Question 1

When total product is increasing at an increasing rate, marginal product is

Accepted Answer

A)  positive and increasing. 
B)  positive and decreasing. 
C)  constant. 
D)  negative. 
A)  positive and increasing. 
B)  positive and decreasing. 
C)  constant. 
D)  negative.

Question 2

If a firm is experiencing diseconomies of scale, then

Accepted Answer

A)  proportional increases in all inputs result in proportional increases in output. 
B)  the long-run average cost curve is rising as output expands. 
C)  the long-run average cost curve is decreasing as output expands. 
D)  the firm should expand the size of its operation. 
A)  proportional increases in all inputs result in proportional increases in output. 
B)  the long-run average cost curve is rising as output expands. 
C)  the long-run average cost curve is decreasing as output expands. 
D)  the firm should expand the size of its operation.

Question 3

-Refer to the above figure. Minimum efficient scale is at output rate

Accepted Answer

A)  Q1. 
B)  Q2. 
C)  Q3. 
D)  Q5. 
A)  Q1. 
B)  Q2. 
C)  Q3. 
D)  Q5.

Question 4

-The production function illustrates the amount of total product that can be produced with a given set of

Accepted Answer

A)  inputs. 
B)  outputs. 
C)  marginal product. 
D)  marginal input. 
A)  inputs. 
B)  outputs. 
C)  marginal product. 
D)  marginal input.

Question 5

-Refer to the above figure. Economies of scale exist

Accepted Answer

A)  over the entire range of output. 
B)  from output Q2 to Q5. 
C)  up to output Q2. 
D)  after output Q5. 
A)  over the entire range of output. 
B)  from output Q2 to Q5. 
C)  up to output Q2. 
D)  after output Q5.

Question 6

"A firm cannot experience both economies of scale and diminishing marginal product." Do you agree or disagree? Why?

Accepted Answer

Disagree. Diminishing marginal product i

Question 7

What is the relationship between the marginal cost curve and marginal product? Explain.

Accepted Answer

The short-run cost curve is a reflection

Question 8

What is a production function?

Accepted Answer

Production is a process that transforms

Question 9

-In a map showing short-run cost functions, one curve begins at the origin and rises as output expands. It is called the

Accepted Answer

A)  the marginal cost curve. 
B)  the total fixed cost curve. 
C)  the total cost curve. 
D)  the total variable cost curve. 
A)  the marginal cost curve. 
B)  the total fixed cost curve. 
C)  the total cost curve. 
D)  the total variable cost curve.

Question 10

The point of saturation occurs when a firm

Accepted Answer

A)  has total returns equal to zero. 
B)  first encounters negative marginal product. 
C)  first experiences positive marginal product. 
D)  maximizes its total returns. 
A)  has total returns equal to zero. 
B)  first encounters negative marginal product. 
C)  first experiences positive marginal product. 
D)  maximizes its total returns.

Question 11

-In the above table, the average product of the 3rd worker is

Accepted Answer

A)  5. 
B)  4. 
C)  3. 
D)  12. 
A)  5. 
B)  4. 
C)  3. 
D)  12.

Question 12

The minimum efficient scale in the figure below shows that

Accepted Answer

A)  point A is the minimum efficient scale (MES) for the firm. 
B)  point B is the minimum efficient scale (MES) for the firm. 
C)  the long-run average cost curve (LA
C)  reaches a minimum point at B. 
D)  the minimum efficient scale (MES) illustrates maximum average costs. 
A)  point A is the minimum efficient scale (MES) for the firm. 
B)  point B is the minimum efficient scale (MES) for the firm. 
C)  the long-run average cost curve (LA
C)  reaches a minimum point at B. 
D)  the minimum efficient scale (MES) illustrates maximum average costs.

Question 13

The addition to total costs associated with the production of one more unit of output is referred to as

Accepted Answer

A)  average cost. 
B)  marginal cost. 
C)  opportunity cost. 
D)  overhead cost. 
A)  average cost. 
B)  marginal cost. 
C)  opportunity cost. 
D)  overhead cost.

Question 14

"In the short run, a firm cannot change any of its inputs." Do you agree or disagree? Explain.

Accepted Answer

Disagree. The short run is a p

Question 15

Minimum efficient scale

Accepted Answer

A)  is the point at which economies of scale begin for a particular firm. 
B)  is the lowest rate of output per unit of time at which long-run average costs reach a minimum for a particular firm. 
C)  applies only to firms with U-shaped long-run average cost curves. 
D)  is the point at which diseconomies of scale begin for a particular firm. 
A)  is the point at which economies of scale begin for a particular firm. 
B)  is the lowest rate of output per unit of time at which long-run average costs reach a minimum for a particular firm. 
C)  applies only to firms with U-shaped long-run average cost curves. 
D)  is the point at which diseconomies of scale begin for a particular firm.

Question 16

-In the above table, what is the marginal cost to produce the 2nd unit of output?

Accepted Answer

A)  $30 
B)  $60 
C)  $55 
D)  $20 
A)  $30 
B)  $60 
C)  $55 
D)  $20

Question 17

-Using the above table, the total product and average product when 5 workers are employed are

Accepted Answer

A)  61 and 21, respectively. 
B)  62 and 13, respectively. 
C)  62 and 15, respectively. 
D)  61 and 12.2, respectively. 
A)  61 and 21, respectively. 
B)  62 and 13, respectively. 
C)  62 and 15, respectively. 
D)  61 and 12.2, respectively.

Question 18

Suppose that one worker can produce 15 cookies, two workers can produce 35 cookies together, and three workers can produce 50 cookies together. What is the marginal product of the 3rd worker?

Accepted Answer

A)  20 cookies 
B)  15 cookies 
C)  50 cookies 
D)  35 cookies 
A)  20 cookies 
B)  15 cookies 
C)  50 cookies 
D)  35 cookies

Question 19

-Refer to the above figure. Constant returns to scale exist

Accepted Answer

A)  up to output Q2. 
B)  from Q2 to Q5. 
C)  after Q5. 
D)  over the entire long-run average cost curve. 
A)  up to output Q2. 
B)  from Q2 to Q5. 
C)  after Q5. 
D)  over the entire long-run average cost curve.

Question 20

The change in total costs due to a one-unit change in the production rate is

Accepted Answer

A)  total fixed cost. 
B)  total variable cost. 
C)  marginal cost. 
D)  average total cost. 
A)  total fixed cost. 
B)  total variable cost. 
C)  marginal cost. 
D)  average total cost.

Exam 22: The Firm: Cost and Output Determination

When total product is increasing at an increasing rate, marginal product is

If a firm is experiencing diseconomies of scale, then

-Refer to the above figure. Minimum efficient scale is at output rate

-The production function illustrates the amount of total product that can be produced with a given set of

-Refer to the above figure. Economies of scale exist

"A firm cannot experience both economies of scale and diminishing marginal product." Do you agree or disagree? Why?

What is the relationship between the marginal cost curve and marginal product? Explain.

What is a production function?

-In a map showing short-run cost functions, one curve begins at the origin and rises as output expands. It is called the

The point of saturation occurs when a firm

-In the above table, the average product of the 3rd worker is

The minimum efficient scale in the figure below shows that

The addition to total costs associated with the production of one more unit of output is referred to as

"In the short run, a firm cannot change any of its inputs." Do you agree or disagree? Explain.

Minimum efficient scale

-In the above table, what is the marginal cost to produce the 2nd unit of output?

-Using the above table, the total product and average product when 5 workers are employed are

Suppose that one worker can produce 15 cookies, two workers can produce 35 cookies together, and three workers can produce 50 cookies together. What is the marginal product of the 3rd worker?

-Refer to the above figure. Constant returns to scale exist

The change in total costs due to a one-unit change in the production rate is

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

The Macroeconomy: Unemployment, Inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, Banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

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