Question 1

If the marginal product curve is increasing from workers 1-89 and then decreases steadily,crossing the horizontal axis at 190 workers,we know that

Accepted Answer

A) the total output curve increases from workers 1-89,decreases from workers 90-189,and becomes 0 at the 190th worker. 
B) the total output curve is increasing at an increasing rate from workers 1-89,then increases at a decreasing rate until the 190th worker,after which it decreases. 
C) the total output curve is increasing throughout,although at an increasing rate for the first 190 workers and at a decreasing rate after the 190th worker. 
D) diminishing marginal product sets in with the 190th worker. 
A) the total output curve increases from workers 1-89,decreases from workers 90-189,and becomes 0 at the 190th worker. 
B) the total output curve is increasing at an increasing rate from workers 1-89,then increases at a decreasing rate until the 190th worker,after which it decreases. 
C) the total output curve is increasing throughout,although at an increasing rate for the first 190 workers and at a decreasing rate after the 190th worker. 
D) diminishing marginal product sets in with the 190th worker.

Question 2

$$\begin{array} { l c r l } 
\text { Q } & \text { TFC } & \text { TVC } & \text { TC } \
\hline 0 & \$ 90 & \$ 0 & \$ 90 \
1 & 90 & 25 & 115 \
2 & 90 & 32 & 122 \
3 & 90 & 42 & 132 \
4 & 90 & 64 & 154 \
5 & 90 & 95 & 185
\end{array}$$
-Refer to the above table.At an output of 5 units,average total costs are

Accepted Answer

A) $18. 
B) $19. 
C) $37. 
D) $185. 
A) $18. 
B) $19. 
C) $37. 
D) $185.

Question 3

When the average physical product is rising,

Accepted Answer

A) total cost is falling. 
B) average total cost is increasing. 
C) average variable cost is falling. 
D) marginal cost is always rising. 
A) total cost is falling. 
B) average total cost is increasing. 
C) average variable cost is falling. 
D) marginal cost is always rising.

Question 4

A firm has average fixed costs of $0.20 and average variable costs of $2.50 at an output of 500 units.The firm's total costs are therefore

Accepted Answer

A) $1,250. 
B) $1,350. 
C) $1,150. 
D) $1,500. 
A) $1,250. 
B) $1,350. 
C) $1,150. 
D) $1,500.

Question 5

The marginal physical product of labor is calculated assuming other factor inputs

Accepted Answer

A) increase more than proportionately. 
B) increase less than proportionately. 
C) remain constant. 
D) decrease. 
A) increase more than proportionately. 
B) increase less than proportionately. 
C) remain constant. 
D) decrease.

Question 6

When marginal costs are rising,

Accepted Answer

A) marginal physical product is also rising. 
B) marginal physical product is falling. 
C) average physical product is rising. 
D) average physical product is falling. 
A) marginal physical product is also rising. 
B) marginal physical product is falling. 
C) average physical product is rising. 
D) average physical product is falling.

Question 7

Minimum efficient scale is defined as

Accepted Answer

A) the lowest output level at which long-run average costs are at their minimum. 
B) the amount of labor that maximizes the marginal product of labor. 
C) the point at which marginal cost,average variable cost,and average fixed cost are all equal. 
D) the point at which economies of scale are at their maximum. 
A) the lowest output level at which long-run average costs are at their minimum. 
B) the amount of labor that maximizes the marginal product of labor. 
C) the point at which marginal cost,average variable cost,and average fixed cost are all equal. 
D) the point at which economies of scale are at their maximum.

Question 8

"In economics,the short run commonly refers to a period within one year and the long run is a period longer than one year." Do you agree or disagree? Explain your answer.

Accepted Answer

Disagree.The time period of the short ru

Question 9

The average fixed cost curve

Accepted Answer

A) is parallel to the x-axis. 
B) is the distance between the TC and TVC curves. 
C) slopes downward as output increases. 
D) increases as the cost of inputs rise. 
A) is parallel to the x-axis. 
B) is the distance between the TC and TVC curves. 
C) slopes downward as output increases. 
D) increases as the cost of inputs rise.

Question 10

Economies of scale exist where the long-run average cost curve is

Accepted Answer

A) horizontal. 
B) downward sloping. 
C) upward sloping. 
D) tangent to the marginal cost curve. 
A) horizontal. 
B) downward sloping. 
C) upward sloping. 
D) tangent to the marginal cost curve.

Question 11

Marginal costs are defined as

Accepted Answer

A) the change in total costs due to a one-unit change in production. 
B) costs that are viewed as marginal; of little or small importance. 
C) costs that represent a change,but one that cannot be measured correctly. 
D) the change in the decisions that are made by households and firms. 
A) the change in total costs due to a one-unit change in production. 
B) costs that are viewed as marginal; of little or small importance. 
C) costs that represent a change,but one that cannot be measured correctly. 
D) the change in the decisions that are made by households and firms.

Question 12

What is the law of diminishing marginal product? Is it a realistic concept for describing the real world? Explain.

Accepted Answer

The law of diminishing marginal product

Question 13

At an output at which ATC is greater than MC,

Accepted Answer

A) the ATC curve is downward sloping. 
B) the ATC curve is upward sloping. 
C) the AFC curve is upward sloping. 
D) the AVC curve is upward sloping. 
A) the ATC curve is downward sloping. 
B) the ATC curve is upward sloping. 
C) the AFC curve is upward sloping. 
D) the AVC curve is upward sloping.

Question 14

$$\begin{array} { c c } 
\text { Total Output } & \text { Total Costs } \
\hline 0 & \$ 10 \
1 & 18 \
2 & 21 \
3 & 23 \
4 & 24 \
5 & 26 \
6 & 29 \
7 & 33 \
8 & 38 \
9 & 44 \
10 & 51
\end{array}$$
-Using the above table,we see that when output is 4 units,average variable cost equals

Accepted Answer

A) $24.00. 
B) $14.00. 
C) $3.50. 
D) $6.00. 
A) $24.00. 
B) $14.00. 
C) $3.50. 
D) $6.00.

Question 15

Which of the following is TRUE about the long run?

Accepted Answer

A) All resources are variable. 
B) All resources are fixed. 
C) At least one resource is fixed. 
D) None of the above. 
A) All resources are variable. 
B) All resources are fixed. 
C) At least one resource is fixed. 
D) None of the above.

Question 16

Fred's Franks originally sold hotdogs and soft drinks from a cart located in front of City Hall.Then Fred purchased another hotdog cart and hired someone to sell hotdogs and soft drinks near the high school.Both locations have been successful.When Fred's Franks expanded to two locations,which of the following did NOT occur?

Accepted Answer

A) Fred's production function changed. 
B) Production increased. 
C) The company increased the inputs it employs. 
D) The firm employed additional capital. 
A) Fred's production function changed. 
B) Production increased. 
C) The company increased the inputs it employs. 
D) The firm employed additional capital.

Question 17

-Use the above figure.The AVC at output 10 is

Accepted Answer

A) $20.00. 
B) $1.00. 
C) $2.00. 
D) $3.00. 
A) $20.00. 
B) $1.00. 
C) $2.00. 
D) $3.00.

Question 18

An increase in long-run average costs resulting from increases in output is

Accepted Answer

A) attributed to economies of scale. 
B) attributed to diseconomies to scale. 
C) attributed to constant returns to scale. 
D) attributed to the law of diminishing marginal product. 
A) attributed to economies of scale. 
B) attributed to diseconomies to scale. 
C) attributed to constant returns to scale. 
D) attributed to the law of diminishing marginal product.

Question 19

$$\begin{array} { c c c c } 
\begin{array} { c } 
\text { Quantity of } \
\text { Labor }
\end{array} & \begin{array} { c } 
\text { Total } \
\text { Product }
\end{array} & \begin{array} { c } 
\text { Average } \
\text { Product }
\end{array} & \begin{array} { c } 
\text { Marginal } \
\text { Product }
\end{array} \
\hline 1 & & 320 & \
2 & & 335 & \
3 & & & 338 \
4 &&&320 \
\hline
\end{array}$$
-Refer to the above table.What does total product equal when 2 units of labor are used?

Accepted Answer

A) 320 
B) 335 
C) 350 
D) 670 
A) 320 
B) 335 
C) 350 
D) 670

Question 20

For a firm,we define the short run as a period of time during which

Accepted Answer

A) at least one input cannot be changed. 
B) all inputs can be changed. 
C) only the plant size can be changed. 
D) all inputs cannot be changed. 
A) at least one input cannot be changed. 
B) all inputs can be changed. 
C) only the plant size can be changed. 
D) all inputs cannot be changed.

If the marginal product curve is increasing from workers 1-89 and then decreases steadily,crossing the horizontal axis at 190 workers,we know that

Q TFC TVC TC 0 \ 90 \ 0 \ 90 1 90 25 115 2 90 32 122 3 90 42 132 4 90 64 154 5 90 95 185 -Refer to the above table.At an output of 5 units,average total costs are

When the average physical product is rising,

A firm has average fixed costs of $0.20 and average variable costs of $2.50 at an output of 500 units.The firm's total costs are therefore

The marginal physical product of labor is calculated assuming other factor inputs

When marginal costs are rising,

Minimum efficient scale is defined as

"In economics,the short run commonly refers to a period within one year and the long run is a period longer than one year." Do you agree or disagree? Explain your answer.

The average fixed cost curve

Economies of scale exist where the long-run average cost curve is

Marginal costs are defined as

What is the law of diminishing marginal product? Is it a realistic concept for describing the real world? Explain.

At an output at which ATC is greater than MC,

Total Output Total Costs 0 \ 10 1 18 2 21 3 23 4 24 5 26 6 29 7 33 8 38 9 44 10 51 -Using the above table,we see that when output is 4 units,average variable cost equals

Which of the following is TRUE about the long run?

-Use the above figure.The AVC at output 10 is

An increase in long-run average costs resulting from increases in output is

Quantity of Labor Total Product Average Product Marginal Product 1 320 2 335 3 338 4 320 -Refer to the above table.What does total product equal when 2 units of labor are used?

For a firm,we define the short run as a period of time during which

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

Demand and Supply Elasticity

Consumer Choice

Rents, profits, and the Financial Environment of Business

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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Exam 9: The Firm: Cost and Output Determination

If the marginal product curve is increasing from workers 1-89 and then decreases steadily,crossing the horizontal axis at 190 workers,we know that

Q TFC TVC TC 0 \ 90 \ 0 \ 90 1 90 25 115 2 90 32 122 3 90 42 132 4 90 64 154 5 90 95 185 -Refer to the above table.At an output of 5 units,average total costs are

When the average physical product is rising,

A firm has average fixed costs of $0.20 and average variable costs of $2.50 at an output of 500 units.The firm's total costs are therefore

The marginal physical product of labor is calculated assuming other factor inputs

When marginal costs are rising,

Minimum efficient scale is defined as

"In economics,the short run commonly refers to a period within one year and the long run is a period longer than one year." Do you agree or disagree? Explain your answer.

The average fixed cost curve

Economies of scale exist where the long-run average cost curve is

Marginal costs are defined as

What is the law of diminishing marginal product? Is it a realistic concept for describing the real world? Explain.

At an output at which ATC is greater than MC,

Total Output Total Costs 0 \ 10 1 18 2 21 3 23 4 24 5 26 6 29 7 33 8 38 9 44 10 51 -Using the above table,we see that when output is 4 units,average variable cost equals

Which of the following is TRUE about the long run?

-Use the above figure.The AVC at output 10 is

An increase in long-run average costs resulting from increases in output is

Quantity of Labor Total Product Average Product Marginal Product 1 320 2 335 3 338 4 320 -Refer to the above table.What does total product equal when 2 units of labor are used?

For a firm,we define the short run as a period of time during which

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

Demand and Supply Elasticity

Consumer Choice

Rents, profits, and the Financial Environment of Business

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters