Question 1

When a business expands production and increases sales,what generally happens to revenue?

Accepted Answer

A)  Revenue falls because costs also rise. 
B)  Revenue rises because the business is selling more output. 
C)  Revenue is unaffected by the level of production or the number of sales. 
D)  It depends on whether the firm has increasing or diminishing marginal revenue. 
A)  Revenue falls because costs also rise. 
B)  Revenue rises because the business is selling more output. 
C)  Revenue is unaffected by the level of production or the number of sales. 
D)  It depends on whether the firm has increasing or diminishing marginal revenue.

Question 2

The added expense of producing one more unit of output is called the

Accepted Answer

A)  marginal product. 
B)  marginal cost. 
C)  average cost. 
D)  production cost. 
A)  marginal product. 
B)  marginal cost. 
C)  average cost. 
D)  production cost.

Question 3

What word describes the money that a business pays for its inputs?

Accepted Answer

A)  Cost. 
B)  Output. 
C)  Revenue. 
D)  Production. 
A)  Cost. 
B)  Output. 
C)  Revenue. 
D)  Production.

Question 4

The average product is calculated by dividing input by the number of hours worked.

Accepted Answer

A) True 
 B)False

Question 5

Inputs to production do NOT include

Accepted Answer

A)  labor. 
B)  land. 
C)  average product. 
D)  business know-how. 
A)  labor. 
B)  land. 
C)  average product. 
D)  business know-how.

Question 6

The marginal product is the extra amount of output a firm can generate by adding one more hour of labor (or one more worker).

Accepted Answer

A) True 
 B)False

Question 7

In a simple grass-mowing business,the lawn mower and labor would be

Accepted Answer

A)  outputs. 
B)  inputs. 
C)  production. 
D)  profit. 
A)  outputs. 
B)  inputs. 
C)  production. 
D)  profit.

Question 8

The __________ summarizes the output of the business,given the level of inputs.

Accepted Answer

A)  marginal function 
B)  average cost 
C)  marginal revenue 
D)  production function 
A)  marginal function 
B)  average cost 
C)  marginal revenue 
D)  production function

Question 9

What word describes the goods and services that are used to produce outputs for a business?

Accepted Answer

A)  Production. 
B)  Cost. 
C)  Revenue. 
D)  Inputs. 
A)  Production. 
B)  Cost. 
C)  Revenue. 
D)  Inputs.

Question 10

Explain how marginal product can be negative.

Accepted Answer

Adding more inputs can increase output;

Question 11

The hours of work supplied by various types of workers are referred to by economists as

Accepted Answer

A)  labor. 
B)  production. 
C)  revenue. 
D)  cost. 
A)  labor. 
B)  production. 
C)  revenue. 
D)  cost.

Question 12

If you add too many inputs,your business may experience

Accepted Answer

A)  increasing marginal revenue. 
B)  diminishing marginal product. 
C)  diminishing cost input. 
D)  accelerated product function. 
A)  increasing marginal revenue. 
B)  diminishing marginal product. 
C)  diminishing cost input. 
D)  accelerated product function.

Question 13

The extra amount of output a business can generate by adding one more hour of labor is called

Accepted Answer

A)  Marginal revenue. 
B)  Labor input. 
C)  Marginal cost. 
D)  Marginal product. 
A)  Marginal revenue. 
B)  Labor input. 
C)  Marginal cost. 
D)  Marginal product.

Question 14

As the market price of a good rises,businesses will respond by producing more of that good because

Accepted Answer

A)  the rising price causes marginal cost to fall. 
B)  marginal cost exceeds marginal revenue after the price increase. 
C)  laws and regulations require them to do so. 
D)  marginal revenue exceeds marginal cost after the price increase. 
A)  the rising price causes marginal cost to fall. 
B)  marginal cost exceeds marginal revenue after the price increase. 
C)  laws and regulations require them to do so. 
D)  marginal revenue exceeds marginal cost after the price increase.

Question 15

Cost is what a business receives after subtracting expenses from revenue.

Accepted Answer

A) True 
 B)False

Question 16

One strategy for long-term profit maximization is

Accepted Answer

A)  innovation. 
B)  offering consistently higher prices. 
C)  being the lowest-price competitor. 
D)  utilization of private business incubators. 
A)  innovation. 
B)  offering consistently higher prices. 
C)  being the lowest-price competitor. 
D)  utilization of private business incubators.

Question 17

The total cost of production is determined by adding which of the following costs?

Accepted Answer

A)  Labor, capital and land, intermediate inputs, and accumulating business know-how. 
B)  Labor, capital, revenue, and marginal product. 
C)  Labor, land, capital, and revenue. 
D)  Labor, business know-how, capital, and land. 
A)  Labor, capital and land, intermediate inputs, and accumulating business know-how. 
B)  Labor, capital, revenue, and marginal product. 
C)  Labor, land, capital, and revenue. 
D)  Labor, business know-how, capital, and land.

Question 18

Economists generally assume that the main goal of most businesses in the economy is to

Accepted Answer

A)  be responsible corporate citizens. 
B)  maximize profits. 
C)  provide jobs for the local population. 
D)  Avoid having to make very many decisions. 
A)  be responsible corporate citizens. 
B)  maximize profits. 
C)  provide jobs for the local population. 
D)  Avoid having to make very many decisions.

Question 19

Economists think of a business as a machine,where you put inputs in one end and get outputs from the other end.This metaphor is called the

Accepted Answer

A)  revenue process. 
B)  cost process. 
C)  profit process. 
D)  production function. 
A)  revenue process. 
B)  cost process. 
C)  profit process. 
D)  production function.

Question 20

Businesses have two types of cost: fixed and variable.

Accepted Answer

A) True 
 B)False

When a business expands production and increases sales,what generally happens to revenue?

The added expense of producing one more unit of output is called the

What word describes the money that a business pays for its inputs?

The average product is calculated by dividing input by the number of hours worked.

Inputs to production do NOT include

The marginal product is the extra amount of output a firm can generate by adding one more hour of labor (or one more worker).

In a simple grass-mowing business,the lawn mower and labor would be

The __________ summarizes the output of the business,given the level of inputs.

What word describes the goods and services that are used to produce outputs for a business?

Explain how marginal product can be negative.

The hours of work supplied by various types of workers are referred to by economists as

If you add too many inputs,your business may experience

The extra amount of output a business can generate by adding one more hour of labor is called

As the market price of a good rises,businesses will respond by producing more of that good because

Cost is what a business receives after subtracting expenses from revenue.

One strategy for long-term profit maximization is

The total cost of production is determined by adding which of the following costs?

Economists generally assume that the main goal of most businesses in the economy is to

Economists think of a business as a machine,where you put inputs in one end and get outputs from the other end.This metaphor is called the

Businesses have two types of cost: fixed and variable.

Introduction

Demand and Supply: The Basics of the Market Economy

Market Equilibrium and Shifts

Competition and Market Power

Government and the Economy

The First Step Into Macroeconomics

Inflation

Growth

Business Cycles, unemployment and Inflation

Fiscal Policy

Monetary Policy

The Financial Markets

International Trade

Technological Change

Economics of the Labor Market

The Distribution of Income

Economics of Retirement and Healthcare

Economics of Energy, the Environment, and Global Climate Change Glossary

Filters

Exam 4: How Businesses Work

When a business expands production and increases sales,what generally happens to revenue?

The added expense of producing one more unit of output is called the

What word describes the money that a business pays for its inputs?

The average product is calculated by dividing input by the number of hours worked.

Inputs to production do NOT include

The marginal product is the extra amount of output a firm can generate by adding one more hour of labor (or one more worker).

In a simple grass-mowing business,the lawn mower and labor would be

The __________ summarizes the output of the business,given the level of inputs.

What word describes the goods and services that are used to produce outputs for a business?

Explain how marginal product can be negative.

The hours of work supplied by various types of workers are referred to by economists as

If you add too many inputs,your business may experience

The extra amount of output a business can generate by adding one more hour of labor is called

As the market price of a good rises,businesses will respond by producing more of that good because

Cost is what a business receives after subtracting expenses from revenue.

One strategy for long-term profit maximization is

The total cost of production is determined by adding which of the following costs?

Economists generally assume that the main goal of most businesses in the economy is to

Economists think of a business as a machine,where you put inputs in one end and get outputs from the other end.This metaphor is called the

Businesses have two types of cost: fixed and variable.

Introduction

Demand and Supply: The Basics of the Market Economy

Market Equilibrium and Shifts

Competition and Market Power

Government and the Economy

The First Step Into Macroeconomics

Inflation

Growth

Business Cycles, unemployment and Inflation

Fiscal Policy

Monetary Policy

The Financial Markets

International Trade

Technological Change

Economics of the Labor Market

The Distribution of Income

Economics of Retirement and Healthcare

Economics of Energy, the Environment, and Global Climate Change Glossary

Filters