Question 1

In the long run, a firm can vary

Accepted Answer

A)  its capital but not its labor. 
B)  its labor but not its capital. 
C)  both its labor and its capital. 
D)  neither its labor nor its capital. 
A)  its capital but not its labor. 
B)  its labor but not its capital. 
C)  both its labor and its capital. 
D)  neither its labor nor its capital.

Question 2

Cost schedule  
-In the above table, the total cost of producing 9 units of output is

Accepted Answer

A)  $20. 
B)  $30. 
C)  $50. 
D)  $70. 
A)  $20. 
B)  $30. 
C)  $50. 
D)  $70.

Question 3

Angel Rodriguez pulls up in his 24-foot panel truck in front of Sezz Medi Brick Oven Pizza in Upper Manhattan. Even though it's the middle of the summer, he's delivering- firewood. He says even though fuel costs have doubled in the past year, it's still worth the premium he gets delivering ash and cherry to the captive and growing market in NYC. Which of the following statements is TRUE about short run costs for Angel?

Accepted Answer

A)  His truck is a fixed cost and gasoline is a variable cost. 
B)  His truck is a variable cost and gasoline is a fixed cost. 
C)  Both his truck and gasoline is a variable cost. 
D)  Neither his truck nor gasoline is a variable cost. 
A)  His truck is a fixed cost and gasoline is a variable cost. 
B)  His truck is a variable cost and gasoline is a fixed cost. 
C)  Both his truck and gasoline is a variable cost. 
D)  Neither his truck nor gasoline is a variable cost.

Question 4

-In the above figure, after the second worker is hired, the marginal product of labor is

Accepted Answer

A)  increasing. 
B)  diminishing. 
C)  constant. 
D)  zero. 
A)  increasing. 
B)  diminishing. 
C)  constant. 
D)  zero.

Question 5

-The table above gives costs at Jan's Bike Shop. Unfortunately, Jan's record keeping has been spotty. Each worker is paid $100 a day. Labor costs are the only variable costs of production. What is the total fixed cost of producing 64 bikes?

Accepted Answer

A)  $200 
B)  $300 
C)  $400 
D)  $500 
A)  $200 
B)  $300 
C)  $400 
D)  $500

Question 6

A cost that has already been made and cannot be recovered is called a

Accepted Answer

A)  variable cost. 
B)  fixed cost. 
C)  sunk cost. 
D)  marginal cost. 
A)  variable cost. 
B)  fixed cost. 
C)  sunk cost. 
D)  marginal cost.

Question 7

The range of output over which a firm's average variable cost is decreasing is the same as the range over which its

Accepted Answer

A)  marginal cost is increasing. 
B)  average fixed cost is decreasing. 
C)  average product is increasing. 
D)  average product is decreasing. 
A)  marginal cost is increasing. 
B)  average fixed cost is decreasing. 
C)  average product is increasing. 
D)  average product is decreasing.

Question 8

When marginal cost is greater than average cost, average cost decreases as output increases.

Accepted Answer

A) True 
 B)False

Question 9

-The table above gives a firm's total product schedule. Suppose labor is the only variable factor of production. The price of labor is $500 per week and total fixed costs are $600 per week. What is the marginal cost of producing the 90th unit?

Accepted Answer

A)  $10.00 
B)  $24.92 
C)  $31.61 
D)  $50.00 
A)  $10.00 
B)  $24.92 
C)  $31.61 
D)  $50.00

Question 10

When long-run average cost decreases as output increases, there are definitely I. increasing marginal returns.
II) economies of scale.

Accepted Answer

A)  only I 
B)  only II 
C)  both I and II 
D)  neither I nor II 
A)  only I 
B)  only II 
C)  both I and II 
D)  neither I nor II

Question 11

A firm's long-run average cost curve

Accepted Answer

A)  shows the lowest attainable average total cost of producing any level of output when the plant and labor are fixed. 
B)  is the sum of all of its short-run average cost curves. 
C)  tells the firm which plant size to use and which quantity of labor to use to minimize the cost of producing any level of output. 
D)  all of the above 
A)  shows the lowest attainable average total cost of producing any level of output when the plant and labor are fixed. 
B)  is the sum of all of its short-run average cost curves. 
C)  tells the firm which plant size to use and which quantity of labor to use to minimize the cost of producing any level of output. 
D)  all of the above

Question 12

When there are diminishing marginal returns to labor, the marginal product of the last worker hired must be negative.

Accepted Answer

A) True 
 B)False

Question 13

Increasing marginal returns to labor might occur at low levels of labor input because of

Accepted Answer

A)  increasing average costs. 
B)  differing factor proportions. 
C)  increasing specialization of tasks. 
D)  decreasing use of machinery and increasing use of technology. 
A)  increasing average costs. 
B)  differing factor proportions. 
C)  increasing specialization of tasks. 
D)  decreasing use of machinery and increasing use of technology.

Question 14

When plotted against the total output, what does the total fixed cost curve look like?

Accepted Answer

The total fixed cost curve is

Question 15

-This month, the local widget factory produced 100 widgets. The total variable cost of production was $500 and the average total cost of production was $8.
a) What is the total cost?
b) What is the total fixed cost?
c) What is the average fixed cost?
d) What is the average variable cost?

Accepted Answer

a) Total cost can be calculated as avera

Question 16

-Based on the production data for Pat's Pizza Parlor in the above table, which of the following pair of workers have the same average product?

Accepted Answer

A)  1 and 2 
B)  2 and 4 
C)  1 and 5 
D)  2 and 5 
A)  1 and 2 
B)  2 and 4 
C)  1 and 5 
D)  2 and 5

Question 17

Economies of scale refer to

Accepted Answer

A)  the point at which marginal cost equals average cost. 
B)  the fact that in the long run, fixed costs remain constant as output increases. 
C)  the range of output over which the long-run average cost falls as output increases. 
D)  a feature of short-run production functions but not long-run production functions. 
A)  the point at which marginal cost equals average cost. 
B)  the fact that in the long run, fixed costs remain constant as output increases. 
C)  the range of output over which the long-run average cost falls as output increases. 
D)  a feature of short-run production functions but not long-run production functions.

Question 18

The law of diminishing returns makes it clear that as more a variable input is employed, in the ________ the marginal product of the variable input eventually will ________.

Accepted Answer

A)  short run; rise 
B)  long run; rise 
C)  short run; fall 
D)  long run; fall 
A)  short run; rise 
B)  long run; rise 
C)  short run; fall 
D)  long run; fall

Question 19

The long run

Accepted Answer

A)  means a long period of time, always longer than a year. 
B)  is a period of time in which all factors of production can be varied. 
C)  is different for different firms. 
D)  Both answers B and C are correct. 
A)  means a long period of time, always longer than a year. 
B)  is a period of time in which all factors of production can be varied. 
C)  is different for different firms. 
D)  Both answers B and C are correct.

Question 20

Average variable cost is at a minimum at the same amount of output at which

Accepted Answer

A)  average product is at a maximum. 
B)  marginal product is at a maximum. 
C)  average product is at a minimum. 
D)  marginal product is at a minimum. 
A)  average product is at a maximum. 
B)  marginal product is at a maximum. 
C)  average product is at a minimum. 
D)  marginal product is at a minimum.

In the long run, a firm can vary

Cost schedule -In the above table, the total cost of producing 9 units of output is

-In the above figure, after the second worker is hired, the marginal product of labor is

-The table above gives costs at Jan's Bike Shop. Unfortunately, Jan's record keeping has been spotty. Each worker is paid $100 a day. Labor costs are the only variable costs of production. What is the total fixed cost of producing 64 bikes?

A cost that has already been made and cannot be recovered is called a

The range of output over which a firm's average variable cost is decreasing is the same as the range over which its

When marginal cost is greater than average cost, average cost decreases as output increases.

-The table above gives a firm's total product schedule. Suppose labor is the only variable factor of production. The price of labor is $500 per week and total fixed costs are $600 per week. What is the marginal cost of producing the 90th unit?

When long-run average cost decreases as output increases, there are definitely I. increasing marginal returns. II) economies of scale.

A firm's long-run average cost curve

When there are diminishing marginal returns to labor, the marginal product of the last worker hired must be negative.

Increasing marginal returns to labor might occur at low levels of labor input because of

When plotted against the total output, what does the total fixed cost curve look like?

-This month, the local widget factory produced 100 widgets. The total variable cost of production was $500 and the average total cost of production was $8. a) What is the total cost? b) What is the total fixed cost? c) What is the average fixed cost? d) What is the average variable cost?

-Based on the production data for Pat's Pizza Parlor in the above table, which of the following pair of workers have the same average product?

Economies of scale refer to

The law of diminishing returns makes it clear that as more a variable input is employed, in the the marginal product of the variable input eventually will .

The long run

Average variable cost is at a minimum at the same amount of output at which

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

In the long run, a firm can vary

Cost schedule -In the above table, the total cost of producing 9 units of output is

-In the above figure, after the second worker is hired, the marginal product of labor is

-The table above gives costs at Jan's Bike Shop. Unfortunately, Jan's record keeping has been spotty. Each worker is paid $100 a day. Labor costs are the only variable costs of production. What is the total fixed cost of producing 64 bikes?

A cost that has already been made and cannot be recovered is called a

The range of output over which a firm's average variable cost is decreasing is the same as the range over which its

When marginal cost is greater than average cost, average cost decreases as output increases.

-The table above gives a firm's total product schedule. Suppose labor is the only variable factor of production. The price of labor is $500 per week and total fixed costs are $600 per week. What is the marginal cost of producing the 90th unit?

When long-run average cost decreases as output increases, there are definitely I. increasing marginal returns. II) economies of scale.

A firm's long-run average cost curve

When there are diminishing marginal returns to labor, the marginal product of the last worker hired must be negative.

Increasing marginal returns to labor might occur at low levels of labor input because of

When plotted against the total output, what does the total fixed cost curve look like?

-This month, the local widget factory produced 100 widgets. The total variable cost of production was $500 and the average total cost of production was $8. a) What is the total cost? b) What is the total fixed cost? c) What is the average fixed cost? d) What is the average variable cost?

-Based on the production data for Pat's Pizza Parlor in the above table, which of the following pair of workers have the same average product?

Economies of scale refer to

The law of diminishing returns makes it clear that as more a variable input is employed, in the ________ the marginal product of the variable input eventually will ________.

The long run

Average variable cost is at a minimum at the same amount of output at which

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 law of diminishing returns makes it clear that as more a variable input is employed, in the the marginal product of the variable input eventually will .