Question 1

The minimum possible short-run average costs are equal to long-run average costs when

Accepted Answer

A)  the plant is producing at its short-run minimum point. 
B)  short-run and long-run costs are declining. 
C)  the long-run curve is at a minimum point. 
D)  production is at any point on the LAC curve. 
A)  the plant is producing at its short-run minimum point. 
B)  short-run and long-run costs are declining. 
C)  the long-run curve is at a minimum point. 
D)  production is at any point on the LAC curve.

Question 2

-Refer to the above table. At what quantity of labor does it become obvious that the law of diminishing marginal product has set in?

Accepted Answer

A)  worker number 3 
B)  worker number 4 
C)  worker number 21 
D)  worker number 5 
A)  worker number 3 
B)  worker number 4 
C)  worker number 21 
D)  worker number 5

Question 3

When the minimum efficient scale occurs at a high level of industry output

Accepted Answer

A)  the firms in the industry will be producing in the diseconomies of scale portion of the curve. 
B)  there will only be a few firms in the industry. 
C)  the government will have to take over the production of the good since it will be unprofitable for firms. 
D)  there will be a lot of firms in this industry. 
A)  the firms in the industry will be producing in the diseconomies of scale portion of the curve. 
B)  there will only be a few firms in the industry. 
C)  the government will have to take over the production of the good since it will be unprofitable for firms. 
D)  there will be a lot of firms in this industry.

Question 4

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

Question 5

The long-run average cost curve

Accepted Answer

A)  is always a downward sloping straight line. 
B)  is a curve which is tangent to each member of a set of short-run average cost curves. 
C)  is identical to the marginal cost curve. 
D)  should always be horizontal. 
A)  is always a downward sloping straight line. 
B)  is a curve which is tangent to each member of a set of short-run average cost curves. 
C)  is identical to the marginal cost curve. 
D)  should always be horizontal.

Question 6

Mr.Hershey' company produces chocolate bars. Which is NOT a variable input for this firm?

Accepted Answer

A)  sugar 
B)  assembly line workers 
C)  the big chocolate-stirring machines 
D)  packaging materials 
A)  sugar 
B)  assembly line workers 
C)  the big chocolate-stirring machines 
D)  packaging materials

Question 7

-In the above table, the average product for 5 workers and the marginal product of the 5th worker is

Accepted Answer

A)  3.6; 2. 
B)  0.72; 1. 
C)  2; 0.6. 
D)  16; 2. 
A)  3.6; 2. 
B)  0.72; 1. 
C)  2; 0.6. 
D)  16; 2.

Question 8

-In the above table, when the firm employs 3 workers, the marginal product will be

Accepted Answer

A)  42 tablets. 
B)  30 tablets. 
C)  36.67 tablets. 
D)  208 tablets. 
A)  42 tablets. 
B)  30 tablets. 
C)  36.67 tablets. 
D)  208 tablets.

Question 9

All of the following are reasons for economies of scale EXCEPT

Accepted Answer

A)  diminishing marginal product. 
B)  specialization. 
C)  dimensional factors. 
D)  more efficient production equipment. 
A)  diminishing marginal product. 
B)  specialization. 
C)  dimensional factors. 
D)  more efficient production equipment.

Question 10

Describe the concept of the production function. What happens to the production function when a firm becomes less efficient, so that it now requires more labor to produce the same amount of output as before?

Accepted Answer

The production function is the maximum p

Question 11

-Refer to the above figure. Marginal costs are represented by curve

Accepted Answer

A)  1. 
B)  2. 
C)  3. 
D)  4. 
A)  1. 
B)  2. 
C)  3. 
D)  4.

Exam 22: The Firm: Cost and Output Determination

The minimum possible short-run average costs are equal to long-run average costs when

-Refer to the above table. At what quantity of labor does it become obvious that the law of diminishing marginal product has set in?

When the minimum efficient scale occurs at a high level of industry output

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

The long-run average cost curve

Mr.Hershey' company produces chocolate bars. Which is NOT a variable input for this firm?

-In the above table, the average product for 5 workers and the marginal product of the 5th worker is

-In the above table, when the firm employs 3 workers, the marginal product will be

All of the following are reasons for economies of scale EXCEPT

Describe the concept of the production function. What happens to the production function when a firm becomes less efficient, so that it now requires more labor to produce the same amount of output as before?

-Refer to the above figure. Marginal costs are represented by curve

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

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Money, Banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

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Consumer Choice

Rents, Profits, and the Financial Environment of Business

Perfect Competition

Monopoly

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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

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Environmental Economics

Comparative Advantage and the Open Economy

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