Question 1

(Table: Tonya's Production Function for Apples)Use Table: Tonya's Production Function for Apples.Tonya is operating:

Accepted Answer

A) in the long run. 
B) in the short run. 
C) in a very expensive location. 
D) at a loss. 
A) in the long run. 
B) in the short run. 
C) in a very expensive location. 
D) at a loss.

Question 2

You own a deli.Which input of production is MOST likely fixed at your deli?

Accepted Answer

A) the dining room 
B) the bread used to make sandwiches 
C) the tomato sauce used to make soups 
D) the employees 
A) the dining room 
B) the bread used to make sandwiches 
C) the tomato sauce used to make soups 
D) the employees

Question 3

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 _____ bushels.

Accepted Answer

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

Question 4

In the short run,as output gets larger:

Accepted Answer

A) fixed cost gets smaller. 
B) the average variable cost curve gets closer to the average total cost curve. 
C) marginal cost gets smaller. 
D) average total cost decreases after the point of diminishing returns. 
A) fixed cost gets smaller. 
B) the average variable cost curve gets closer to the average total cost curve. 
C) marginal cost gets smaller. 
D) average total cost decreases after the point of diminishing returns.

Question 5

Use the following to answer question:  
-(Figure: The Total Product)Use Figure: The Total Product.After hiring L2 labor and producing at point B on the total product curve,hiring more labor beyond L2 would cause the:

Accepted Answer

A) marginal product of labor to rise. 
B) marginal product of labor to be negative. 
C) total product to be negative. 
D) total product to be zero. 
A) marginal product of labor to rise. 
B) marginal product of labor to be negative. 
C) total product to be negative. 
D) total product to be zero.

Question 6

If marginal cost is LESS than average total cost,then _____ cost is _____.

Accepted Answer

A) average total;increasing 
B) average total;decreasing 
C) marginal;necessarily increasing 
D) marginal;necessarily decreasing 
A) average total;increasing 
B) average total;decreasing 
C) marginal;necessarily increasing 
D) marginal;necessarily decreasing

Question 7

Use the following to answer question:  
-(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 1 mixer and bakes 200 cakes per day,what is her average total cost?

Accepted Answer

A) $5 
B) $15 
C) $200 
D) $1,000 
A) $5 
B) $15 
C) $200 
D) $1,000

Question 8

If the average total cost curve and the average variable cost curve are both U-shaped,and fixed costs are nonzero,then the minimum point of the average total cost curve must lie above the minimum point of the average variable cost curve.

Accepted Answer

A) True 
 B)False

Question 9

The long-run average cost curve is tangent to a series of short-run average total cost curves.

Accepted Answer

A) True 
 B)False

Question 10

Marginal cost CANNOT be calculated as:

Accepted Answer

A) $\Delta$TC/$\Delta$Q,where TC is total cost and Q is output. 
B) $\Delta$VC/$\Delta$Q,where VC is variable cost and Q is output. 
C) the slope of the total cost curve. 
D) $\Delta$ATC * $\Delta$Q,where ATC is average total cost and Q is output. 
A) $\Delta$TC/$\Delta$Q,where TC is total cost and Q is output. 
B) $\Delta$VC/$\Delta$Q,where VC is variable cost and Q is output. 
C) the slope of the total cost curve. 
D) $\Delta$ATC * $\Delta$Q,where ATC is average total cost and Q is output.

Question 11

Use the following to answer question:  
-(Table: Costs of Birthday Cakes)Use Table: Costs of Birthday Cakes.Assume that fixed costs are $10.What is the average variable cost of 5 cakes?

Accepted Answer

A) $300 
B) $250 
C) $50 
D) $10 
A) $300 
B) $250 
C) $50 
D) $10

Question 12

Use the following to answer question:  
-(Figure and Table: Variable,Fixed,and Total Costs)Use Figure and Table: Variable,Fixed,and Total Costs.The marginal cost of increasing production from 84 to 91 bushels of wheat is:

Accepted Answer

A) $13.00. 
B) $19.78. 
C) $22.22. 
D) $28.57. 
A) $13.00. 
B) $19.78. 
C) $22.22. 
D) $28.57.

Question 13

Use the following to answer question:  
-(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 1 mixer and bakes 100 cakes per day,what is her average total cost?

Accepted Answer

A) $1,010 
B) $20 
C) $15 
D) $10 
A) $1,010 
B) $20 
C) $15 
D) $10

Question 14

In the short run,the average total cost curve reaches its minimum point at a lower level of output than the short-run marginal cost curve reaches its minimum.

Accepted Answer

A) True 
 B)False

Question 15

In the short run,and with nonzero fixed costs,the average total cost curve always lies above the average variable cost curve.

Accepted Answer

A) True 
 B)False

Question 16

Diminishing marginal returns occur when:

Accepted Answer

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

Question 17

The long-run average total cost of producing 100 units of output is $4,while the long-run average cost of producing 110 units of output is $4.These numbers suggest that between 100 and 110 units of output,the firm producing this output has:

Accepted Answer

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

Question 18

Use the following to answer question:  
-(Figure and Table: Variable,Fixed,and Total Costs)Use Figure and Table: Variable,Fixed,and Total Costs.The marginal cost of increasing production from 19 to 36 bushels of wheat is:

Accepted Answer

A) $23.53. 
B) $11.76. 
C) $22.22. 
D) $11.11. 
A) $23.53. 
B) $11.76. 
C) $22.22. 
D) $11.11.

Question 19

The larger the output,the more variable input required to produce additional units.Called the _____ effect,this leads to a _____ average _____ cost as output rises.

Accepted Answer

A) spreading;lower;fixed 
B) spreading;higher;fixed 
C) diminishing returns;lower;variable 
D) diminishing returns;higher;variable 
A) spreading;lower;fixed 
B) spreading;higher;fixed 
C) diminishing returns;lower;variable 
D) diminishing returns;higher;variable

Question 20

In economics,the short run is:

Accepted Answer

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. 
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.

(Table: Tonya's Production Function for Apples)Use Table: Tonya's Production Function for Apples.Tonya is operating:

You own a deli.Which input of production is MOST likely fixed at your deli?

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 _____ bushels.

In the short run,as output gets larger:

Use the following to answer question: -(Figure: The Total Product)Use Figure: The Total Product.After hiring L₂ labor and producing at point B on the total product curve,hiring more labor beyond L₂ would cause the:

If marginal cost is LESS than average total cost,then _ cost is _.

If the average total cost curve and the average variable cost curve are both U-shaped,and fixed costs are nonzero,then the minimum point of the average total cost curve must lie above the minimum point of the average variable cost curve.

The long-run average cost curve is tangent to a series of short-run average total cost curves.

Marginal cost CANNOT be calculated as:

Use the following to answer question: -(Table: Costs of Birthday Cakes)Use Table: Costs of Birthday Cakes.Assume that fixed costs are $10.What is the average variable cost of 5 cakes?

Use the following to answer question: -(Figure and Table: Variable,Fixed,and Total Costs)Use Figure and Table: Variable,Fixed,and Total Costs.The marginal cost of increasing production from 84 to 91 bushels of wheat is:

In the short run,the average total cost curve reaches its minimum point at a lower level of output than the short-run marginal cost curve reaches its minimum.

In the short run,and with nonzero fixed costs,the average total cost curve always lies above the average variable cost curve.

Diminishing marginal returns occur when:

The long-run average total cost of producing 100 units of output is $4,while the long-run average cost of producing 110 units of output is $4.These numbers suggest that between 100 and 110 units of output,the firm producing this output has:

Use the following to answer question: -(Figure and Table: Variable,Fixed,and Total Costs)Use Figure and Table: Variable,Fixed,and Total Costs.The marginal cost of increasing production from 19 to 36 bushels of wheat is:

The larger the output,the more variable input required to produce additional units.Called the ___ effect,this leads to a _ average ___ cost as output rises.

In economics,the short run is:

First Principles

Economic Models: Trade-Offs and Trade

Consumer and Producer Surplus

Supply and Demand

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Graphs in Economics

Consumer Preferences and Consumer Choice

Filters

Exam 11: Behind the Supply Curve: Inputs and Costs

(Table: Tonya's Production Function for Apples)Use Table: Tonya's Production Function for Apples.Tonya is operating:

You own a deli.Which input of production is MOST likely fixed at your deli?

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 _____ bushels.

In the short run,as output gets larger:

Use the following to answer question: -(Figure: The Total Product)Use Figure: The Total Product.After hiring L2 labor and producing at point B on the total product curve,hiring more labor beyond L2 would cause the:

If marginal cost is LESS than average total cost,then _____ cost is _____.

If the average total cost curve and the average variable cost curve are both U-shaped,and fixed costs are nonzero,then the minimum point of the average total cost curve must lie above the minimum point of the average variable cost curve.

The long-run average cost curve is tangent to a series of short-run average total cost curves.

Marginal cost CANNOT be calculated as:

Use the following to answer question: -(Table: Costs of Birthday Cakes)Use Table: Costs of Birthday Cakes.Assume that fixed costs are $10.What is the average variable cost of 5 cakes?

Use the following to answer question: -(Figure and Table: Variable,Fixed,and Total Costs)Use Figure and Table: Variable,Fixed,and Total Costs.The marginal cost of increasing production from 84 to 91 bushels of wheat is:

In the short run,the average total cost curve reaches its minimum point at a lower level of output than the short-run marginal cost curve reaches its minimum.

In the short run,and with nonzero fixed costs,the average total cost curve always lies above the average variable cost curve.

Diminishing marginal returns occur when:

The long-run average total cost of producing 100 units of output is $4,while the long-run average cost of producing 110 units of output is $4.These numbers suggest that between 100 and 110 units of output,the firm producing this output has:

Use the following to answer question: -(Figure and Table: Variable,Fixed,and Total Costs)Use Figure and Table: Variable,Fixed,and Total Costs.The marginal cost of increasing production from 19 to 36 bushels of wheat is:

The larger the output,the more variable input required to produce additional units.Called the _____ effect,this leads to a _____ average _____ cost as output rises.

In economics,the short run is:

First Principles

Economic Models: Trade-Offs and Trade

Consumer and Producer Surplus

Supply and Demand

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Graphs in Economics

Consumer Preferences and Consumer Choice

Filters

Use the following to answer question: -(Figure: The Total Product)Use Figure: The Total Product.After hiring L₂ labor and producing at point B on the total product curve,hiring more labor beyond L₂ would cause the:

If marginal cost is LESS than average total cost,then _ cost is _.

The larger the output,the more variable input required to produce additional units.Called the ___ effect,this leads to a _ average ___ cost as output rises.