Question 1

Figure 4.2 Short-Run Cost Curves
  
-Refer to Figure 4.2. Curve 3 represents

Accepted Answer

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

Question 2

Marginal product is total product divided by the total number of workers hired to produce the product.

Accepted Answer

A) True 
 B)False

Question 3

In the pharmaceuticals industry, the principle of ____ long-run average cost is present with the development of a new prescription drug.

Accepted Answer

A)  increasing 
B)  constant 
C)  decreasing 
D)  fixed 
A)  increasing 
B)  constant 
C)  decreasing 
D)  fixed

Question 4

If a growing company benefits greatly from the specialization of labor and management, this most likely means it is experiencing economies of scale.

Accepted Answer

A) True 
 B)False

Question 5

Marginal cost measures how much total cost increases as another unit of output is produced.

Accepted Answer

A) True 
 B)False

Question 6

In the ______, Toyota must choose the optimal plant size in which to produce automobiles.

Accepted Answer

A)  long run 
B)  intermediate run 
C)  short run 
D)  market period 
A)  long run 
B)  intermediate run 
C)  short run 
D)  market period

Question 7

Diseconomies of scale cause a firm's

Accepted Answer

A)  long-run average total cost curve to turn upward 
B)  long-run average total cost curve to turn downward 
C)  short-run average total cost curve to turn upward 
D)  short-run average total cost curve to turn downward 
A)  long-run average total cost curve to turn upward 
B)  long-run average total cost curve to turn downward 
C)  short-run average total cost curve to turn upward 
D)  short-run average total cost curve to turn downward

Question 8

A production function shows the

Accepted Answer

A)  maximum output that can be obtained from existing inputs 
B)  most profitable combination of outputs for a firm to produce 
C)  least profitable combination of outputs for a firm to produce 
D)  most expensive combination of inputs needed to produce a given output 
A)  maximum output that can be obtained from existing inputs 
B)  most profitable combination of outputs for a firm to produce 
C)  least profitable combination of outputs for a firm to produce 
D)  most expensive combination of inputs needed to produce a given output

Question 9

During the 1980s, foreign competition forced Ford, General Motors, and Chrysler to alter their production methods in order to become more competitive. Which policy did not lead to increased competitiveness for these firms?

Accepted Answer

A)  competitive bidding for steel and other resources 
B)  cutting fixed costs and other overhead expenses 
C)  increasing wages to workers assembling automobiles 
D)  slashing redundant managerial jobs and streamlining operations 
A)  competitive bidding for steel and other resources 
B)  cutting fixed costs and other overhead expenses 
C)  increasing wages to workers assembling automobiles 
D)  slashing redundant managerial jobs and streamlining operations

Question 10

Average total cost is total cost per unit of output.

Accepted Answer

A) True 
 B)False

Question 11

If Sharpe Electronics is operating on the increasing portion of its short-run average total cost curve, we can conclude that marginal cost is

Accepted Answer

A)  increasing 
B)  decreasing 
C)  above average total cost 
D)  below average total cost 
A)  increasing 
B)  decreasing 
C)  above average total cost 
D)  below average total cost

Question 12

Diseconomies of scale take place when a firm's long-run average total cost curve is horizontal.

Accepted Answer

A) True 
 B)False

Question 13

Economies of scale tend to dominate industries that

Accepted Answer

A)  have a relatively small required infrastructure 
B)  are goods rather than services 
C)  have a high marginal cost of production 
D)  deliver their goods or services through a network 
A)  have a relatively small required infrastructure 
B)  are goods rather than services 
C)  have a high marginal cost of production 
D)  deliver their goods or services through a network

Question 14

Cox Communication realizes an accounting profit if its total revenue more than covers its implicit costs.

Accepted Answer

A) True 
 B)False

Question 15

The long-run average total cost curve shows the minimum cost per unit of producing each output level when any desired size of factory can be constructed.

Accepted Answer

A) True 
 B)False

Question 16

If a McDonald's franchise increases all resources used in the production process by 25 percent and output increases by less than 25 percent, the franchise realizes

Accepted Answer

A)  constant returns to scale 
B)  increasing marginal productivity 
C)  economies of scale 
D)  diseconomies of scale 
A)  constant returns to scale 
B)  increasing marginal productivity 
C)  economies of scale 
D)  diseconomies of scale

Question 17

Which of the following statements is true about U.S. steel production?

Accepted Answer

A)  The U.S. currently has the lowest average costs of steel production in the world. 
B)  Japan can now produce steel more cheaply than the U.S. 
C)  U.S. steel producers still use the same obsolete plants and technology as they did 75 years ago. 
D)  In 1950, the U.S. steel industry accounted for about one-half of world steel output. 
A)  The U.S. currently has the lowest average costs of steel production in the world. 
B)  Japan can now produce steel more cheaply than the U.S. 
C)  U.S. steel producers still use the same obsolete plants and technology as they did 75 years ago. 
D)  In 1950, the U.S. steel industry accounted for about one-half of world steel output.

Figure 4.2 Short-Run Cost Curves -Refer to Figure 4.2. Curve 3 represents

Marginal product is total product divided by the total number of workers hired to produce the product.

In the pharmaceuticals industry, the principle of ____ long-run average cost is present with the development of a new prescription drug.

If a growing company benefits greatly from the specialization of labor and management, this most likely means it is experiencing economies of scale.

Marginal cost measures how much total cost increases as another unit of output is produced.

In the ______, Toyota must choose the optimal plant size in which to produce automobiles.

Diseconomies of scale cause a firm's

A production function shows the

During the 1980s, foreign competition forced Ford, General Motors, and Chrysler to alter their production methods in order to become more competitive. Which policy did not lead to increased competitiveness for these firms?

Average total cost is total cost per unit of output.

If Sharpe Electronics is operating on the increasing portion of its short-run average total cost curve, we can conclude that marginal cost is

Diseconomies of scale take place when a firm's long-run average total cost curve is horizontal.

Economies of scale tend to dominate industries that

Cox Communication realizes an accounting profit if its total revenue more than covers its implicit costs.

The long-run average total cost curve shows the minimum cost per unit of producing each output level when any desired size of factory can be constructed.

If a McDonald's franchise increases all resources used in the production process by 25 percent and output increases by less than 25 percent, the franchise realizes

Which of the following statements is true about U.S. steel production?

Scarcity and Choice

Market Transactions: Demand and Supply Analysis

Demand and Supply Applications

Competition and Monopoly: Virtues and Vices

Imperfect Competition

Labor Markets

Government and Markets

The Mixed Economy of the United States

Gross Domestic Product and Economic Growth

The Business Cycle, Unemployment, and Inflation

Macroeconomic Instability: Aggregate Demand and Aggregate Supply

Fiscal Policy and the Federal Budget

Money and the Banking System

The Federal Reserve and Monetary Policy

The United States and the Global Economy

International Finance

Economic Systems and Developing Countries

Filters

Exam 4: Production and the Costs of Production

Figure 4.2 Short-Run Cost Curves -Refer to Figure 4.2. Curve 3 represents

Marginal product is total product divided by the total number of workers hired to produce the product.

In the pharmaceuticals industry, the principle of ____ long-run average cost is present with the development of a new prescription drug.

If a growing company benefits greatly from the specialization of labor and management, this most likely means it is experiencing economies of scale.

Marginal cost measures how much total cost increases as another unit of output is produced.

In the ______, Toyota must choose the optimal plant size in which to produce automobiles.

Diseconomies of scale cause a firm's

A production function shows the

During the 1980s, foreign competition forced Ford, General Motors, and Chrysler to alter their production methods in order to become more competitive. Which policy did not lead to increased competitiveness for these firms?

Average total cost is total cost per unit of output.

If Sharpe Electronics is operating on the increasing portion of its short-run average total cost curve, we can conclude that marginal cost is

Diseconomies of scale take place when a firm's long-run average total cost curve is horizontal.

Economies of scale tend to dominate industries that

Cox Communication realizes an accounting profit if its total revenue more than covers its implicit costs.

The long-run average total cost curve shows the minimum cost per unit of producing each output level when any desired size of factory can be constructed.

If a McDonald's franchise increases all resources used in the production process by 25 percent and output increases by less than 25 percent, the franchise realizes

Which of the following statements is true about U.S. steel production?

Scarcity and Choice

Market Transactions: Demand and Supply Analysis

Demand and Supply Applications

Competition and Monopoly: Virtues and Vices

Imperfect Competition

Labor Markets

Government and Markets

The Mixed Economy of the United States

Gross Domestic Product and Economic Growth

The Business Cycle, Unemployment, and Inflation

Macroeconomic Instability: Aggregate Demand and Aggregate Supply

Fiscal Policy and the Federal Budget

Money and the Banking System

The Federal Reserve and Monetary Policy

The United States and the Global Economy

International Finance

Economic Systems and Developing Countries

Filters