Question 1

In the short run, a firm

Accepted Answer

A)  has at least one fixed factor of production. 
B)  can enter an industry where positive profits are being earned. 
C)  can exit an industry, and all of its factors of production are variable. 
D)  both B and C are correct. 
A)  has at least one fixed factor of production. 
B)  can enter an industry where positive profits are being earned. 
C)  can exit an industry, and all of its factors of production are variable. 
D)  both B and C are correct.

Question 2

If the first worker produces five custom picture frames a day, and the second worker produces five additional custom picture frames a day, it is clear that diminishing marginal returns have not yet set in.

Accepted Answer

A) True 
 B)False

Question 3

At the Larson Bakery the marginal products of the first, second, and third sales clerks are 20, 17, and 11 customers served, respectively. The total product (number of customers served) of the three sales clerks is

Accepted Answer

A)  11. 
B)  40. 
C)  46. 
D)  48. 
A)  11. 
B)  40. 
C)  46. 
D)  48.

Question 4

A firm is operating such that the marginal product of labor is 10 and the marginal product of capital is 20. The firm is minimizing its costs only if

Accepted Answer

A)  the wage is half the rental rate. 
B)  the rental rate is half the wage. 
C)  since capital is more productive than labor, the firm must be minimizing cost. 
D)  Given this information the firm can't be minimizing cost under any circumstances. 
A)  the wage is half the rental rate. 
B)  the rental rate is half the wage. 
C)  since capital is more productive than labor, the firm must be minimizing cost. 
D)  Given this information the firm can't be minimizing cost under any circumstances.

In the short run, a firm

If the first worker produces five custom picture frames a day, and the second worker produces five additional custom picture frames a day, it is clear that diminishing marginal returns have not yet set in.

At the Larson Bakery the marginal products of the first, second, and third sales clerks are 20, 17, and 11 customers served, respectively. The total product (number of customers served) of the three sales clerks is

A firm is operating such that the marginal product of labor is 10 and the marginal product of capital is 20. The firm is minimizing its costs only if

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand, Supply, and Market Equilibrium

Demand and Supply Applications

Elasticity

Household Behavior and Consumer Choice

Short-Run Costs and Output Decisions

Long-Run Costs and Output Decisions

Input Demand: the Labor and Land Markets

Input Demand: the Capital Market and the Investment Decision

General Equilibrium and the Efficiency of Perfect Competition

Monopoly and Antitrust Policy

Oligopoly

Monopolistic Competition

Externalities, Public Goods, and Social Choice

Uncertainty and Asymmetric Information

Income Distribution and Poverty

Public Finance: The Economics of Taxation

International Trade, Comparative Advantage, and Protectionism

Economic Growth in Developing and Transitional Economies

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Exam 7: The Production Process: the Behavior of Profit-Maximizing Firms

In the short run, a firm

If the first worker produces five custom picture frames a day, and the second worker produces five additional custom picture frames a day, it is clear that diminishing marginal returns have not yet set in.

At the Larson Bakery the marginal products of the first, second, and third sales clerks are 20, 17, and 11 customers served, respectively. The total product (number of customers served) of the three sales clerks is

A firm is operating such that the marginal product of labor is 10 and the marginal product of capital is 20. The firm is minimizing its costs only if

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand, Supply, and Market Equilibrium

Demand and Supply Applications

Elasticity

Household Behavior and Consumer Choice

Short-Run Costs and Output Decisions

Long-Run Costs and Output Decisions

Input Demand: the Labor and Land Markets

Input Demand: the Capital Market and the Investment Decision

General Equilibrium and the Efficiency of Perfect Competition

Monopoly and Antitrust Policy

Oligopoly

Monopolistic Competition

Externalities, Public Goods, and Social Choice

Uncertainty and Asymmetric Information

Income Distribution and Poverty

Public Finance: The Economics of Taxation

International Trade, Comparative Advantage, and Protectionism

Economic Growth in Developing and Transitional Economies

Filters