Question 1

"The law of diminishing returns is the same as the decreasing returns to scale." Do you agree? Explain.

Accepted Answer

The statement is incorrect. The law of d

Question 2

-At point d in the above figure, the average product of labor equals

Accepted Answer

A)  15. 
B)  4. 
C)  3.75. 
D)  approximately 1. 
A)  15. 
B)  4. 
C)  3.75. 
D)  approximately 1.

Question 3

Decent Donuts  
-Based on the data in the table above, what is the average product of labor when Decent Donuts employs five workers?

Accepted Answer

A)  16.66 dozen donuts per day 
B)  17.2 dozen donuts per day 
C)  20 dozen donuts per day 
D)  22 dozen donuts per day 
A)  16.66 dozen donuts per day 
B)  17.2 dozen donuts per day 
C)  20 dozen donuts per day 
D)  22 dozen donuts per day

Question 4

At that amount of output where diminishing marginal returns first sets in

Accepted Answer

A)  total product will begin to decline. 
B)  average product will begin to decline. 
C)  marginal product will begin to decline. 
D)  all of the above 
A)  total product will begin to decline. 
B)  average product will begin to decline. 
C)  marginal product will begin to decline. 
D)  all of the above

Question 5

Total fixed cost

Accepted Answer

A)  increases as output increases. 
B)  does not change as output changes. 
C)  decreases as output increases. 
D)  initially decreases and then increases as output increases. 
A)  increases as output increases. 
B)  does not change as output changes. 
C)  decreases as output increases. 
D)  initially decreases and then increases as output increases.

Question 6

Which of the following curves is not U-shaped?

Accepted Answer

A)  average variable cost curve 
B)  average fixed cost curve 
C)  average total cost curve 
D)  marginal cost curve 
A)  average variable cost curve 
B)  average fixed cost curve 
C)  average total cost curve 
D)  marginal cost curve

Question 7

-In the above figure, a technologically inefficient point is

Accepted Answer

A)  a. 
B)  e. 
C)  g. 
D)  f. 
A)  a. 
B)  e. 
C)  g. 
D)  f.

Question 8

-The above table gives some cost data for Peter's Pickles. Peter's fixed cost is $20. His total cost of producing 6 barrels of pickles is

Accepted Answer

A)  $160. 
B)  $180. 
C)  $450. 
D)  There is not enough information to answer the question. 
A)  $160. 
B)  $180. 
C)  $450. 
D)  There is not enough information to answer the question.

Question 9

What are the two components of a firm's total cost in the short run, and what are their definitions?

Accepted Answer

The two parts are the total fixed cost (

Question 10

When the marginal product equals the average product, the

Accepted Answer

A)  average product curve is downward sloping. 
B)  average product curve is upward sloping. 
C)  marginal product is at its maximum. 
D)  average product is at its maximum. 
A)  average product curve is downward sloping. 
B)  average product curve is upward sloping. 
C)  marginal product is at its maximum. 
D)  average product is at its maximum.

Question 11

Which of the following factors is fixed in the long run?

Accepted Answer

A)  capital 
B)  land 
C)  entrepreneurship 
D)  none of the above because all factors are variable in the long run 
A)  capital 
B)  land 
C)  entrepreneurship 
D)  none of the above because all factors are variable in the long run

Question 12

-In the table above, the marginal product of the 5th worker is ________ units per week.

Accepted Answer

A)  2 
B)  5 
C)  10 
D)  19 
A)  2 
B)  5 
C)  10 
D)  19

Question 13

-The above (incomplete) table provides information about the relationships between output and various cost measures. The total cost (TC) of producing 9 units of output is

Accepted Answer

A)  $180. 
B)  $190. 
C)  $20. 
D)  None of the above answers is correct. 
A)  $180. 
B)  $190. 
C)  $20. 
D)  None of the above answers is correct.

Question 14

In 2008, Precision Pattern Interiors, which makes high-end aircraft interiors, began a $1 million renovation of a building at the Hutchinson Air Base Industrial Tract south of Yoder, Kansas. The company will also add some $400,000 in new equipment and triple its Yoder work force. Which of Precision Pattern Interiors' decisions is a short run decision?

Accepted Answer

A)  triple its Yoder work force 
B)  $1 million renovation of a building at the Hutchinson Air Base Industrial Tract 
C)  $400,000 in new equipment purchases 
D)  All of these decisions are short run decisions. 
A)  triple its Yoder work force 
B)  $1 million renovation of a building at the Hutchinson Air Base Industrial Tract 
C)  $400,000 in new equipment purchases 
D)  All of these decisions are short run decisions.

Question 15

-Based on the above figure, for which of the following amounts of output at Ike's Ice Cream Kitchen does the average product of labor exceed the marginal product of labor?

Accepted Answer

A)  at 10 gallons 
B)  at 40 gallons 
C)  at 70 gallons 
D)  all of the above 
A)  at 10 gallons 
B)  at 40 gallons 
C)  at 70 gallons 
D)  all of the above

Question 16

The marginal product and average product curves

Accepted Answer

A)  never intersect. 
B)  intersect at the maximum point of the marginal product curve. 
C)  intersect at the maximum point of the average product curve. 
D)  do not intersect at any predictable point. 
A)  never intersect. 
B)  intersect at the maximum point of the marginal product curve. 
C)  intersect at the maximum point of the average product curve. 
D)  do not intersect at any predictable point.

Question 17

-The table above shows some data that describe Tom's T-Shirts' total product when Tom has 1 sewing machine. An increase in the number of workers from 1 to 2 a day increases average product of labor from ________ T shirts per worker and marginal product of labor is ________ T shirts per worker.

Accepted Answer

A)  10 to 11; 22 
B)  10 to 22; 12 
C)  10 to 22; 22 
D)  10 to 11; 12 
A)  10 to 11; 22 
B)  10 to 22; 12 
C)  10 to 22; 22 
D)  10 to 11; 12

Question 18

-As illustrated in the above figure, after 40 gallons are produced each hour at Ike's Ice Cream Kitchen, the AVC curve starts to slope upward. The AVC starts to slope upward because the

Accepted Answer

A)  MC curve slopes upward. 
B)  MC exceeds the AVC. 
C)  ATC curve has not yet reached its minimum. 
D)  None of the above answers is correct. 
A)  MC curve slopes upward. 
B)  MC exceeds the AVC. 
C)  ATC curve has not yet reached its minimum. 
D)  None of the above answers is correct.

Question 19

-In the figure above, when 40 units are produced the average fixed cost is

Accepted Answer

A)  $4. 
B)  $8. 
C)  $12. 
D)  $20. 
A)  $4. 
B)  $8. 
C)  $12. 
D)  $20.

Question 20

Jefferson's Cleaners  
-Based on the data in the above table, at what level of output does the marginal cost start to rise at Jefferson's Cleaners?

Accepted Answer

A)  45 suits per day 
B)  47 suits per day 
C)  74 suits per day 
D)  85 suits per day 
A)  45 suits per day 
B)  47 suits per day 
C)  74 suits per day 
D)  85 suits per day

"The law of diminishing returns is the same as the decreasing returns to scale." Do you agree? Explain.

-At point d in the above figure, the average product of labor equals

Decent Donuts -Based on the data in the table above, what is the average product of labor when Decent Donuts employs five workers?

At that amount of output where diminishing marginal returns first sets in

Total fixed cost

Which of the following curves is not U-shaped?

-In the above figure, a technologically inefficient point is

-The above table gives some cost data for Peter's Pickles. Peter's fixed cost is $20. His total cost of producing 6 barrels of pickles is

What are the two components of a firm's total cost in the short run, and what are their definitions?

When the marginal product equals the average product, the

Which of the following factors is fixed in the long run?

-In the table above, the marginal product of the 5th worker is ________ units per week.

-The above (incomplete) table provides information about the relationships between output and various cost measures. The total cost (TC) of producing 9 units of output is

-Based on the above figure, for which of the following amounts of output at Ike's Ice Cream Kitchen does the average product of labor exceed the marginal product of labor?

The marginal product and average product curves

-The table above shows some data that describe Tom's T-Shirts' total product when Tom has 1 sewing machine. An increase in the number of workers from 1 to 2 a day increases average product of labor from T shirts per worker and marginal product of labor is T shirts per worker.

-As illustrated in the above figure, after 40 gallons are produced each hour at Ike's Ice Cream Kitchen, the AVC curve starts to slope upward. The AVC starts to slope upward because the

-In the figure above, when 40 units are produced the average fixed cost is

Jefferson's Cleaners -Based on the data in the above table, at what level of output does the marginal cost start to rise at Jefferson's Cleaners?

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

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Exam 11: Output and Costs

"The law of diminishing returns is the same as the decreasing returns to scale." Do you agree? Explain.

-At point d in the above figure, the average product of labor equals

Decent Donuts -Based on the data in the table above, what is the average product of labor when Decent Donuts employs five workers?

At that amount of output where diminishing marginal returns first sets in

Total fixed cost

Which of the following curves is not U-shaped?

-In the above figure, a technologically inefficient point is

-The above table gives some cost data for Peter's Pickles. Peter's fixed cost is $20. His total cost of producing 6 barrels of pickles is

What are the two components of a firm's total cost in the short run, and what are their definitions?

When the marginal product equals the average product, the

Which of the following factors is fixed in the long run?

-In the table above, the marginal product of the 5th worker is ________ units per week.

-The above (incomplete) table provides information about the relationships between output and various cost measures. The total cost (TC) of producing 9 units of output is

-Based on the above figure, for which of the following amounts of output at Ike's Ice Cream Kitchen does the average product of labor exceed the marginal product of labor?

The marginal product and average product curves

-The table above shows some data that describe Tom's T-Shirts' total product when Tom has 1 sewing machine. An increase in the number of workers from 1 to 2 a day increases average product of labor from ________ T shirts per worker and marginal product of labor is ________ T shirts per worker.

-As illustrated in the above figure, after 40 gallons are produced each hour at Ike's Ice Cream Kitchen, the AVC curve starts to slope upward. The AVC starts to slope upward because the

-In the figure above, when 40 units are produced the average fixed cost is

Jefferson's Cleaners -Based on the data in the above table, at what level of output does the marginal cost start to rise at Jefferson's Cleaners?

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

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

-The table above shows some data that describe Tom's T-Shirts' total product when Tom has 1 sewing machine. An increase in the number of workers from 1 to 2 a day increases average product of labor from T shirts per worker and marginal product of labor is T shirts per worker.