Question 1

If average product is increasing,then marginal product

Accepted Answer

A) must be greater than average product. 
B) must be less than average product. 
C) must be increasing. 
D) cannot be decreasing. 
E) both a and c 
A) must be greater than average product. 
B) must be less than average product. 
C) must be increasing. 
D) cannot be decreasing. 
E) both a and c

Question 2

Based on the following table,what is average variable cost when output is 200?

Accepted Answer

A) $2.00 
B) $12.00 
C) $10.50 
D) $240 
E) $210 
A) $2.00 
B) $12.00 
C) $10.50 
D) $240 
E) $210

Question 3

In the table below,the capital stock is fixed at 40 units,the price of capital is $15 per unit,and the price of labor is $80 per unit.   How much does the 50th unit of output add to the firm's total cost?

Accepted Answer

A) $6.67 
B) $10 
C) $400 
D) $600 
E) none of the above 
A) $6.67 
B) $10 
C) $400 
D) $600 
E) none of the above

Question 4

The capital stock is fixed at 5 units,the price of capital is $60 per unit,and the price of labor is $20 per unit.   Based on the above,if the firm produces 60 units of output,what is average variable cost?

Accepted Answer

A) $5 
B) $7.67 
C) $20 
D) $57.50 
E) $2.67 
A) $5 
B) $7.67 
C) $20 
D) $57.50 
E) $2.67

Question 5

out the table and answer the question below.   Diminishing returns begin with the

Accepted Answer

A) first unit of labor. 
B) third unit of labor. 
C) fourth unit of labor. 
D) sixth unit of labor. 
A) first unit of labor. 
B) third unit of labor. 
C) fourth unit of labor. 
D) sixth unit of labor.

Question 6

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 capital increases from 3 to 4 units,the marginal product of the fourth unit of labor

Accepted Answer

A) decreases by 3 units. 
B) increases by 8 units. 
C) increases by 5 units. 
D) decreases by 12 units. 
E) none of the above 
A) decreases by 3 units. 
B) increases by 8 units. 
C) increases by 5 units. 
D) decreases by 12 units. 
E) none of the above

Question 7

Given the table below,diminishing returns begin with the

Accepted Answer

A) 1st worker. 
B) 5th worker. 
C) 10th worker. 
D) 11th worker. 
E) 16th worker. 
A) 1st worker. 
B) 5th worker. 
C) 10th worker. 
D) 11th worker. 
E) 16th worker.

Question 8

Suppose that you run a house-painting company and currently have 2 workers painting a total of 4 houses per month.If you hire a third worker,6 houses can be painted per month.If you hire a fourth worker,9 houses can be painted,and a fifth and sixth worker will increase the number of houses painted to 13 and 15,respectively.Diminishing returns

Accepted Answer

A) set in when the fourth worker is hired. 
B) set in when the fifth worker is hired. 
C) set in when the sixth worker is hired. 
D) have not yet set in because output is still increasing. 
A) set in when the fourth worker is hired. 
B) set in when the fifth worker is hired. 
C) set in when the sixth worker is hired. 
D) have not yet set in because output is still increasing.

Question 9

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 120 units of labor,what is average total cost at this output?

Accepted Answer

A) $59 
B) $40 
C) $190 
D) $84 
E) $120 
A) $59 
B) $40 
C) $190 
D) $84 
E) $120

Question 10

In the figure above,the wage rate is $600 and total fixed cost is $15,000.What is average variable cost at its minimum?

Accepted Answer

A) $3.75 
B) $30 
C) $0.94 
D) $28 
E) $2.80 
A) $3.75 
B) $30 
C) $0.94 
D) $28 
E) $2.80

Question 11

A firm produces 4,000 units of output using 500 workers.Marginal cost is $10,the wage rate is $160,and total fixed cost is $100,000.What is the marginal product of labor?

Accepted Answer

A) $8 per worker 
B) 8 units of output per worker 
C) $16 per worker 
D) 16 units of output per worker 
E) none of the above 
A) $8 per worker 
B) 8 units of output per worker 
C) $16 per worker 
D) 16 units of output per worker 
E) none of the above

Question 12

A firm is currently producing 10 units of output; marginal cost is $24 and average total cost is $6 at this level of output.The average total cost at 9 units of output is:

Accepted Answer

A) $4 
B) $5 
C) $6 
D) $8 
E) none of the above 
A) $4 
B) $5 
C) $6 
D) $8 
E) none of the above

Question 13

If marginal product is decreasing,then it must be the case that

Accepted Answer

A) average product is decreasing. 
B) average product is greater than marginal product. 
C) average product is less than marginal product. 
D) both a and c 
E) none of the above. 
A) average product is decreasing. 
B) average product is greater than marginal product. 
C) average product is less than marginal product. 
D) both a and c 
E) none of the above.

Question 14

Suppose you run a pizza shop and currently have two employees.If you hire a third employee,your output of pizzas per day rises from 55 to 65.If you hire a fourth employee,output rises to 80 per day.A fifth and sixth employee would cause output to rise to 90 and 95 per day,respectively.Pick the correct statement:

Accepted Answer

A) Diminishing returns set in with the hiring of the fourth worker. 
B) Diminishing returns set in with the hiring of the fifth worker. 
C) Diminishing returns set in with the hiring of the sixth worker. 
D) Diminishing returns set have not yet set in because output is still increases. 
A) Diminishing returns set in with the hiring of the fourth worker. 
B) Diminishing returns set in with the hiring of the fifth worker. 
C) Diminishing returns set in with the hiring of the sixth worker. 
D) Diminishing returns set have not yet set in because output is still increases.

Question 15

Based on the following table,the additional cost of producing the 60th unit of output is:

Accepted Answer

A) $5 
B) $250 
C) $8 
D) $120 
E) $80 
A) $5 
B) $250 
C) $8 
D) $120 
E) $80

Question 16

The capital stock is fixed at 5 units,the price of capital is $60 per unit,and the price of labor is $20 per unit.   Based on the above,how much does the 12th unit of output add to the firm's total variable cost?

Accepted Answer

A) $2.50 
B) $4 
C) $5 
D) $20 
E) $40 
A) $2.50 
B) $4 
C) $5 
D) $20 
E) $40

Question 17

Average fixed cost

Accepted Answer

A) increases as output increases. 
B) decreases as output increases. 
C) increases if marginal cost is increasing. 
D) increases if marginal cost is greater than average fixed cost. 
A) increases as output increases. 
B) decreases as output increases. 
C) increases if marginal cost is increasing. 
D) increases if marginal cost is greater than average fixed cost.

Question 18

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).
Holding all else equal,we can conclude that,over those years,

Accepted Answer

A) Huffy's average variable cost decreased. 
B) Huffy's average variable cost increased. 
C) Huffy's marginal cost decreased. 
D) Huffy's marginal cost increased. 
E) both a and c 
A) Huffy's average variable cost decreased. 
B) Huffy's average variable cost increased. 
C) Huffy's marginal cost decreased. 
D) Huffy's marginal cost increased. 
E) both a and c

Question 19

short-run production function assumes that

Accepted Answer

A) the level of output is fixed. 
B) at least one input is a fixed input. 
C) all inputs are fixed inputs. 
D) both a and b 
E) both b and c 
A) the level of output is fixed. 
B) at least one input is a fixed input. 
C) all inputs are fixed inputs. 
D) both a and b 
E) both b and c

Question 20

Short-run average cost is

Accepted Answer

A) always greater than long-run average cost. 
B) always less than long-run average cost. 
C) less than short-run marginal cost when short-run marginal cost is decreasing. 
D) both a and c 
E) none of the above 
A) always greater than long-run average cost. 
B) always less than long-run average cost. 
C) less than short-run marginal cost when short-run marginal cost is decreasing. 
D) both a and c 
E) none of the above

If average product is increasing,then marginal product

Based on the following table,what is average variable cost when output is 200?

In the table below,the capital stock is fixed at 40 units,the price of capital is $15 per unit,and the price of labor is $80 per unit. How much does the 50th unit of output add to the firm's total cost?

The capital stock is fixed at 5 units,the price of capital is $60 per unit,and the price of labor is $20 per unit. Based on the above,if the firm produces 60 units of output,what is average variable cost?

out the table and answer the question below. Diminishing returns begin with the

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 capital increases from 3 to 4 units,the marginal product of the fourth unit of labor

Given the table below,diminishing returns begin with the

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 120 units of labor,what is average total cost at this output?

In the figure above,the wage rate is $600 and total fixed cost is $15,000.What is average variable cost at its minimum?

A firm produces 4,000 units of output using 500 workers.Marginal cost is $10,the wage rate is $160,and total fixed cost is $100,000.What is the marginal product of labor?

A firm is currently producing 10 units of output; marginal cost is $24 and average total cost is $6 at this level of output.The average total cost at 9 units of output is:

If marginal product is decreasing,then it must be the case that

Based on the following table,the additional cost of producing the 60th unit of output is:

The capital stock is fixed at 5 units,the price of capital is $60 per unit,and the price of labor is $20 per unit. Based on the above,how much does the 12th unit of output add to the firm's total variable cost?

Average fixed 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). Holding all else equal,we can conclude that,over those years,

short-run production function assumes that

Short-run average cost is

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 average product is increasing,then marginal product

Based on the following table,what is average variable cost when output is 200?

In the table below,the capital stock is fixed at 40 units,the price of capital is $15 per unit,and the price of labor is $80 per unit. How much does the 50th unit of output add to the firm's total cost?

The capital stock is fixed at 5 units,the price of capital is $60 per unit,and the price of labor is $20 per unit. Based on the above,if the firm produces 60 units of output,what is average variable cost?

out the table and answer the question below. Diminishing returns begin with the

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 capital increases from 3 to 4 units,the marginal product of the fourth unit of labor

Given the table below,diminishing returns begin with the

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 120 units of labor,what is average total cost at this output?

In the figure above,the wage rate is $600 and total fixed cost is $15,000.What is average variable cost at its minimum?

A firm produces 4,000 units of output using 500 workers.Marginal cost is $10,the wage rate is $160,and total fixed cost is $100,000.What is the marginal product of labor?

A firm is currently producing 10 units of output; marginal cost is $24 and average total cost is $6 at this level of output.The average total cost at 9 units of output is:

If marginal product is decreasing,then it must be the case that

Based on the following table,the additional cost of producing the 60th unit of output is:

The capital stock is fixed at 5 units,the price of capital is $60 per unit,and the price of labor is $20 per unit. Based on the above,how much does the 12th unit of output add to the firm's total variable cost?

Average fixed 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). Holding all else equal,we can conclude that,over those years,

short-run production function assumes that

Short-run average cost is

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