Question 1

-In the above figure, the intersection of curves A and C is the point at which

Accepted Answer

A)  average total cost is minimized. 
B)  average variable cost is minimized. 
C)  average fixed cost is minimized. 
D)  total product is maximized. 
A)  average total cost is minimized. 
B)  average variable cost is minimized. 
C)  average fixed cost is minimized. 
D)  total product is maximized.

Question 2

An example of a short-run fixed factor of production is

Accepted Answer

A)  capital equipment. 
B)  labor. 
C)  electricity. 
D)  postage for mailing. 
A)  capital equipment. 
B)  labor. 
C)  electricity. 
D)  postage for mailing.

Question 3

The vertical distance between the total variable cost curve and the total cost curve ________ as output increases; the vertical distance between the average variable cost curve and the average total cost curve ________ as output increases.

Accepted Answer

A)  decreases; remains the same 
B)  is constant; becomes smaller 
C)  increases; becomes smaller at first but then increases 
D)  increases; remains the same 
A)  decreases; remains the same 
B)  is constant; becomes smaller 
C)  increases; becomes smaller at first but then increases 
D)  increases; remains the same

Question 4

-In the above figure, the marginal cost curve is curve

Accepted Answer

A)  A. 
B)  B. 
C)  C. 
D)  D. 
A)  A. 
B)  B. 
C)  C. 
D)  D.

Question 5

Marginal cost is calculated as

Accepted Answer

A)  total cost divided by output. 
B)  the increase in total cost divided by the increase in output. 
C)  the increase in total cost divided by the increase in labor, given the amount of capital. 
D)  total cost minus total fixed cost. 
A)  total cost divided by output. 
B)  the increase in total cost divided by the increase in output. 
C)  the increase in total cost divided by the increase in labor, given the amount of capital. 
D)  total cost minus total fixed cost.

Question 6

Economists define the short run as a period of time so short that

Accepted Answer

A)  the amount of output cannot be changed except under diminishing marginal returns. 
B)  the amount of output cannot be changed at all. 
C)  only one factor of production can be varied. 
D)  at least one factor of production cannot be varied. 
A)  the amount of output cannot be changed except under diminishing marginal returns. 
B)  the amount of output cannot be changed at all. 
C)  only one factor of production can be varied. 
D)  at least one factor of production cannot be varied.

Question 7

When the marginal product of labor is below the average product of labor, the average product must increase when employment increases.

Accepted Answer

A) True 
 B)False

Question 8

Increasing marginal returns to labor might occur at low levels of labor input because of

Accepted Answer

A)  increasing average costs. 
B)  differing factor proportions. 
C)  increasing specialization of tasks. 
D)  decreasing use of machinery and increasing use of technology. 
A)  increasing average costs. 
B)  differing factor proportions. 
C)  increasing specialization of tasks. 
D)  decreasing use of machinery and increasing use of technology.

Question 9

The a firm's short-run cost curves shifts when there is a change in

Accepted Answer

A)  technology 
B)  the prices of factors of production 
C)  the quantity of outputs 
D)  Both answers A and B are correct. 
A)  technology 
B)  the prices of factors of production 
C)  the quantity of outputs 
D)  Both answers A and B are correct.

Question 10

-In the above table, what is marginal product of labor for the 5th worker?

Accepted Answer

A)  10 
B)  14 
C)  9 
D)  11.2 
A)  10 
B)  14 
C)  9 
D)  11.2

Question 11

The law of diminishing marginal returns says that as the firm uses more of ________, with a given quantity of ________, the ________ product of the variable input eventually diminishes.

Accepted Answer

A)  a fixed input; variable inputs; marginal 
B)  all inputs; capital; average 
C)  a variable input; fixed inputs; average 
D)  a variable input; fixed inputs; marginal 
A)  a fixed input; variable inputs; marginal 
B)  all inputs; capital; average 
C)  a variable input; fixed inputs; average 
D)  a variable input; fixed inputs; marginal

Question 12

In the long run, a firm has

Accepted Answer

A)  no factors of production that are fixed. 
B)  no factors of production that are variable. 
C)  no factors of production that are either fixed or variable. 
D)  fixed factors of production but no variable resources. 
A)  no factors of production that are fixed. 
B)  no factors of production that are variable. 
C)  no factors of production that are either fixed or variable. 
D)  fixed factors of production but no variable resources.

Question 13

Health care costs rose more than 10 percent in 2011, according to a survey of insurers by Aon Consulting Worldwide. If the increase in costs solely comes from increased wages to nurses and doctors, then for the health care industry

Accepted Answer

A)  variable costs are increasing. 
B)  fixed costs are increasing. 
C)  long run average total cost is decreasing. 
D)  productivity is increasing. 
A)  variable costs are increasing. 
B)  fixed costs are increasing. 
C)  long run average total cost is decreasing. 
D)  productivity is increasing.

Question 14

Total Product, Marginal Product, Average Product
  
-In the above table, the average product is less than the marginal product

Accepted Answer

A)  when the first worker is hired. 
B)  when the second worker is hired. 
C)  when the third worker is hired. 
D)  for the entire range of output given. 
A)  when the first worker is hired. 
B)  when the second worker is hired. 
C)  when the third worker is hired. 
D)  for the entire range of output given.

Question 15

The short run is a period of time in which

Accepted Answer

A)  the quantity of at least one factor of production is fixed. 
B)  the amount of output is fixed. 
C)  prices and wages are fixed. 
D)  nothing the firm does can be altered. 
A)  the quantity of at least one factor of production is fixed. 
B)  the amount of output is fixed. 
C)  prices and wages are fixed. 
D)  nothing the firm does can be altered.

Question 16

Health care costs rose more than 10 percent in 2011, according to a survey of insurers by Aon Consulting Worldwide. Which of the following would be a fixed cost in a hospital?

Accepted Answer

A)  an MRI machine 
B)  bandages 
C)  nurses 
D)  syringes 
A)  an MRI machine 
B)  bandages 
C)  nurses 
D)  syringes

Question 17

Decent Donuts
  
-Based on the data in the table above, after which worker is hired do diminishing marginal returns begin?

Accepted Answer

A)  the first 
B)  the fifth 
C)  the sixth 
D)  the ninth 
A)  the first 
B)  the fifth 
C)  the sixth 
D)  the ninth

Question 18

When a firm's long-run average cost is constant as output increases, the firm is experiencing constant returns to scale.

Accepted Answer

A) True 
 B)False

Question 19

When a firm is experiencing diseconomies of scale

Accepted Answer

A)  the MP curve has a negative slope. 
B)  the LRAC curve has a positive slope. 
C)  it must also experience diminishing returns to labor. 
D)  the MC curve has a negative slope. 
A)  the MP curve has a negative slope. 
B)  the LRAC curve has a positive slope. 
C)  it must also experience diminishing returns to labor. 
D)  the MC curve has a negative slope.

Question 20

One reason for diseconomies of scale is that, at very large scales, management systems can become

Accepted Answer

A)  more efficient because they can effectively manage more workers. 
B)  increasingly complex and inefficient. 
C)  more numerous than the workers they manage. 
D)  none of the above. 
A)  more efficient because they can effectively manage more workers. 
B)  increasingly complex and inefficient. 
C)  more numerous than the workers they manage. 
D)  none of the above.

-In the above figure, the intersection of curves A and C is the point at which

An example of a short-run fixed factor of production is

The vertical distance between the total variable cost curve and the total cost curve as output increases; the vertical distance between the average variable cost curve and the average total cost curve as output increases.

-In the above figure, the marginal cost curve is curve

Marginal cost is calculated as

Economists define the short run as a period of time so short that

When the marginal product of labor is below the average product of labor, the average product must increase when employment increases.

Increasing marginal returns to labor might occur at low levels of labor input because of

The a firm's short-run cost curves shifts when there is a change in

-In the above table, what is marginal product of labor for the 5th worker?

The law of diminishing marginal returns says that as the firm uses more of , with a given quantity of , the product of the variable input eventually diminishes.

In the long run, a firm has

Health care costs rose more than 10 percent in 2011, according to a survey of insurers by Aon Consulting Worldwide. If the increase in costs solely comes from increased wages to nurses and doctors, then for the health care industry

Total Product, Marginal Product, Average Product -In the above table, the average product is less than the marginal product

The short run is a period of time in which

Health care costs rose more than 10 percent in 2011, according to a survey of insurers by Aon Consulting Worldwide. Which of the following would be a fixed cost in a hospital?

Decent Donuts -Based on the data in the table above, after which worker is hired do diminishing marginal returns begin?

When a firm's long-run average cost is constant as output increases, the firm is experiencing constant returns to scale.

When a firm is experiencing diseconomies of scale

One reason for diseconomies of scale is that, at very large scales, management systems can become

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Organizing Production

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Exam 11: Output and Costs

-In the above figure, the intersection of curves A and C is the point at which

An example of a short-run fixed factor of production is

The vertical distance between the total variable cost curve and the total cost curve ________ as output increases; the vertical distance between the average variable cost curve and the average total cost curve ________ as output increases.

-In the above figure, the marginal cost curve is curve

Marginal cost is calculated as

Economists define the short run as a period of time so short that

When the marginal product of labor is below the average product of labor, the average product must increase when employment increases.

Increasing marginal returns to labor might occur at low levels of labor input because of

The a firm's short-run cost curves shifts when there is a change in

-In the above table, what is marginal product of labor for the 5th worker?

The law of diminishing marginal returns says that as the firm uses more of ________, with a given quantity of ________, the ________ product of the variable input eventually diminishes.

In the long run, a firm has

Health care costs rose more than 10 percent in 2011, according to a survey of insurers by Aon Consulting Worldwide. If the increase in costs solely comes from increased wages to nurses and doctors, then for the health care industry

Total Product, Marginal Product, Average Product -In the above table, the average product is less than the marginal product

The short run is a period of time in which

Health care costs rose more than 10 percent in 2011, according to a survey of insurers by Aon Consulting Worldwide. Which of the following would be a fixed cost in a hospital?

Decent Donuts -Based on the data in the table above, after which worker is hired do diminishing marginal returns begin?

When a firm's long-run average cost is constant as output increases, the firm is experiencing constant returns to scale.

When a firm is experiencing diseconomies of scale

One reason for diseconomies of scale is that, at very large scales, management systems can become

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Organizing Production

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

The vertical distance between the total variable cost curve and the total cost curve as output increases; the vertical distance between the average variable cost curve and the average total cost curve as output increases.

The law of diminishing marginal returns says that as the firm uses more of , with a given quantity of , the product of the variable input eventually diminishes.