Question 1

The upward-sloping part of the long-run average cost curve is explained by:

Accepted Answer

A) indivisible setup costs. 
B) diseconomies of scale. 
C) output levels that exceed the minimum efficient level of production. 
D) decreasing marginal productivity. 
A) indivisible setup costs. 
B) diseconomies of scale. 
C) output levels that exceed the minimum efficient level of production. 
D) decreasing marginal productivity.

Question 2

Refer to the graph shown. The most economically efficient way to produce 1,000 units of output is to use:

Accepted Answer

A) 5 units of machines and 7.5 units of labor. 
B) 6 and 2/3 units of machines and 5 units of labor. 
C) 10 units of machines and 15 units of labor. 
D) 5 units of machines and 25 units of labor. 
A) 5 units of machines and 7.5 units of labor. 
B) 6 and 2/3 units of machines and 5 units of labor. 
C) 10 units of machines and 15 units of labor. 
D) 5 units of machines and 25 units of labor.

Question 3

Demonstrate graphically and explain verbally the concept of minimum efficient level of production.

Accepted Answer

The minimum efficient level of productio

Question 4

Constant returns to scale are associated with a:

Accepted Answer

A) horizontal long-run average cost curve. 
B) horizontal short-run average cost curve. 
C) downward-sloping long-run average cost curve. 
D) downward-sloping short-run average cost curve. 
A) horizontal long-run average cost curve. 
B) horizontal short-run average cost curve. 
C) downward-sloping long-run average cost curve. 
D) downward-sloping short-run average cost curve.

Question 5

A firm finds that producing 30,000 vases costs $180,000 and producing 40,000 vases costs $200,000. This pattern might be explained by:

Accepted Answer

A) economies of scope. 
B) economies of scale. 
C) diseconomies of scale. 
D) diminishing marginal productivity. 
A) economies of scope. 
B) economies of scale. 
C) diseconomies of scale. 
D) diminishing marginal productivity.

Question 6

Economic efficiency is achieved at a particular output level if:

Accepted Answer

A) marginal cost is as low as possible. 
B) average fixed cost is as low as possible. 
C) average total cost is as low as possible. 
D) average variable cost is as low as possible. 
A) marginal cost is as low as possible. 
B) average fixed cost is as low as possible. 
C) average total cost is as low as possible. 
D) average variable cost is as low as possible.

Question 7

The upward-sloping portion of the short-run average total cost curve is caused by:

Accepted Answer

A) indivisible setup costs. 
B) diseconomies of scale. 
C) the absence of fixed inputs. 
D) the presence of fixed inputs. 
A) indivisible setup costs. 
B) diseconomies of scale. 
C) the absence of fixed inputs. 
D) the presence of fixed inputs.

Question 8

Refer to the graph shown. The graph exhibits economies of scale:

Accepted Answer

A) in region a. 
B) in region b. 
C) in region c. 
D) over the entire range of output. 
A) in region a. 
B) in region b. 
C) in region c. 
D) over the entire range of output.

Question 9

Economies of scope exist when the production of one good is less costly because other related goods already are being produced.

Accepted Answer

A) True 
 B)False

Question 10

Refer to the graph shown. Given the long-run average cost curve, the minimum efficient scale of production is:

Accepted Answer

A) 16. 
B) 18 to 21. 
C) 21. 
D) 23. 
A) 16. 
B) 18 to 21. 
C) 21. 
D) 23.

Question 11

Refer to the graph shown. If the firm's total cost is $375, capital must cost:

Accepted Answer

A) $31.25 per unit. 
B) $37.50 per unit. 
C) $2.50 per unit. 
D) $3 per unit. 
A) $31.25 per unit. 
B) $37.50 per unit. 
C) $2.50 per unit. 
D) $3 per unit.

Question 12

Explain the concept of economies of scope.Give an example.

Accepted Answer

Economies of scope exist when the cost o

Exam 12: Production and Cost Analysis II

The upward-sloping part of the long-run average cost curve is explained by:

Refer to the graph shown. The most economically efficient way to produce 1,000 units of output is to use:

Demonstrate graphically and explain verbally the concept of minimum efficient level of production.

Constant returns to scale are associated with a:

A firm finds that producing 30,000 vases costs $180,000 and producing 40,000 vases costs $200,000. This pattern might be explained by:

Economic efficiency is achieved at a particular output level if:

The upward-sloping portion of the short-run average total cost curve is caused by:

Refer to the graph shown. The graph exhibits economies of scale:

Economies of scope exist when the production of one good is less costly because other related goods already are being produced.

Refer to the graph shown. Given the long-run average cost curve, the minimum efficient scale of production is:

Refer to the graph shown. If the firm's total cost is $375, capital must cost:

Explain the concept of economies of scope.Give an example.

Economics and Economic Reasoning

The Production Possibility Model, Trade, and Globalization

Economic Institutions

Supply and Demand

Using Supply and Demand

Describing Supply and Demand: Elasticities

Taxation and Government Intervention

Market Failure Versus Government Failure

Comparative Advantage, Exchange Rates, and Globalization

International Trade Policy

Production and Cost Analysis I

Perfect Competition

Monopoly and Monopolistic Competition

Oligopoly and Antitrust Policy

Real-World Competition and Technology

Work and the Labor Market

Who Gets What the Distribution of Income

The Logic of Individual Choice: the Foundation of Supply and Demand

Game Theory, Strategic Decision Making, and Behavioral Economics

Thinking Like a Modern Economist

Behavioral Economics and Modern Economic Policy

Microeconomic Policy, Economic Reasoning, and Beyond

Economic Growth, Business Cycles, and Unemployment

Measuring and Describing the Aggregate Economy

The Keynesian Short-Run Policy Model: Demand-Side Policies

The Classical Long-Run Policy Model: Growth and Supply-Side Policies

The Financial Sector and the Economy

Monetary Policy

Financial Crises, Panics, and Unconventional Monetary Policy

Deficits and Debt: the Austerity Debate

The Fiscal Policy Dilemma

Jobs and Unemployment

Inflation, Deflation, and Macro Policy

International Financial Policy

Macro Policy in a Global Setting

Structural Stagnation and Globalization

Macro Policy in Developing Countries

Filters