Deck 11: Behind the Supply Curve: Inputs and Costs

Question 1

If two firms are identical in all respects except that one has more capital than another, the total product curve for the firm with more capital:

A)must equal the total product curve for the firm with less capital.
B)will lie above the total product curve for the firm with less capital.
C)will lie below the total product curve for the firm with less capital.
D)will show no diminishing marginal returns.

Answer 1

B

Question 2

Figure: The Marginal Product of Labor (Figure: The Marginal Product of Labor) Look at the figure The Marginal Product of Labor.The total product of labor for eight workers is:

A)40 bushels.
B)35 bushels.
C)96 bushels.
D)75 bushels.

Answer 2

C

Question 3

Figure: The Marginal Product of Labor (Figure: The Marginal Product of Labor) Look at the figure The Marginal Product of Labor.The total product of labor for five workers is:

A)11 bushels.
B)45 bushels.
C)55 bushels.
D)75 bushels.

Answer 3

D

Question 4

In economics, the short run is defined as:

A)less than 1 year.
B)less than 6 months.
C)period in which some inputs are considered to be fixed in quantity.
D)period in which some inputs are fixed, but it cannot exceed 1 year.

Question 5

In the long run:

A)all inputs are fixed.
B)inputs are neither variable nor fixed.
C)at least one input is variable and one input is fixed.
D)all inputs are variable.

Question 6

(Table: Labor and Output) Look at the table Labor and Output.The marginal product of the fourth worker is:

A)9.
B)36.
C)10.
D)6.

Question 7

The is the increase in output that is produced when hiring an additional worker.

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

Question 8

If two firms are identical in all respects except that one has more capital than another, the marginal product curve for the firm with more capital:

A)must equal the marginal product curve for the firm with less capital.
B)will lie above the marginal product curve for the firm with less capital.
C)will lie below the total marginal curve for the firm with less capital.
D)will show no diminishing marginal returns.

Question 9

A is an organization that produces goods or services for sale.

A)production function
B)firm
C)variable input
D)fixed input

Question 10

(Table: Labor and Output) Look at the table Labor and Output.The marginal product of the fifth worker is:

A)8.
B)4.
C)3.
D)40.

Question 11

In the short run:

A)all inputs are fixed.
B)all inputs are variable.
C)some inputs are fixed and some inputs are variable.
D)all costs are variable.

Question 12

In economics, the short run is:

A)less than 1 week.
B)less than 1 month.
C)enough time to vary output but not plant capacity.
D)enough time to change all inputs to production.

Question 13

(Figure: The Marginal Product of Labor) Look at the figure The Marginal Product of Labor.The total product for three workers is:

A)51 bushels.
B)45 bushels.
C)39 bushels.
D)15 bushels.

Question 14

An input whose quantity can be changed in the short run is:

A)a marginal input.
B)a fixed input.
C)an incremental input.
D)a variable input.

Question 15

The total product curve:

A)shows the relation between output and the quantity of a variable input for varying levels of the fixed input.
B)will become flatter as output increases if there are diminishing returns to the variable input.
C)will be downward sloping if there are diminishing returns to the variable input.
D)will become horizontal when the marginal product of the variable input is constant.

Question 16

An input whose quantity cannot be changed in the short run is:

A)a marginal input.
B)a fixed input.
C)an incremental input.
D)a variable input.

Question 17

The long run is a planning period:

A)over which a firm can consider all inputs as variable.
B)that is at least 5 years in length.
C)that must be over 6 months in length.
D)that must be between 6 months and 5 years.

Question 18

Diminishing returns to an input occur:

A)when all inputs are fixed.
B)when some inputs are fixed and some are variable.
C)when all inputs are variable.
D)only in the long run.

Question 19

The idea of diminishing returns to an input in production suggests that if a local college adds more custodians, the marginal product of labor for the custodial staff will _.

A)increase at an increasing
B)rate increase at a decreasing
C)rate decrease
D)not change

Question 20

A fixed input is one:

A)that exists in nature and there is only so much of it.
B)that can be used for one thing only.
C)that can never produce more or less in any period.
D)whose quantity cannot be changed in the short run.

Question 21

Figure: The Total Product
(Figure: The Total Product) Look at the figure The Total Product.After hiring L2 labor and producing at point B on the total product curve, hiring more labor beyond L2 would result in which of the following statements being true of the total product curve?

A)The marginal product of labor is rising.
B)The marginal product of labor is negative.
C)The total product is negative.
D)The total product is zero.

Question 22

Figure: The Total Product (Figure: The Total Product) Look at the figure The Total Product.For hiring labor between zero and L1, which of the following statements is true?

A)The marginal product of labor is increasing.
B)The marginal product of labor is decreasing.
C)The total product is increasing at a diminishing rate.
D)The total product is decreasing.

Question 23

Figure: The Total Product (Figure: The Total Product) Look at the figure The Total Product.When L2 labor is hired, the total product is at a ________and the marginal product of labor is _.

A)minimum; zero
B)maximum; zero
C)maximum; positive
D)minimum; falling but still positive

Question 24

Figure: The Total Product (Figure: The Total Product) Look at the figure The Total Product.As labor is hired between L1 and L2, the ________ is ________ and the ________ is _.

A)total product; rising; marginal product; positive
B)marginal product; zero; total product; falling .C.total product; rising; marginal product; negative .D.total product; rising; marginal product; zero

Question 25

The marginal product of labor is:

A)the change in labor divided by the change in total product.
B)the slope of the total product of labor curve.
C)the change in average product divided by the change in the quantity of labor.
D)the change in output that occurs when capital increases by one unit.

Question 26

Diminishing marginal returns occur when:

A)each additional unit of a variable factor adds more to total output than the previous unit.
B)an additional variable factor adds less to total output than the previous unit.
C)the marginal product of a variable factor is increasing but at a decreasing rate.
D)total product decreases.

Question 27

When Caroline's dress factory hires two workers, the total product is 50 dresses.When she hires three workers, total product is 48, and when she hires four workers, total product is 46.The marginal product of the third and fourth workers is

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

Question 28

When an additional unit of a variable input adds less to total product than the previous unit, the firm must be experiencing:

A)increasing returns.
B)diminishing marginal returns.
C)diminishing total returns.
D)diminishing marginal returns and diminishing total returns.

Question 29

Figure: The Unknown Curve (Figure: The Unknown Curve) Look at the figure The Unknown Curve.You are a cabinetmaker who employs several workers to produce kitchen and bathroom cabinets.Your summer intern has created a graph showing a relationship between the number of cabinetmakers you employ and the number of cabinets produced.Unfortunately, your intern has failed to identify this curve.It is likely to be the
________ curve:

A)total cost
B)total product
C)marginal product
D)total variable cost

Question 30

Figure: The Total Product (Figure: The Total Product) Look at the figure The Total Product.If after hiring L2 labor, the firm hires more labor, the total product will ________ because the marginal product of labor is _.

A)decrease; positive
B)increase; positive
C)decrease; negative
D)increase; negative

Question 31

When Caroline's dress factory hires two workers, the total product is 50 dresses.When she hires three workers, total product is 60, and when she hires four workers, total product is 75.The slope of the marginal product curve when two to four workers are hired is

A)upward sloping.
B)downward sloping.
C)vertical.
D)horizontal.

Question 32

A farm can produce 1,000 bushels of wheat per year with two workers and 1,300 bushels of wheat per year with three workers.The marginal product of the third worker is:

A)100 bushels.
B)300 bushels.
C)1,300 bushels.
D)2,300 bushels.

Question 33

You own a small deli that produces sandwiches, soups, and other items for customers in your town.Which of the following is a fixed input for the production function at your deli?

A)the dining room where customers eat their meals
B)the loaves of bread used to make sandwiches
C)the cans of tomato sauce used to make soups
D)the employees hired to help make the food

Question 34

When Caroline's dress factory hires two workers, the total product is 50 dresses.When she hires three workers, total product is 60, and when she hires four workers, total product is 65.The slope of the marginal product curve when two to four workers are hired is

A)upward sloping.
B)horizontal.
C)vertical.
D)downward sloping.

Question 35

You own a small deli that produces sandwiches, soups, and other items for customers in your town.Which of the following is a decision most likely to be made in the long run at your deli?

A)You order more breadsticks from the local bakery.
B)You ask your beverage distributor to deliver more soft drinks next week.
C)You renovate the second floor of your building to increase the size of the dining room.
D)You place a newspaper advertisement to attract part-time workers from the local college.

Question 36

A total product curve indicates the relationship between:

A)a variable input and price.
B)a variable input and variable cost.
C)a variable input and output.
D)output and price.

Question 37

A curve that shows the quantities of output that can be obtained from different quantities of a variable input, assuming other inputs are fixed, is called the curve.

A)total input
B)marginal input
C)total product
D)average total quantity

Question 38

Figure: The Total Product (Figure: The Total Product) Look at the figure The Total Product.Labor added L1 and up to L2 is:

A)subject to diminishing marginal returns.
B)adding increasing amounts to total product.
C)adding negative amounts to total product.
D)adding negative amounts to total product and are subject to diminishing marginal returns.

Question 39

(Total Product and Marginal Product) Look at the table Total Product and Marginal Product.The marginal product of the second worker is:

A)10.
B)15.
C)20.
D)30.

Question 40

Figure: The Total Product (Figure: The Total Product) Look at the figure The Total Product.Between points A and B the marginal product of labor is:

A)increasing.
B)zero.
C)falling.
D)infinite.

Question 41

The long run is a period that is:

A)long enough to vary the quantities of all factors of production.
B)long enough to vary all factors of production except for the amount of capital available.
C)more than one month.
D)at least one year.

Question 42

(Table: Production of Cabinets) Look at the table The Production of Cabinets.If each cabinetmaker could be hired at no cost, how many workers would your firm employ?

A)two
B)six
C)seven
D)eight

Question 43

Think about running a restaurant.For this restaurant:

A)cooks and hosts would be variable resources.
B)a building would be a variable resource in the short run.
C)cheese and other wholesale food items would be fixed resources in the short run.
D)valet parking staff would be fixed resources in the long run

Question 44

(Table: Production of Bagels) Look at the table Production of Bagels.The marginal product of the third worker is bagels.

A)9,000.
B)10,000.
C)12,000.
D)15,000.

Question 45

(Table: Production of Bagels) Look at the table Production of Bagels.Diminishing marginal returns begin with the addition of the worker.

A)third
B)fourth
C)fifth
D)sixth

Question 46

Suppose that the first four workers generate corresponding total outputs of baby diapers of 200, 350, 450, and 500, respectively.The marginal product of the second worker is:

A)50.
B)100.
C)150.
D)200.

Question 47

Assuming that all other factors of production are held constant, marginal product is the change in ________ output resulting from a one-unit change in _ .

A)total; a variable input
B)total; a fixed input
C)total; total product
D)per unit; a fixed input

Question 48

A factor of production whose quantity cannot be changed during the short run is:

A)a marginal factor of production.
B)a fixed factor of production.
C)an incremental factor of production.
D)a variable factor of production.

Question 49

Figure: Change in the Total Product (Figure: Change in the Total Product) Look at the figure Change in the Total Product.The figure shows a production function that moves from TP₁ to TP₂.Which of the following choices is a likely cause of this shift?

A)Workers in the firm are less productive on average.
B)The firm employed more of a variable input in the short run.
C)The firm has suffered a decrease in available technology.
D)The firm employed more of a fixed input in the long run.

Question 50

As defined in the text, the long run is a planning period:

A)in which a firm can adjust all resources.
B)that is at least 5 years in length.
C)during which the firm must experience an increase in sales in order to stay in business.
D)in which variable resources become fixed

Question 51

A factor of production whose quantity can be changed during the short run is:

A)a marginal factor of production.
B)a fixed factor of production.
C)an incremental factor of production.
D)a variable factor of production.

Question 52

A planning period during which all of a firm's resources are variable is the:

A)long run.
B)fixed run.
C)short run.
D)nominal run.

Question 53

(Table: Production of Bagels) Look at the table Production of Bagels.The marginal product of the fifth worker is bagels.

A)5,000.
B)9,000.
C)10,000.
D)12,000.

Question 54

Figure: Change in the Total Product
(Figure: Change in the Total Product) Look at the figure Change in the Total Product.The figure shows a production function that moves from TP₁ to TP₂.Based upon this change, what has happened to the marginal product of labor curve?

A)It has shifted upward and become flatter.
B)It has shifted downward and become steeper.
C)It has shifted upward and become steeper.
D)It has shifted downward and become flatter.

Question 55

A farm can produce 1,000 bushels of wheat per year with two workers and 1,300 bushels of wheat per year with four workers.The marginal product of the fourth worker is:

A)100 bushels.
B)300 bushels.
C)1,300 bushels.
D)150 bushels.

Question 56

Diminishing marginal returns means that:

A)each additional unit of an input used will decrease output.
B)each additional unit of an input used will increase output, but by smaller and smaller amounts.
C)each additional unit of an input used will increase output by larger and larger amounts.
D)the firm is maximizing profit.

Question 57

The marginal product of labor is the change in:

A)labor divided by the change in total product.
B)total output divided by the change in the quantity of labor.
C)average output divided by the change in the quantity of labor.
D)total costs divided by the change in the quantity of labor.

Question 58

(Table: Production of Cabinets) Look at the table The Production of Cabinets.The table shows how many cabinets your firm can make with different numbers of workers.After which worker does the firm begin to experience diminishing returns to labor?

A)first
B)second
C)third
D)fourth

Question 59

The marginal product of labor is all of the following except:

A)the change in output resulting from a one-unit change in labor.
B)the slope of the total product curve.
C)positive at some levels of input and possibly negative at others.D.total product divided by total labor.

Question 60

In the long run:

A)the firm has time to change the level of all inputs.
B)inputs are neither variable nor fixed.
C)at least one input is free.
D)all inputs are more expensive.

Question 61

The total cost curve is:

A)positively sloped.
B)negatively sloped.C.vertical.
D)horizontal.

Question 62

The fixed cost curve is:

A)positively sloped.
B)negatively sloped.C.vertical.
D)horizontal.

Question 63

For Heidi, the marginal cost of producing one additional photograph equals the change in ________ divided by the change in the _.

A)total cost; number of photographs
B)marginal cost; number of photographs
B)total cost; marginal product of photographs
C)average cost; number of photographs

Question 64

As output increases, the total cost curve

A)gets steeper.
B)gets flatter.
C)becomes horizontal.
D)increases at first, and then decreases.

Question 65

The long run refers to the period for which:

A)a fixed input exists.
B)all inputs are variable.
C)marginal costs are decreasing.
D)diminishing returns causes marginal cost to increase.

Question 66

Which of the following cost concepts is correctly defined?

A)MC = ∆TC / ∆FC
B)ATC = VC + FC
C)ATC = AVC + AFC
D)TC = AVC + AFC

Question 67

The change in total output resulting from a one-unit increase in the quantity of an input used, holding the quantities of all other inputs constant, is:

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

Question 68

The sum of fixed and variable costs is:

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

Question 69

(Table: Production Function for Soybeans) The table shows a production function for soybeans.Assume that the fixed input, capital, is 10 acres of land and a tractor, which have a combined cost of
$150 per day.The cost of labor is $100 per worker per day.The variable cost of producing 25 bushels of soybeans is:

A)$50
B)$100
C)$150
D)$250

Question 70

Austin's total fixed cost at the bakery is $3,600 a month.Austin employs 20 workers and pays each worker $8 an hour.The marginal product of the twentieth worker is 12 iced cupcakes an hour.What is the marginal cost of the last cupcake produced by the last worker Austin hired?

A)$0.26
B)$0.66
C)$3.81
D)$8

Question 71

(Table: Production Function for Soybeans) The table shows a production function for soybeans.Assume that the fixed input, capital, is 10 acres of land and a tractor, which have a combined cost of $150 per day.The cost of labor is $100 per worker per day.The variable cost of producing 60 bushels of soybeans is:

A)$5
B)$100
C)$150
D)$300

Question 72

When a cherry orchard in Oregon adds a worker, the total cost of production increases by $24,000.Adding the worker increases total cherry output by 600 pounds.Therefore, the marginal cost of the last pound of cherries produced is:

A)$40.
B)$19.
C)$4,000.
D)$24,000.

Question 73

The costs associated with variable inputs are ________ costs and the costs associated with ________ inputs are costs.

A)variable; fixed; fixed
B)fixed; fixed; variable
C)variable; fixed; variableD.fixed; fixed; fixed

Question 74

The total cost curve gets steeper as output increases because of

A)increasing returns to the variable input.
B)decreasing returns to the variable input.
C)increases in fixed cost.
D)decreases in overhead costs.

Question 75

Question 76

The total cost curve for a snowmobile dealership shows how cost depends on the quantity of ________.

A)total; fixed inputs
B)average; variable
C)total; output
D)marginal; output

Question 77

Marginal cost can be calculated as:

A)∆TC/∆Q, where TC is total cost and Q is output. BB.∆VC/∆Q, where VC is variable cost and Q is output.
C)the slope of the total cost curve.
D)∆TC/∆Q, where TC is total cost and Q is output; ∆VC/∆Q, where VC is variable cost and Q is output; and as the slope of the total cost curve.

Question 78

A fixed cost:

A)will exist only in the long run.
B)depends on the level of output.
C)can be positive, even if the firm doesn't produce any output in the short run.
D)decreases until the point of diminishing returns is reached.

Question 79

(Table: Total Cost Data) Look at the table Total Cost Data.The table shows cost data for a bicycle firm operating in the short run.What is the total variable cost for this firm when the firm produces five bicycles?

A)$50
B)$240
C)$60
D)$190

Question 80

(Table: Production Function for Soybeans) The table shows a production function for soybeans.Assume that the fixed input, capital, is 10 acres of land and a tractor, which have a combined cost of
$150 per day.The cost of labor is $100 per worker per day.The variable cost of producing 45 bushels of soybeans is:

A)$100
B)$200
C)$350
D)$4500