Question 1

-Refer to the above table. At what quantity of labor does the marginal cost curve start to increase?

Accepted Answer

A)  after 1 unit 
B)  after 2 units 
C)  after 3 units 
D)  after 6 units 
A)  after 1 unit 
B)  after 2 units 
C)  after 3 units 
D)  after 6 units

Question 2

-Using the above table, we see that when output is 4 units, average total cost equals

Accepted Answer

A)  $24.00. 
B)  $14.00. 
C)  $3.50. 
D)  $6.00. 
A)  $24.00. 
B)  $14.00. 
C)  $3.50. 
D)  $6.00.

Question 3

-At an output at which MC is greater than ATC

Accepted Answer

A)  the ATC curve is downward sloping. 
B)  the ATC curve is upward sloping. 
C)  the AFC curve is upward sloping. 
D)  the AVC curve is downward sloping. 
A)  the ATC curve is downward sloping. 
B)  the ATC curve is upward sloping. 
C)  the AFC curve is upward sloping. 
D)  the AVC curve is downward sloping.

Question 4

-If total costs are $50,000 when 1000 units are produced, and total costs are $50,100 when 1001 units are produced, we can conclude that

Accepted Answer

A)  average variable costs are $100. 
B)  average total costs are $100. 
C)  average fixed costs are $100. 
D)  marginal costs are $100. 
A)  average variable costs are $100. 
B)  average total costs are $100. 
C)  average fixed costs are $100. 
D)  marginal costs are $100.

Question 5

-In the above table, what is the average variable cost to produce 4 units of output?

Accepted Answer

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

Question 6

The lowest rate of output per unit of time at which long-run average costs for a particular firm are at a minimum is

Accepted Answer

A)  economies of scale. 
B)  diseconomies of scale. 
C)  constant returns of scale. 
D)  minimum efficient scale. 
A)  economies of scale. 
B)  diseconomies of scale. 
C)  constant returns of scale. 
D)  minimum efficient scale.

Question 7

Suppose the manager of a restaurant notices that when she has too many waiters on the floor for a shift that the waiters get in each other's way and fewer dinners are served. This is an example of

Accepted Answer

A)  diminishing marginal product. 
B)  diminishing marginal utility. 
C)  diminishing marginal workforce. 
D)  diminishing marginal inputs. 
A)  diminishing marginal product. 
B)  diminishing marginal utility. 
C)  diminishing marginal workforce. 
D)  diminishing marginal inputs.

Question 8

If the marginal product curve is intersecting the average product curve, we know that

Accepted Answer

A)  the average variable cost curve is intersecting the average total cost curve. 
B)  the marginal cost curve is intersecting the average fixed cost curve. 
C)  the average total cost curve lies above the marginal cost curve. 
D)  the marginal cost curve is intersecting the average total cost curve. 
A)  the average variable cost curve is intersecting the average total cost curve. 
B)  the marginal cost curve is intersecting the average fixed cost curve. 
C)  the average total cost curve lies above the marginal cost curve. 
D)  the marginal cost curve is intersecting the average total cost curve.

Question 9

For a wheat farmer in the middle of harvesting system, a fixed input would be

Accepted Answer

A)  workers hired. 
B)  combines rented. 
C)  the land that had been planted. 
D)  trucks rented to haul the wheat. 
A)  workers hired. 
B)  combines rented. 
C)  the land that had been planted. 
D)  trucks rented to haul the wheat.

Question 10

If the firm can vary all factors of production, it is operating

Accepted Answer

A)  at a profit. 
B)  at a zero economic profit. 
C)  in the short run. 
D)  in the long run. 
A)  at a profit. 
B)  at a zero economic profit. 
C)  in the short run. 
D)  in the long run.

Question 11

Due to extremely large fixed costs, an electricity generating plant probably experiences which of the following returns to size?

Accepted Answer

A)  diseconomies of scale 
B)  diminishing marginal product 
C)  constant returns to scale 
D)  economies of scale 
A)  diseconomies of scale 
B)  diminishing marginal product 
C)  constant returns to scale 
D)  economies of scale

Question 12

Phil found that as he continued to crowd laborers into his hot dog stand, the extra output he was receiving from each additional laborer was beginning to fall off. This is an example of the

Accepted Answer

A)  law of increasing opportunities. 
B)  law of demand. 
C)  law of diminishing marginal utility. 
D)  law of diminishing product. 
A)  law of increasing opportunities. 
B)  law of demand. 
C)  law of diminishing marginal utility. 
D)  law of diminishing product.

Question 13

-Refer to the above table. What does the marginal product equal when the quantity of labor goes from 1 to 2?

Accepted Answer

A)  46 
B)  23 
C)  26 
D)  92 
A)  46 
B)  23 
C)  26 
D)  92

Question 14

-In the above table, when output is 8 units, average total costs are

Accepted Answer

A)  $4.75. 
B)  $3.50. 
C)  $38. 
D)  $28. 
A)  $4.75. 
B)  $3.50. 
C)  $38. 
D)  $28.

Question 15

Total product will start to decrease

Accepted Answer

A)  at the quantity where the law of diminishing returns starts. 
B)  when average physical product decreases. 
C)  when marginal physical product increases. 
D)  when marginal physical product becomes negative. 
A)  at the quantity where the law of diminishing returns starts. 
B)  when average physical product decreases. 
C)  when marginal physical product increases. 
D)  when marginal physical product becomes negative.

Question 16

Which of the following is NOT a reason why a firm may experience economies of scale?

Accepted Answer

A)  productive specialization 
B)  dimensional factors 
C)  improved productive equipment 
D)  increased layers of management 
A)  productive specialization 
B)  dimensional factors 
C)  improved productive equipment 
D)  increased layers of management

Question 17

-Use the above figure. The TFC at output level 10 is

Accepted Answer

A)  $10. 
B)  $3. 
C)  $2. 
D)  $1. 
A)  $10. 
B)  $3. 
C)  $2. 
D)  $1.

Question 18

-Using the above table, the marginal product of the 4th worker is

Accepted Answer

A)  12. 
B)  13. 
C)  14. 
D)  15. 
A)  12. 
B)  13. 
C)  14. 
D)  15.

Question 19

In the short run, total costs equal

Accepted Answer

A)  the sum of total fixed costs and total variable costs. 
B)  the sum of total fixed costs and total explicit costs. 
C)  the sum of total variable costs and total implicit costs. 
D)  the sum of total fixed costs and total implicit costs. 
A)  the sum of total fixed costs and total variable costs. 
B)  the sum of total fixed costs and total explicit costs. 
C)  the sum of total variable costs and total implicit costs. 
D)  the sum of total fixed costs and total implicit costs.

Question 20

-Refer to the above table. What is AVC at an output of 2 units?

Accepted Answer

A)  $7 
B)  $16 
C)  $45 
D)  $61 
A)  $7 
B)  $16 
C)  $45 
D)  $61

Exam 22: The Firm: Cost and Output Determination

-Refer to the above table. At what quantity of labor does the marginal cost curve start to increase?

-Using the above table, we see that when output is 4 units, average total cost equals

-At an output at which MC is greater than ATC

-If total costs are $50,000 when 1000 units are produced, and total costs are $50,100 when 1001 units are produced, we can conclude that

-In the above table, what is the average variable cost to produce 4 units of output?

The lowest rate of output per unit of time at which long-run average costs for a particular firm are at a minimum is

Suppose the manager of a restaurant notices that when she has too many waiters on the floor for a shift that the waiters get in each other's way and fewer dinners are served. This is an example of

If the marginal product curve is intersecting the average product curve, we know that

For a wheat farmer in the middle of harvesting system, a fixed input would be

If the firm can vary all factors of production, it is operating

Due to extremely large fixed costs, an electricity generating plant probably experiences which of the following returns to size?

Phil found that as he continued to crowd laborers into his hot dog stand, the extra output he was receiving from each additional laborer was beginning to fall off. This is an example of the

-Refer to the above table. What does the marginal product equal when the quantity of labor goes from 1 to 2?

-In the above table, when output is 8 units, average total costs are

Total product will start to decrease

Which of the following is NOT a reason why a firm may experience economies of scale?

-Use the above figure. The TFC at output level 10 is

-Using the above table, the marginal product of the 4th worker is

In the short run, total costs equal

-Refer to the above table. What is AVC at an output of 2 units?

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

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