Question 1

Farmers in Canada grow about three times as much wheat per hectare as do farmers in Western Europe.

Accepted Answer

A) True 
 B)False

Question 2

In the long run,every input available to a manufacturer is a fixed input.

Accepted Answer

A) True 
 B)False

Question 3

In the short run,the average total cost curve slopes upward because of:

Accepted Answer

A)  economies of scale. 
B)  diseconomies of scale. 
C)  increasing returns. 
D)  diminishing returns. 
A)  economies of scale. 
B)  diseconomies of scale. 
C)  increasing returns. 
D)  diminishing returns.

Question 4

Use the following to answer questions :  
-(Figure: Short-Run Costs II)Use Figure: Short-Run Costs II.At 6 units of output,the marginal cost is approximately:

Accepted Answer

A)  $100. 
B)  $120. 
C)  $250. 
D)  $200. 
A)  $100. 
B)  $120. 
C)  $250. 
D)  $200.

Question 5

Use the following to answer questions :  
-In the long run,all costs are:

Accepted Answer

A)  fixed. 
B)  constant. 
C)  variable. 
D)  marginal. 
A)  fixed. 
B)  constant. 
C)  variable. 
D)  marginal.

Question 6

Austin's total fixed cost is $3 600 a month for making 100 000 cupcakes at his cupcake bakery.He employs 20 workers and pays each worker $600 a month.If labour is his only variable cost,what is Austin's total cost per month for making 100 000 cupcakes?

Accepted Answer

A)  $3 600 
B)  $1 200 
C)  $15 600 
D)  $12 000 
A)  $3 600 
B)  $1 200 
C)  $15 600 
D)  $12 000

Question 7

A firm's marginal cost is:

Accepted Answer

A)  the ratio of the change in total cost to the change in the quantity of output. 
B)  the change in total cost divided by the change in labour input. 
C)  the slope of the average fixed cost curve. 
D)  total cost divided by output. 
A)  the ratio of the change in total cost to the change in the quantity of output. 
B)  the change in total cost divided by the change in labour input. 
C)  the slope of the average fixed cost curve. 
D)  total cost divided by output.

Question 8

The _____ is the increase in output that is produced when a firm hires an additional worker.

Accepted Answer

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

Question 9

Use the following to answer questions : $$\begin{array}{l}
\text { Table: Cakes }\
\begin{array} { c c c } 
\hline \begin{array} { l } 
\text { Number of } \
\text { mixers }
\end{array} & \begin{array} { c } 
\text { Fixed } \
\text { Costs }
\end{array} & \begin{array} { c } 
\text { Average } \
\text { Variable Cost }
\end{array} \
\hline 1 & \$ 1,000 & \$ 10 \
2 & 1,500 & 7 \
3 & 2,500 & 4
\end{array}
\end{array}$$
-(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 2 mixers,her average total cost _____ in the range of output between 100 and 400 cakes.

Accepted Answer

A)  increases 
B)  decreases 
C)  remains the same 
D)  can't be calculated 
A)  increases 
B)  decreases 
C)  remains the same 
D)  can't be calculated

Question 10

A university that benefits from lower costs per enrolled student as it builds more buildings and enrolls more students is an example of a service provider with:

Accepted Answer

A)  economies of scale. 
B)  diseconomies of scale. 
C)  increasing opportunity costs. 
D)  scale reduction. 
A)  economies of scale. 
B)  diseconomies of scale. 
C)  increasing opportunity costs. 
D)  scale reduction.

Question 11

Once diminishing returns have set in,as output increases,the total cost curve:

Accepted Answer

A)  gets steeper. 
B)  gets flatter. 
C)  becomes horizontal. 
D)  increases at first,and then decreases. 
A)  gets steeper. 
B)  gets flatter. 
C)  becomes horizontal. 
D)  increases at first,and then decreases.

Question 12

The marginal cost curve intersects the average variable cost curve at:

Accepted Answer

A)  its lowest point. 
B)  its maximum. 
C)  its end point. 
D)  no point;the curves don't intersect. 
A)  its lowest point. 
B)  its maximum. 
C)  its end point. 
D)  no point;the curves don't intersect.

Question 13

The marginal product of labour is the:

Accepted Answer

A)  change in labour divided by the change in total product. 
B)  slope of the total product of the labour curve. 
C)  change in the average product divided by the change in the quantity of labour. 
D)  change in output that occurs when capital increases by one unit. 
A)  change in labour divided by the change in total product. 
B)  slope of the total product of the labour curve. 
C)  change in the average product divided by the change in the quantity of labour. 
D)  change in output that occurs when capital increases by one unit.

Question 14

If two firms are identical in all respects except that one has more of the fixed input capital than another,the total product curve for the firm with more capital:

Accepted Answer

A)  must equal the total product curve for the firm with less capital. 
B)  will lie above the total product curve for the firm with less capital. 
C)  will lie below the total product curve for the firm with less capital. 
D)  will show no diminishing marginal returns. 
A)  must equal the total product curve for the firm with less capital. 
B)  will lie above the total product curve for the firm with less capital. 
C)  will lie below the total product curve for the firm with less capital. 
D)  will show no diminishing marginal returns.

Question 15

The average total cost curve has a U shape because the _____ effect is dominant at low levels of output,and the _____ effect is dominant at high levels of output.

Accepted Answer

A)  diminishing returns;spreading 
B)  spreading;diminishing returns 
C)  comparative advantage;absolute advantage 
D)  absolute advantage;comparative advantage 
A)  diminishing returns;spreading 
B)  spreading;diminishing returns 
C)  comparative advantage;absolute advantage 
D)  absolute advantage;comparative advantage

Question 16

Use the following to answer questions : $\text {Table: Lindsay's Farm}$
$\text {The table provides information about the production}$
$\text { function for Lindsay's Farm, which uses labour and land}$
$\text { to produce its produce. The price of labour is $\$ 50$ per}$
 $\text {worker per week and the price of land is $\$ 20$ per hectare.}$
$\begin{array}{lcc}
\begin{array}{l}
\text { Quantity } \
\text { of Land } \
\text { (hectares) }
\end{array} & \begin{array}{c}
\text { Quantity } \
\text { of Labour } \
\text { (workers) }
\end{array} & \begin{array}{c}
\text { Quantity } \
\text { of Produce } \
\text { (bushels) }
\end{array} \
\hline 10 & 0 & 0 \
10 & 1 & 50 \
10 & 2 & 100 \
10 & 3 & 140 \
10 & 4 & 170 \
10 & 5 & 190
\end{array}$ 
-(Table: Lindsay's Farm)Use Table: Lindsay's Farm.Lindsay's fixed cost of production is:

Accepted Answer

A)  $200. 
B)  $450. 
C)  $2 500. 
D)  $2 700. 
A)  $200. 
B)  $450. 
C)  $2 500. 
D)  $2 700.

Question 17

Tankao makes earbuds for mobile devices.When Tankao produces 20 sets of earbuds,its average variable cost is $5 per set and its average total cost is $8 per set.Tankao's:

Accepted Answer

A)  marginal cost is less than $3 per set. 
B)  marginal cost is $3 per set. 
C)  average fixed cost is $3 per set. 
D)  marginal cost is equal to its average fixed cost. 
A)  marginal cost is less than $3 per set. 
B)  marginal cost is $3 per set. 
C)  average fixed cost is $3 per set. 
D)  marginal cost is equal to its average fixed cost.

Question 18

Average variable cost is:

Accepted Answer

A)  variable cost per unit multiplied by output. 
B)  total variable cost divided by output. 
C)  the difference between average total cost and total variable cost. 
D)  the difference between total cost and total variable cost. 
A)  variable cost per unit multiplied by output. 
B)  total variable cost divided by output. 
C)  the difference between average total cost and total variable cost. 
D)  the difference between total cost and total variable cost.

Question 19

Average total cost is the ratio of _____ cost to _____.

Accepted Answer

A)  total;marginal cost 
B)  total;the quantity of output 
C)  total;the amount of variable input 
D)  marginal;the amount of variable input 
A)  total;marginal cost 
B)  total;the quantity of output 
C)  total;the amount of variable input 
D)  marginal;the amount of variable input

Question 20

In the long run,some of a firm's costs are fixed,while others are variable.

Accepted Answer

A) True 
 B)False

Exam 11: Behind the Supply Curve- Inputs and Costs

Farmers in Canada grow about three times as much wheat per hectare as do farmers in Western Europe.

In the long run,every input available to a manufacturer is a fixed input.

In the short run,the average total cost curve slopes upward because of:

Use the following to answer questions : -(Figure: Short-Run Costs II)Use Figure: Short-Run Costs II.At 6 units of output,the marginal cost is approximately:

Use the following to answer questions : -In the long run,all costs are:

Austin's total fixed cost is $3 600 a month for making 100 000 cupcakes at his cupcake bakery.He employs 20 workers and pays each worker $600 a month.If labour is his only variable cost,what is Austin's total cost per month for making 100 000 cupcakes?

A firm's marginal cost is:

The _____ is the increase in output that is produced when a firm hires an additional worker.

A university that benefits from lower costs per enrolled student as it builds more buildings and enrolls more students is an example of a service provider with:

Once diminishing returns have set in,as output increases,the total cost curve:

The marginal cost curve intersects the average variable cost curve at:

The marginal product of labour is the:

If two firms are identical in all respects except that one has more of the fixed input capital than another,the total product curve for the firm with more capital:

The average total cost curve has a U shape because the _____ effect is dominant at low levels of output,and the _____ effect is dominant at high levels of output.

Tankao makes earbuds for mobile devices.When Tankao produces 20 sets of earbuds,its average variable cost is $5 per set and its average total cost is $8 per set.Tankao's:

Average variable cost is:

Average total cost is the ratio of _____ cost to _____.

In the long run,some of a firm's costs are fixed,while others are variable.

First Principles

Economic Models

Supply and Demand

Consumer and Producer Surplus

Price Controls and Quotas

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Uncertainty, risk, and Private Information

Graphs in Economics

Consumer Preferences

Indifference Curve Analysis

Filters

The average total cost curve has a U shape because the _ effect is dominant at low levels of output,and the _ effect is dominant at high levels of output.

Average total cost is the ratio of _ cost to _.