Question 1

What are diseconomies of scale and why might they occur?

Accepted Answer

Diseconomies of scale mean that as the f

Question 2

What is the relationship between the marginal product of labor and the marginal cost?

Accepted Answer

Initially, as each additional unit of la

Question 3

When marginal cost is greater than average total cost, the

Accepted Answer

A)  marginal cost decreases as output increases. 
B)  marginal cost does not change as output increases. 
C)  average total cost increases as output increases. 
D)  average total cost decreases as output increases. 
A)  marginal cost decreases as output increases. 
B)  marginal cost does not change as output increases. 
C)  average total cost increases as output increases. 
D)  average total cost decreases as output increases.

Question 4

Which curve shows the lowest average total cost at which it is possible to produce each output when the firm has time to change both its labor force and plant size?

Accepted Answer

The long-run average cost curv

Question 5

The marginal cost curve passes through the ________ points of the ________ cost curve and the ________ cost curve.

Accepted Answer

A)  minimum; average total; average variable 
B)  minimum; average total; average fixed 
C)  maximum; total cost; total variable 
D)  minimum; average variable; average fixed 
A)  minimum; average total; average variable 
B)  minimum; average total; average fixed 
C)  maximum; total cost; total variable 
D)  minimum; average variable; average fixed

Question 6

A firm's marginal cost is the increase in its total cost divided by the increase in its

Accepted Answer

A)  quantity of labor. 
B)  average cost. 
C)  output. 
D)  average revenue. 
A)  quantity of labor. 
B)  average cost. 
C)  output. 
D)  average revenue.

Question 7

Diminishing marginal returns to labor occur because

Accepted Answer

A)  after a while it is hard to find a good worker. 
B)  the capital resources used by the firm are fixed in the short run. 
C)  workers become more efficient over time. 
D)  larger companies are less efficient. 
A)  after a while it is hard to find a good worker. 
B)  the capital resources used by the firm are fixed in the short run. 
C)  workers become more efficient over time. 
D)  larger companies are less efficient.

Question 8

Which average cost curves are U-shaped?

Accepted Answer

Both the average total cost an

Question 9

Total product divided by the total quantity of labor employed equals the

Accepted Answer

A)  average product of labor. 
B)  marginal product of labor. 
C)  average total cost. 
D)  average variable cost. 
A)  average product of labor. 
B)  marginal product of labor. 
C)  average total cost. 
D)  average variable cost.

Question 10

-In the above figure, the average fixed cost curve is curve

Accepted Answer

A)  A. 
B)  B. 
C)  C. 
D)  D. 
A)  A. 
B)  B. 
C)  C. 
D)  D.

Question 11

-The table above shows Randy's Shirts' short-run production function. Randy hires workers at a wage rate of $50 a day and his total fixed cost is $100.
a) What is the marginal product of the 3rd worker?
b) What is Randy's average fixed cost if 48 shirts are produced?
c) What is Randy's average variable cost if 56 shirts are produced?
d) What is Randy's marginal cost of producing the 52nd sweater?
e) What is Randy's average total cost if 48 sweaters are produced?

Accepted Answer

a) When the 3rd worker is hired, output

Question 12

-The above table shows the total product schedule for the campus book store. If employees are paid $6 per hour and there are no other variable costs, then what is the marginal cost (MC) per book of increasing book sales from 83 to 87 books per hour?

Accepted Answer

A)  $6.00 
B)  $4.00 
C)  $2.07 
D)  $1.50 
A)  $6.00 
B)  $4.00 
C)  $2.07 
D)  $1.50

Question 13

Which type of cost is does not change as the quantity of output produced changes?

Accepted Answer

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

Question 14

Average total costs are

Accepted Answer

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

Question 15

Which of the following would be classified as a fixed cost for the proprietor who owns and operates the local Texaco station?

Accepted Answer

A)  the federal excise tax paid on each gallon of Texaco gasoline sold 
B)  the state income tax on the profit earned 
C)  the rent paid on the 10 year lease for the property on which the station is located 
D)  the Social Security tax the owner pays the federal government on the owner's income 
A)  the federal excise tax paid on each gallon of Texaco gasoline sold 
B)  the state income tax on the profit earned 
C)  the rent paid on the 10 year lease for the property on which the station is located 
D)  the Social Security tax the owner pays the federal government on the owner's income

Question 16

-The above figure represents the average total cost curves of a wheat farmer.
a) Which average total cost curve has the lowest average total cost of producing 30,000 bushels of wheat?
b) Over what range of output is the farmer experiencing economies of scale?
c) Over what range of output is the farmer experiencing diseconomies of scale?
d) Which average total cost curve has the lowest possible average cost of production?
e) Which average total cost curve represents the largest plant?

Accepted Answer

a) ATC₃ has the lowest average total cost

Question 17

A firm's marginal cost is $82, its average total cost is $50, and its output is 800 units. Its total cost of producing 801 units is

Accepted Answer

A)  less than $40,000. 
B)  between $40,000 and $40,050. 
C)  between $40,050 and $40,080. 
D)  greater than $40,080. 
A)  less than $40,000. 
B)  between $40,000 and $40,050. 
C)  between $40,050 and $40,080. 
D)  greater than $40,080.

Question 18

-Cindy's Sweaters' production function is shown in the above table. What is the marginal product of labor when the 4th worker is hired?

Accepted Answer

A)  4 sweaters per day 
B)  2 sweaters per day 
C)  20 sweaters per day 
D)  5 sweaters per day 
A)  4 sweaters per day 
B)  2 sweaters per day 
C)  20 sweaters per day 
D)  5 sweaters per day

Question 19

The LRAC curve

Accepted Answer

A)  is the minimum points on all the short-run ATC curves. 
B)  shows the lowest possible marginal cost of producing the different levels of output. 
C)  shows the lowest attainable average total cost for all levels of output when all inputs can be varied. 
D)  generally lies above the short-run ATC curves. 
A)  is the minimum points on all the short-run ATC curves. 
B)  shows the lowest possible marginal cost of producing the different levels of output. 
C)  shows the lowest attainable average total cost for all levels of output when all inputs can be varied. 
D)  generally lies above the short-run ATC curves.

Question 20

Marginal cost ________ as the quantity produced is increased.

Accepted Answer

A)  first increases and then decreases 
B)  first decreases and then increases 
C)  always increases 
D)  always decreases 
A)  first increases and then decreases 
B)  first decreases and then increases 
C)  always increases 
D)  always decreases

What are diseconomies of scale and why might they occur?

What is the relationship between the marginal product of labor and the marginal cost?

When marginal cost is greater than average total cost, the

Which curve shows the lowest average total cost at which it is possible to produce each output when the firm has time to change both its labor force and plant size?

The marginal cost curve passes through the points of the cost curve and the cost curve.

A firm's marginal cost is the increase in its total cost divided by the increase in its

Diminishing marginal returns to labor occur because

Which average cost curves are U-shaped?

Total product divided by the total quantity of labor employed equals the

-In the above figure, the average fixed cost curve is curve

-The above table shows the total product schedule for the campus book store. If employees are paid $6 per hour and there are no other variable costs, then what is the marginal cost (MC) per book of increasing book sales from 83 to 87 books per hour?

Which type of cost is does not change as the quantity of output produced changes?

Average total costs are

Which of the following would be classified as a fixed cost for the proprietor who owns and operates the local Texaco station?

A firm's marginal cost is $82, its average total cost is $50, and its output is 800 units. Its total cost of producing 801 units is

-Cindy's Sweaters' production function is shown in the above table. What is the marginal product of labor when the 4th worker is hired?

The LRAC curve

Marginal cost ________ as the quantity produced is increased.

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

What are diseconomies of scale and why might they occur?

What is the relationship between the marginal product of labor and the marginal cost?

When marginal cost is greater than average total cost, the

Which curve shows the lowest average total cost at which it is possible to produce each output when the firm has time to change both its labor force and plant size?

The marginal cost curve passes through the ________ points of the ________ cost curve and the ________ cost curve.

A firm's marginal cost is the increase in its total cost divided by the increase in its

Diminishing marginal returns to labor occur because

Which average cost curves are U-shaped?

Total product divided by the total quantity of labor employed equals the

-In the above figure, the average fixed cost curve is curve

-The above table shows the total product schedule for the campus book store. If employees are paid $6 per hour and there are no other variable costs, then what is the marginal cost (MC) per book of increasing book sales from 83 to 87 books per hour?

Which type of cost is does not change as the quantity of output produced changes?

Average total costs are

Which of the following would be classified as a fixed cost for the proprietor who owns and operates the local Texaco station?

A firm's marginal cost is $82, its average total cost is $50, and its output is 800 units. Its total cost of producing 801 units is

-Cindy's Sweaters' production function is shown in the above table. What is the marginal product of labor when the 4th worker is hired?

The LRAC curve

Marginal cost ________ as the quantity produced is increased.

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 marginal cost curve passes through the points of the cost curve and the cost curve.