Question 1

The change in total product occurring when a variable input is increased and all other inputs are held constant is

Accepted Answer

A) average total cost. 
B) marginal cost. 
C) average physical product. 
D) marginal physical product. 
A) average total cost. 
B) marginal cost. 
C) average physical product. 
D) marginal physical product.

Question 2

At Phil's Hot Dog Stand,we found the following:
4 laborers produced 66 hot dogs
5 laborers produced 76 hot dogs
6 laborers produced 84 hot dogs
7 laborers produced 88 hot dogs
What was the marginal physical product of the sixth laborer?

Accepted Answer

A) 10 hot dogs 
B) 8 hot dogs 
C) 6 hot dogs 
D) 4 hot dogs 
A) 10 hot dogs 
B) 8 hot dogs 
C) 6 hot dogs 
D) 4 hot dogs

Question 3

If average total cost is decreasing as more and more units are produced,then marginal cost must be

Accepted Answer

A) rising. 
B) constant. 
C) below average total cost. 
D) negative. 
A) rising. 
B) constant. 
C) below average total cost. 
D) negative.

Question 4

$$\begin{array} { c c } 
\text { Total Output } & \text { Total Costs } \
\hline 0 & \$ 10 \
1 & 18 \
2 & 21 \
3 & 23 \
4 & 24 \
5 & 26 \
6 & 29 \
7 & 33 \
8 & 38 \
9 & 44 \
10 & 51
\end{array}$$
-In the above table,the marginal cost of the ninth unit is

Accepted Answer

A) $4.00. 
B) $5.00. 
C) $6.00. 
D) $7.00. 
A) $4.00. 
B) $5.00. 
C) $6.00. 
D) $7.00.

Question 5

When marginal product is rising,

Accepted Answer

A) total product is falling. 
B) marginal cost is falling. 
C) marginal cost is rising. 
D) average fixed cost is rising. 
A) total product is falling. 
B) marginal cost is falling. 
C) marginal cost is rising. 
D) average fixed cost is rising.

Question 6

A firm has the following production relationship between labor and output,for a fixed capital stock. $$\begin{array} { c r } 
\hline\text { Labor } & \text { Output } \
\hline0 & 0 \
1 & 5 \
2 & 11 \
3 & 18 \
4 & 23 \
5 & 26\\hline
\end{array}$$
-According to the above table,at what usage of labor does diminishing marginal product begin?

Accepted Answer

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

Question 7

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

Accepted Answer

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

Question 8

For an industry in which average costs continue to decline as output rises,what would you expect the minimum efficient scale to be? Explain your answer.

Accepted Answer

When average costs continue to decline a

Question 9

$$\begin{array}{l}
\begin{array} {lll } 
\text {Quantity of}&\text {Total}\
Labor & Product \
\hline 1 & 20 \
2 & 46 \
3 & 63 \
4 & 72\\hline
\end{array}
\end{array}$$
-Refer to the above table.What does the marginal product equal when the quantity of labor goes from 3 to 4?

Accepted Answer

A) 9 
B) 18 
C) 72 
D) 216 
A) 9 
B) 18 
C) 72 
D) 216

Question 10

If the marginal product of an input is falling,then

Accepted Answer

A) average fixed cost is constant. 
B) marginal cost is falling. 
C) average total cost is constant. 
D) marginal cost is rising. 
A) average fixed cost is constant. 
B) marginal cost is falling. 
C) average total cost is constant. 
D) marginal cost is rising.

Question 11

$$\begin{array} { l l l l l l l } 
\text { Q } & \text { TFC } & \text { TVC } & \text { TC } & \text { AFC } & \text { AVC } & \text { ATC } \
1 & & & & & & \
2 & & & & \$ 75 & \$ 25 & \
3 & & & & & \$ 40 & \
\hline
\end{array}$$
-Refer to the above table.What are total variable costs at an output of 2 units?

Accepted Answer

A) $50 
B) $100 
C) $150 
D) $200 
A) $50 
B) $100 
C) $150 
D) $200

Question 12

Another term for the total quantity of output is

Accepted Answer

A) average physical product. 
B) marginal physical product. 
C) total product. 
D) average variable product. 
A) average physical product. 
B) marginal physical product. 
C) total product. 
D) average variable product.

Question 13

"The short-run average total cost curve and the long-run average cost curve are both U-shaped for the same reasons." Do you agree or disagree? Why?

Accepted Answer

Disagree.The U-shaped short-run average

Question 14

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

Accepted Answer

A) $7. 
B) $10. 
C) $22. 
D) $41. 
A) $7. 
B) $10. 
C) $22. 
D) $41.

Question 15

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

Accepted Answer

A) $30.00. 
B) $2.67. 
C) $2.00. 
D) $3.00. 
A) $30.00. 
B) $2.67. 
C) $2.00. 
D) $3.00.

Question 16

The amount of calendar time associated with the long run

Accepted Answer

A) is less than five years. 
B) is greater than one year. 
C) is between one and five years. 
D) varies by industry. 
A) is less than five years. 
B) is greater than one year. 
C) is between one and five years. 
D) varies by industry.

Question 17

Which of the following is true?

Accepted Answer

A) The MC curve intersects AFC at its minimum point. 
B) If MC is below AVC,AVC must be increasing. 
C) If MC is above ATC,ATC must be increasing. 
D) None of the above. 
A) The MC curve intersects AFC at its minimum point. 
B) If MC is below AVC,AVC must be increasing. 
C) If MC is above ATC,ATC must be increasing. 
D) None of the above.

Question 18

The production function

Accepted Answer

A) shows the maximum level of output for a given set of inputs. 
B) is an economic relationship between revenue and cost. 
C) shows the relationship between input prices and amount of input used. 
D) always shows increasing marginal product of labor. 
A) shows the maximum level of output for a given set of inputs. 
B) is an economic relationship between revenue and cost. 
C) shows the relationship between input prices and amount of input used. 
D) always shows increasing marginal product of labor.

Question 19

-Refer to the above figure.The curve reflects

Accepted Answer

A) the law of diminishing marginal product in labor. 
B) the law of increasing marginal product in labor. 
C) the law of diminishing marginal product in capital. 
D) the law of increasing marginal product in capital. 
A) the law of diminishing marginal product in labor. 
B) the law of increasing marginal product in labor. 
C) the law of diminishing marginal product in capital. 
D) the law of increasing marginal product in capital.

Question 20

In economics,a fixed cost is a cost that

Accepted Answer

A) is present only in the short run. 
B) goes up as the level of output goes up. 
C) goes down as the level of output goes up. 
D) does not vary with the level of output. 
A) is present only in the short run. 
B) goes up as the level of output goes up. 
C) goes down as the level of output goes up. 
D) does not vary with the level of output.

Exam 9: The Firm: Cost and Output Determination

The change in total product occurring when a variable input is increased and all other inputs are held constant is

At Phil's Hot Dog Stand,we found the following: 4 laborers produced 66 hot dogs 5 laborers produced 76 hot dogs 6 laborers produced 84 hot dogs 7 laborers produced 88 hot dogs What was the marginal physical product of the sixth laborer?

If average total cost is decreasing as more and more units are produced,then marginal cost must be

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 -In the above table,the marginal cost of the ninth unit is

When marginal product is rising,

A firm has the following production relationship between labor and output,for a fixed capital stock. Labor Output 0 0 1 5 2 11 3 18 4 23 5 26 -According to the above table,at what usage of labor does diminishing marginal product begin?

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

For an industry in which average costs continue to decline as output rises,what would you expect the minimum efficient scale to be? Explain your answer.

Quantity of Total Labor Product 1 20 2 46 3 63 4 72 -Refer to the above table.What does the marginal product equal when the quantity of labor goes from 3 to 4?

If the marginal product of an input is falling,then

Q TFC TVC TC AFC AVC ATC 1 2 \ 75 \ 25 3 \ 40 -Refer to the above table.What are total variable costs at an output of 2 units?

Another term for the total quantity of output is

"The short-run average total cost curve and the long-run average cost curve are both U-shaped for the same reasons." Do you agree or disagree? Why?

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.When output rises from 2 units to 3 units,marginal costs are

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

The amount of calendar time associated with the long run

Which of the following is true?

The production function

-Refer to the above figure.The curve reflects

In economics,a fixed cost is a cost that

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