Question 1

If a firm is producing a given level of output in a technically efficient manner,then it must be the case that

Accepted Answer

A) this is the lowest cost method of producing that output. 
B) each input is producing its maximum marginal product. 
C) this output level is the most that can be produced with the given levels of inputs. 
D) both a and c 
E) all of the above 
A) this is the lowest cost method of producing that output. 
B) each input is producing its maximum marginal product. 
C) this output level is the most that can be produced with the given levels of inputs. 
D) both a and c 
E) all of the above C

Question 2

In the table above,diminishing returns

Accepted Answer

A) begin with the first unit of labor. 
B) begin with the third unit of labor. 
C) begin with the fourth unit of labor. 
D) begin with the fifth unit of labor. 
E) do not occur because output is positive for all levels of labor usage. 
A) begin with the first unit of labor. 
B) begin with the third unit of labor. 
C) begin with the fourth unit of labor. 
D) begin with the fifth unit of labor. 
E) do not occur because output is positive for all levels of labor usage. B

Question 3

Given the table below,how much does the 13th worker add to total output?

Accepted Answer

A) 28 units 
B) 29 units 
C) 130 units 
D) 420 units 
E) none of the above 
A) 28 units 
B) 29 units 
C) 130 units 
D) 420 units 
E) none of the above E

Question 4

In the table above,what is the marginal product of the fifth unit of labor?

Accepted Answer

A) 20 
B) 50 
C) 80 
D) -10 
E) -30 
A) 20 
B) 50 
C) 80 
D) -10 
E) -30

Question 5

Above is a firm's average product of labor and marginal product of labor curves.The price of labor is $60 per unit.Given this,diminishing returns set in with the

Accepted Answer

A) 3rd unit of labor. 
B) 6th unit of labor. 
C) 10th unit of labor. 
D) 12th unit of labor. 
E) 14th unit of labor. 
A) 3rd unit of labor. 
B) 6th unit of labor. 
C) 10th unit of labor. 
D) 12th unit of labor. 
E) 14th unit of labor.

Question 6

The capital stock is fixed at 50 units,the price of capital is $30 per unit,and the price of labor is $25 per unit.   Given the above,if the firm produces 40 units of output,what is total variable cost?

Accepted Answer

A) $1.50 
B) $60 
C) $100 
D) $2,400 
E) none of the above 
A) $1.50 
B) $60 
C) $100 
D) $2,400 
E) none of the above

Question 7

To answer,refer to the following: "At Huffy's ...bicycle factory,1,700 employees turn out 15,000 bicycles a day in 1987).Five years before,it required 2,200 workers to make 10,000 bikes daily." The Wall Street Journal).
In 1987,

Accepted Answer

A) total product was 15,000 bicycles per day. 
B) the average product of labor was 0.11. 
C) the marginal product of labor was 8.8. 
D) both a and b 
E) both a and c 
A) total product was 15,000 bicycles per day. 
B) the average product of labor was 0.11. 
C) the marginal product of labor was 8.8. 
D) both a and b 
E) both a and c

Question 8

Use the following table to answer the question below: The amount of total output produced from various combinations of labor and capital.
  Diminishing marginal productivity

Accepted Answer

A) occurs when the marginal product curve begins to slope downward. 
B) means that adding one more unit of the variable input will reduce total product. 
C) occurs eventually because each additional unit of the variable unit has,on average,fewer units of the fixed input with which to work. 
D) both a and c 
E) both b and c 
A) occurs when the marginal product curve begins to slope downward. 
B) means that adding one more unit of the variable input will reduce total product. 
C) occurs eventually because each additional unit of the variable unit has,on average,fewer units of the fixed input with which to work. 
D) both a and c 
E) both b and c

Question 9

Given the table below,what is the total fixed cost when 400 units of output are produced?

Accepted Answer

A) $500 
B) $2000 
C) $3500 
D) $5000 
E) none of the above 
A) $500 
B) $2000 
C) $3500 
D) $5000 
E) none of the above

Question 10

Use the following table to answer the question below: The amount of total output produced from various combinations of labor and capital.
  If the amount of labor used increases from three to four units,the marginal product of the second unit of capital

Accepted Answer

A) increases by 8 units. 
B) increases by 49 units. 
C) decreases by 14 units. 
D) decreases by 49 units. 
E) none of the above 
A) increases by 8 units. 
B) increases by 49 units. 
C) decreases by 14 units. 
D) decreases by 49 units. 
E) none of the above

Question 11

A fixed cost is

Accepted Answer

A) the cost of any input with a fixed price per unit. 
B) a cost which increases in a fixed proportion as output increases. 
C) a cost the firm must pay even if output is zero. 
D) both b and c 
E) all of the above 
A) the cost of any input with a fixed price per unit. 
B) a cost which increases in a fixed proportion as output increases. 
C) a cost the firm must pay even if output is zero. 
D) both b and c 
E) all of the above

Question 12

Suppose that the firm's only variable input is labor.When 50 workers are used,the average product of labor is 50 and the marginal product of labor is 75.The wage rate is $80 and the total cost of the fixed input is $500.What is average total cost?

Accepted Answer

A) $0.825 
B) $0.63 
C) $1.80 
D) $4.10 
E) none of the above 
A) $0.825 
B) $0.63 
C) $1.80 
D) $4.10 
E) none of the above

Question 13

Suppose that the firm's only variable input is labor.When 50 workers are used,the average product of labor is 50 and the marginal product of labor is 75.The wage rate is $80 and the total cost of the fixed input is $500.Suppose that installation of a new assembly line increases the output produced per worker.The cost per unit of output

Accepted Answer

A) will increase. 
B) will decrease. 
C) will be unchanged. 
D) is at its maximum. 
E) is at its minimum 
A) will increase. 
B) will decrease. 
C) will be unchanged. 
D) is at its maximum. 
E) is at its minimum

Question 14

The capital stock is fixed at 50 units,the price of capital is $30 per unit,and the price of labor is $25 per unit.   Given the above,if the firm produces 30 units of output,how many units of labor does the firm use?

Accepted Answer

A) 30 
B) 45 
C) 54 
D) 60 
E) none of the above 
A) 30 
B) 45 
C) 54 
D) 60 
E) none of the above

Question 15

In the above figure,what is the AVERAGE variable cost of producing 5 units of output?

Accepted Answer

A) $12 
B) $20 
C) $40 
D) $60 
E) $80 
A) $12 
B) $20 
C) $40 
D) $60 
E) $80

Question 16

The following graph shows the marginal and average product curves for labor,the firm's only variable input.The monthly wage for labor is $2,800.Fixed cost is $160,000.   When the firm uses 40 units of labor,what is AVC at this level of output?

Accepted Answer

A) $120 
B) $400 
C) $40 
D) $70 
E) $86 
A) $120 
B) $400 
C) $40 
D) $70 
E) $86

Question 17

For a short-run production function in which output is determined by the number of workers utilized capital stock held constant),which of the following is FALSE?

Accepted Answer

A) In general,when there are few workers the marginal product of labor will be increasing. 
B) When the marginal product of labor is negative,total product is falling. 
C) To determine the marginal product of labor,the capital stock must be held constant. 
D) When diminishing returns set in,adding one more worker decreases output. 
E) none of the above 
A) In general,when there are few workers the marginal product of labor will be increasing. 
B) When the marginal product of labor is negative,total product is falling. 
C) To determine the marginal product of labor,the capital stock must be held constant. 
D) When diminishing returns set in,adding one more worker decreases output. 
E) none of the above

Question 18

A firm is using a single variable input,labor,with a given amount of a fixed input,capital.If the level of capital is decreased,

Accepted Answer

A) the total product curve of labor curve shifts downward. 
B) the average product curve of labor curve shifts downward. 
C) the marginal product curve of labor shifts downward. 
D) all of the above 
E) none of the above 
A) the total product curve of labor curve shifts downward. 
B) the average product curve of labor curve shifts downward. 
C) the marginal product curve of labor shifts downward. 
D) all of the above 
E) none of the above

Question 19

Given the table below,if labor is fixed at three units,how much does the third unit of capital add to total output?   Amount of total output produced from various combinations of labor and capital.

Accepted Answer

A) 60 
B) 80 
C) 110 
D) 130 
E) none of the above 
A) 60 
B) 80 
C) 110 
D) 130 
E) none of the above

Question 20

In the figure above,the wage rate is $600 and total fixed cost is $15,000.When there are 40 workers,what is average variable cost?

Accepted Answer

A) $0.23 
B) $5.00 
C) $4.10 
D) $6.00 
E) $12.00 
A) $0.23 
B) $5.00 
C) $4.10 
D) $6.00 
E) $12.00

If a firm is producing a given level of output in a technically efficient manner,then it must be the case that

In the table above,diminishing returns

Given the table below,how much does the 13th worker add to total output?

In the table above,what is the marginal product of the fifth unit of labor?

Above is a firm's average product of labor and marginal product of labor curves.The price of labor is $60 per unit.Given this,diminishing returns set in with the

The capital stock is fixed at 50 units,the price of capital is $30 per unit,and the price of labor is $25 per unit. Given the above,if the firm produces 40 units of output,what is total variable cost?

To answer,refer to the following: "At Huffy's ...bicycle factory,1,700 employees turn out 15,000 bicycles a day in 1987).Five years before,it required 2,200 workers to make 10,000 bikes daily." The Wall Street Journal). In 1987,

Use the following table to answer the question below: The amount of total output produced from various combinations of labor and capital. Diminishing marginal productivity

Given the table below,what is the total fixed cost when 400 units of output are produced?

Use the following table to answer the question below: The amount of total output produced from various combinations of labor and capital. If the amount of labor used increases from three to four units,the marginal product of the second unit of capital

A fixed cost is

Suppose that the firm's only variable input is labor.When 50 workers are used,the average product of labor is 50 and the marginal product of labor is 75.The wage rate is $80 and the total cost of the fixed input is $500.What is average total cost?

The capital stock is fixed at 50 units,the price of capital is $30 per unit,and the price of labor is $25 per unit. Given the above,if the firm produces 30 units of output,how many units of labor does the firm use?

In the above figure,what is the AVERAGE variable cost of producing 5 units of output?

The following graph shows the marginal and average product curves for labor,the firm's only variable input.The monthly wage for labor is $2,800.Fixed cost is $160,000. When the firm uses 40 units of labor,what is AVC at this level of output?

For a short-run production function in which output is determined by the number of workers utilized capital stock held constant),which of the following is FALSE?

A firm is using a single variable input,labor,with a given amount of a fixed input,capital.If the level of capital is decreased,

Given the table below,if labor is fixed at three units,how much does the third unit of capital add to total output? Amount of total output produced from various combinations of labor and capital.

In the figure above,the wage rate is $600 and total fixed cost is $15,000.When there are 40 workers,what is average variable cost?

Managers, profits, and Markets

Demand, supply, and Market Equilibrium

Marginal Analysis for Optimal Decision Making

Basic Estimation Techniques

Theory of Consumer Behavior

Elasticity and Demand

Demand Estimation and Forecasting

Production and Cost in the Long Run

Production and Cost Estimation

Managerial Decisions in Competitive Markets

Managerial Decisions for Firms With Market Power

Strategic Decision Making in Oligopoly Markets

Advanced Pricing Techniques

Decisions Under Risk and Uncertainty

Government Regulation of Business

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Exam 8: Production and Cost in the Short Run

If a firm is producing a given level of output in a technically efficient manner,then it must be the case that

In the table above,diminishing returns

Given the table below,how much does the 13th worker add to total output?

In the table above,what is the marginal product of the fifth unit of labor?

Above is a firm's average product of labor and marginal product of labor curves.The price of labor is $60 per unit.Given this,diminishing returns set in with the

The capital stock is fixed at 50 units,the price of capital is $30 per unit,and the price of labor is $25 per unit. Given the above,if the firm produces 40 units of output,what is total variable cost?

To answer,refer to the following: "At Huffy's ...bicycle factory,1,700 employees turn out 15,000 bicycles a day in 1987).Five years before,it required 2,200 workers to make 10,000 bikes daily." The Wall Street Journal). In 1987,

Use the following table to answer the question below: The amount of total output produced from various combinations of labor and capital. Diminishing marginal productivity

Given the table below,what is the total fixed cost when 400 units of output are produced?

Use the following table to answer the question below: The amount of total output produced from various combinations of labor and capital. If the amount of labor used increases from three to four units,the marginal product of the second unit of capital

A fixed cost is

Suppose that the firm's only variable input is labor.When 50 workers are used,the average product of labor is 50 and the marginal product of labor is 75.The wage rate is $80 and the total cost of the fixed input is $500.What is average total cost?

The capital stock is fixed at 50 units,the price of capital is $30 per unit,and the price of labor is $25 per unit. Given the above,if the firm produces 30 units of output,how many units of labor does the firm use?

In the above figure,what is the AVERAGE variable cost of producing 5 units of output?

The following graph shows the marginal and average product curves for labor,the firm's only variable input.The monthly wage for labor is $2,800.Fixed cost is $160,000. When the firm uses 40 units of labor,what is AVC at this level of output?

For a short-run production function in which output is determined by the number of workers utilized capital stock held constant),which of the following is FALSE?

A firm is using a single variable input,labor,with a given amount of a fixed input,capital.If the level of capital is decreased,

Given the table below,if labor is fixed at three units,how much does the third unit of capital add to total output? Amount of total output produced from various combinations of labor and capital.

In the figure above,the wage rate is $600 and total fixed cost is $15,000.When there are 40 workers,what is average variable cost?

Managers, profits, and Markets

Demand, supply, and Market Equilibrium

Marginal Analysis for Optimal Decision Making

Basic Estimation Techniques

Theory of Consumer Behavior

Elasticity and Demand

Demand Estimation and Forecasting

Production and Cost in the Long Run

Production and Cost Estimation

Managerial Decisions in Competitive Markets

Managerial Decisions for Firms With Market Power

Strategic Decision Making in Oligopoly Markets

Advanced Pricing Techniques

Decisions Under Risk and Uncertainty

Government Regulation of Business

Filters