors of production are variable. 
C) in which all factors of production are fixed. 
D) in which some factors of production are variable, but at least one factor of production is fixed. 
E) in which all factors of production are variable, but the technology is fixed. 
A) of one year or less. 
B) in which all factors of production are variable. 
C) in which all factors of production are fixed. 
D) in which some factors of production are variable, but at least one factor of production is fixed. 
E) in which all factors of production are variable, but the technology is fixed.

Question 15

The total product curve is a graph that shows the

Accepted Answer

A) minimum cost of producing a given amount of output using a given technology. 
B) maximum profit from each unit of output sold. 
C) maximum output that a given quantity of labour can produce. 
D) maximum output that can be produced as technology advances. 
E) change in total product for a given change in marginal product. 
A) minimum cost of producing a given amount of output using a given technology. 
B) maximum profit from each unit of output sold. 
C) maximum output that a given quantity of labour can produce. 
D) maximum output that can be produced as technology advances. 
E) change in total product for a given change in marginal product.

Question 16

The AFC curve shifts upward if

Accepted Answer

A) factor prices rise. 
B) a new technology is introduced. 
C) more workers are hired. 
D) all of the above 
E) none of the above 
A) factor prices rise. 
B) a new technology is introduced. 
C) more workers are hired. 
D) all of the above 
E) none of the above

Question 17

Use the information below to answer the following questions.
Fact 11.1.1
January 31, 2008: Starbucks will open 75 more stores abroad than originally predicted, for a total of 975.
February 25, 2008: For three hours on Tuesday, Starbucks will shut down every single one of its 7,100 stores so that baristas can receive a refresher course.
June 2, 2008: Starbucks replaces baristas with vending machines.
July 18, 2008: Starbucks is closing 616 stores by the end of March.
-Refer to Fact 11.1.1.The decisions made on ________ are short-run decisions because they ________.

Accepted Answer

A) January 31 and July 18; change the number of stores but not necessarily the number of employees 
B) February 25 and June 2; change a variable factor of production but not a fixed factor of production 
C) February 25, June 2, and July 18; deal with stores located in the United States 
D) June 2 and July 18; are the more recent decisions 
E) none of the above 
A) January 31 and July 18; change the number of stores but not necessarily the number of employees 
B) February 25 and June 2; change a variable factor of production but not a fixed factor of production 
C) February 25, June 2, and July 18; deal with stores located in the United States 
D) June 2 and July 18; are the more recent decisions 
E) none of the above

Question 18

Use the table below to answer the following questions.
Table 11.4.1
Swanky's output levels
  
-Refer to Table 11.4.1, which represents Swanky's production possibilities as the firm varies the quantities of knitting machines and workers per day.If Swanky increases the number of knitting machines from 2 to 3 and increases the number of workers employed from 2 to 3, the factory experiences

Accepted Answer

A) economies of scale. 
B) constant returns to scale. 
C) diseconomies of scale. 
D) constant marginal product. 
E) minimum efficient scale. 
A) economies of scale. 
B) constant returns to scale. 
C) diseconomies of scale. 
D) constant marginal product. 
E) minimum efficient scale.

Question 19

Use the information below to answer the following questions.
Fact 11.3.1 A Pepsi, A Business Decision
PepsiCo has done a deal with 300 small Mexican farmers close to their two factories to buy corn at a guaranteed price. PepsiCo saves transportation costs and the use of local farms assures it access to the type of corn best suited to its products and processes. "That gives us great leverage because corn prices don't fluctuate so much, but transportation costs do," said Pedro Padierna, president of PepsiCo in Mexico.
Source: The New York Times, February 21, 2011
-Refer to Fact 11.3.1.Fluctuations in the price of corn and in transportation costs shift all of the following except the

Accepted Answer

A) average variable cost, marginal cost, and average total cost curves. 
B) average fixed cost and total fixed cost curves. 
C) total cost curve. 
D) total variable cost curve. 
E) average fixed cost, marginal cost, and total fixed cost curves. 
A) average variable cost, marginal cost, and average total cost curves. 
B) average fixed cost and total fixed cost curves. 
C) total cost curve. 
D) total variable cost curve. 
E) average fixed cost, marginal cost, and total fixed cost curves.

Question 20

Use the figure below to answer the following questions.
   
Figure 11.2.1
-Refer to Figure 11.2.1 which illustrates Tania's total product curve.Which one of the following statements is false?

Accepted Answer

A) All the points above the curve are unattainable. 
B) All the points below the curve are attainable. 
C) All the points below the curve are inefficient. 
D) The cost of producing at point B equals the cost of producing at point C. 
E) All the points on the curve are attainable. 
A) All the points above the curve are unattainable. 
B) All the points below the curve are attainable. 
C) All the points below the curve are inefficient. 
D) The cost of producing at point B equals the cost of producing at point C. 
E) All the points on the curve are attainable.

The marginal cost (MC)curve intersects the

Suppose Honda can triple its production of Civics by tripling its production facility for those cars.This indicates the presence of

Which of the following quotes best illustrates the idea of marginal product?

Marginal cost ________ as the quantity produced increases.

Economies of scale refer to the range of output over which

Choose the correct equation.

Diseconomies of scale refer to the range of output over which

Use the table below to answer the following questions. Table 11.3.1 -Refer to Table 11.3.1, which gives Tania's total cost schedule.The average fixed cost of producing 9 teapots per day is

The long-run average cost curve is the relationship between the lowest attainable average total cost and output, when plant size is and labour is .The long-run average cost curve is made up of the segments of individual average cost curves with the lowest average cost for a given output.

Which one of the following statements is false?

If the average variable cost of producing 10 units is $18 and the average variable cost of producing 11 units is $20, we know that, between 10 and 11 units of output,

Use the table below to answer the following questions. Table 11.2.3 -Refer to Table 11.2.3.The value of A is

The average fixed cost curve slopes downward due to

The short run refers to a time period

The total product curve is a graph that shows the

The AFC curve shifts upward if

Use the figure below to answer the following questions. Figure 11.2.1 -Refer to Figure 11.2.1 which illustrates Tania's total product curve.Which one of the following statements is false?

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Filters

Exam 11: Output and Costs

The marginal cost (MC)curve intersects the

Suppose Honda can triple its production of Civics by tripling its production facility for those cars.This indicates the presence of

Which of the following quotes best illustrates the idea of marginal product?

Marginal cost ________ as the quantity produced increases.

Economies of scale refer to the range of output over which

Choose the correct equation.

Diseconomies of scale refer to the range of output over which

Use the table below to answer the following questions. Table 11.3.1 -Refer to Table 11.3.1, which gives Tania's total cost schedule.The average fixed cost of producing 9 teapots per day is

Which one of the following statements is false?

If the average variable cost of producing 10 units is $18 and the average variable cost of producing 11 units is $20, we know that, between 10 and 11 units of output,

Use the table below to answer the following questions. Table 11.2.3 -Refer to Table 11.2.3.The value of A is

The average fixed cost curve slopes downward due to

The short run refers to a time period

The total product curve is a graph that shows the

The AFC curve shifts upward if

Use the figure below to answer the following questions. Figure 11.2.1 -Refer to Figure 11.2.1 which illustrates Tania's total product curve.Which one of the following statements is false?

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Filters