Question 1

-The table above shows the short-run product schedule for Virginia's Tee-Shirts. The worker for whom the law of diminishing returns initially occurs is the ________ worker.

Accepted Answer

A)  5th 
B)  4th 
C)  3rd 
D)  2nd 
A)  5th 
B)  4th 
C)  3rd 
D)  2nd

Question 2

-The above figure shows the costs at Barney's Bagel Bakery. For which of the following levels of output does the marginal product of labor exceed the average product of labor?

Accepted Answer

A)  at 1000 bagels daily 
B)  at 2000 bagels daily 
C)  at 3000 bagels daily 
D)  all of the above 
A)  at 1000 bagels daily 
B)  at 2000 bagels daily 
C)  at 3000 bagels daily 
D)  all of the above

Question 3

An example of a variable factor of production in the short run is

Accepted Answer

A)  a building. 
B)  capital equipment. 
C)  an employee. 
D)  land. 
A)  a building. 
B)  capital equipment. 
C)  an employee. 
D)  land.

Question 4

Most total product curves have

Accepted Answer

A)  first increasing and then decreasing marginal returns to labor. 
B)  output first increasing and then decreasing as labor is added. 
C)  first decreasing and then increasing marginal returns to labor. 
D)  output increasing at an increasing rate as labor is added. 
A)  first increasing and then decreasing marginal returns to labor. 
B)  output first increasing and then decreasing as labor is added. 
C)  first decreasing and then increasing marginal returns to labor. 
D)  output increasing at an increasing rate as labor is added.

Question 5

Which of the following statements is TRUE?

Accepted Answer

A)  In the long run, the average cost curve is always downward sloping. 
B)  In the long run, the quantities of all inputs are fixed. 
C)  In the long run, the firms' fixed costs are greater than its variable costs. 
D)  In the long run, all costs are variable costs. 
A)  In the long run, the average cost curve is always downward sloping. 
B)  In the long run, the quantities of all inputs are fixed. 
C)  In the long run, the firms' fixed costs are greater than its variable costs. 
D)  In the long run, all costs are variable costs.

Question 6

-The table above gives production information for Bob's Baseball Cap Company. Bob's total cost when zero caps are produced is $200 and workers cost $10 per hour. The total fixed cost of producing 10 baseball hats per hour is

Accepted Answer

A)  $400. 
B)  $200. 
C)  $22. 
D)  More information is needed to answer the question. 
A)  $400. 
B)  $200. 
C)  $22. 
D)  More information is needed to answer the question.

Question 7

"Diseconomies of scale" occur in

Accepted Answer

A)  the long run, but not the short run. 
B)  the short run, but not the long run. 
C)  both the short run and the long run. 
D)  neither the short run nor the long run. 
A)  the long run, but not the short run. 
B)  the short run, but not the long run. 
C)  both the short run and the long run. 
D)  neither the short run nor the long run.

Question 8

In the short run

Accepted Answer

A)  all factors of production are fixed. 
B)  at least one factor of production is fixed. 
C)  all factors of production are variable. 
D)  there are no variable costs. 
A)  all factors of production are fixed. 
B)  at least one factor of production is fixed. 
C)  all factors of production are variable. 
D)  there are no variable costs.

Question 9

Marginal cost is calculated as

Accepted Answer

A)  total cost divided by output. 
B)  the increase in total cost divided by the increase in output. 
C)  the increase in total cost divided by the increase in labor, given the amount of capital. 
D)  total cost minus total fixed cost. 
A)  total cost divided by output. 
B)  the increase in total cost divided by the increase in output. 
C)  the increase in total cost divided by the increase in labor, given the amount of capital. 
D)  total cost minus total fixed cost.

Question 10

The average total cost curve

Accepted Answer

A)  is U-shaped. 
B)  diminishes initially because average fixed costs diminish. 
C)  increases eventually because of diminishing returns. 
D)  All of the above answers are correct. 
A)  is U-shaped. 
B)  diminishes initially because average fixed costs diminish. 
C)  increases eventually because of diminishing returns. 
D)  All of the above answers are correct.

Question 11

-Cindy's Sweaters' production function is shown in the above table. Cindy rents two knitting machines for $30 a day each and hires workers at a wage rate of $40 a day. If Cindy produces 18 sweaters per day, what is her total cost?

Accepted Answer

A)  $120 
B)  $140 
C)  $180 
D)  $60 
A)  $120 
B)  $140 
C)  $180 
D)  $60

Question 12

Average total costs are total costs divided by

Accepted Answer

A)  total output. 
B)  total fixed costs. 
C)  total variable costs. 
D)  the total number of workers employed. 
A)  total output. 
B)  total fixed costs. 
C)  total variable costs. 
D)  the total number of workers employed.

Question 13

Cost schedule  
-The above table shows a firm's

Accepted Answer

A)  long-run costs. 
B)  short-run costs. 
C)  short-run and long-run costs. 
D)  More information is needed to determine if the costs are long-run costs or short-run costs. 
A)  long-run costs. 
B)  short-run costs. 
C)  short-run and long-run costs. 
D)  More information is needed to determine if the costs are long-run costs or short-run costs.

Question 14

-In the above figure, the marginal product of labor is zero at point

Accepted Answer

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

Question 15

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. Why would the long run decisions be riskier than the short run decisions?

Accepted Answer

A)  because the firm has to live with the long run decisions for a long time 
B)  because it is easier to sell the equipment than it is to lay off employees 
C)  because the firm has to raise prices to purchase equipment 
D)  because employees will be upset 
A)  because the firm has to live with the long run decisions for a long time 
B)  because it is easier to sell the equipment than it is to lay off employees 
C)  because the firm has to raise prices to purchase equipment 
D)  because employees will be upset

Question 16

Over the range of output for which the marginal product of labor curve is negatively sloped, the marginal cost curve is negatively sloped.

Accepted Answer

A) True 
 B)False

Question 17

Marginal cost is equal to

Accepted Answer

A)  total cost divided by output. 
B)  output divided by total cost. 
C)  the change in total cost divided by the change in total revenue. 
D)  the change in total cost divided by the change in output. 
A)  total cost divided by output. 
B)  output divided by total cost. 
C)  the change in total cost divided by the change in total revenue. 
D)  the change in total cost divided by the change in output.

Question 18

Ernie's Earmuffs produces 200 earmuffs per year at a total cost of $2,000 and $400 of this cost is fixed. If he increases output to 220 earmuffs, his total cost increases to $2100, and his fixed cost remains $400. What is Ernie's marginal cost per earmuff?

Accepted Answer

A)  $105 
B)  $35 
C)  $9.55 
D)  $5 
A)  $105 
B)  $35 
C)  $9.55 
D)  $5

Question 19

The long run is distinguished from the short run because only in the long run

Accepted Answer

A)  output prices can vary. 
B)  factor of production prices can vary. 
C)  the quantities of all factors of production can be varied. 
D)  the firm no longer maximizes its profit. 
A)  output prices can vary. 
B)  factor of production prices can vary. 
C)  the quantities of all factors of production can be varied. 
D)  the firm no longer maximizes its profit.

Question 20

Marginal cost eventually increases because

Accepted Answer

A)  of the law of diminishing returns. 
B)  eventually each additional worker produces a successively smaller addition to output. 
C)  the marginal product of the variable input eventually falls. 
D)  All of the above answers are correct. 
A)  of the law of diminishing returns. 
B)  eventually each additional worker produces a successively smaller addition to output. 
C)  the marginal product of the variable input eventually falls. 
D)  All of the above answers are correct.

-The table above shows the short-run product schedule for Virginia's Tee-Shirts. The worker for whom the law of diminishing returns initially occurs is the ________ worker.

-The above figure shows the costs at Barney's Bagel Bakery. For which of the following levels of output does the marginal product of labor exceed the average product of labor?

An example of a variable factor of production in the short run is

Most total product curves have

Which of the following statements is TRUE?

-The table above gives production information for Bob's Baseball Cap Company. Bob's total cost when zero caps are produced is $200 and workers cost $10 per hour. The total fixed cost of producing 10 baseball hats per hour is

"Diseconomies of scale" occur in

In the short run

Marginal cost is calculated as

The average total cost curve

-Cindy's Sweaters' production function is shown in the above table. Cindy rents two knitting machines for $30 a day each and hires workers at a wage rate of $40 a day. If Cindy produces 18 sweaters per day, what is her total cost?

Average total costs are total costs divided by

Cost schedule -The above table shows a firm's

-In the above figure, the marginal product of labor is zero at point

Over the range of output for which the marginal product of labor curve is negatively sloped, the marginal cost curve is negatively sloped.

Marginal cost is equal to

Ernie's Earmuffs produces 200 earmuffs per year at a total cost of $2,000 and $400 of this cost is fixed. If he increases output to 220 earmuffs, his total cost increases to $2100, and his fixed cost remains $400. What is Ernie's marginal cost per earmuff?

The long run is distinguished from the short run because only in the long run

Marginal cost eventually increases because

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 table above shows the short-run product schedule for Virginia's Tee-Shirts. The worker for whom the law of diminishing returns initially occurs is the ________ worker.

-The above figure shows the costs at Barney's Bagel Bakery. For which of the following levels of output does the marginal product of labor exceed the average product of labor?

An example of a variable factor of production in the short run is

Most total product curves have

Which of the following statements is TRUE?

-The table above gives production information for Bob's Baseball Cap Company. Bob's total cost when zero caps are produced is $200 and workers cost $10 per hour. The total fixed cost of producing 10 baseball hats per hour is

"Diseconomies of scale" occur in

In the short run

Marginal cost is calculated as

The average total cost curve

-Cindy's Sweaters' production function is shown in the above table. Cindy rents two knitting machines for $30 a day each and hires workers at a wage rate of $40 a day. If Cindy produces 18 sweaters per day, what is her total cost?

Average total costs are total costs divided by

Cost schedule -The above table shows a firm's

-In the above figure, the marginal product of labor is zero at point

Over the range of output for which the marginal product of labor curve is negatively sloped, the marginal cost curve is negatively sloped.

Marginal cost is equal to

Ernie's Earmuffs produces 200 earmuffs per year at a total cost of $2,000 and $400 of this cost is fixed. If he increases output to 220 earmuffs, his total cost increases to $2100, and his fixed cost remains $400. What is Ernie's marginal cost per earmuff?

The long run is distinguished from the short run because only in the long run

Marginal cost eventually increases because

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