Question 1

-In Figure 7-4,marginal product of labor is negative for levels of employment

Accepted Answer

A) between 0 and 80 workers 
B) equal to 35 workers 
C) between 35 and 80 workers 
D) greater than 80 workers 
E) none of the above 
A) between 0 and 80 workers 
B) equal to 35 workers 
C) between 35 and 80 workers 
D) greater than 80 workers 
E) none of the above

Question 2

-The firm depicted in Figure 7-10 currently is producing 200 units of output per day.If it decides to increase its output level to 375 units,then it will

Accepted Answer

A) adjust from point F to point G in the short run 
B) be unable to adjust to point G in the short run because some inputs are fixed 
C) be unable to adjust to point G in the long run because some are fixed 
D) be unable to adjust to point H in the short run because some inputs are fixed 
E) adjust from point F to point H in the long run 
A) adjust from point F to point G in the short run 
B) be unable to adjust to point G in the short run because some inputs are fixed 
C) be unable to adjust to point G in the long run because some are fixed 
D) be unable to adjust to point H in the short run because some inputs are fixed 
E) adjust from point F to point H in the long run

Question 3

-Figure 7-1 shows the amounts of coal that a mining company could produce per week by changing the number of workers while capital and technology remain constant.The marginal product of employing the fourth worker is

Accepted Answer

A) 120 tons of coal 
B) 480 tons of coal 
C) 319 tons of coal 
D) 180 tons of coal 
E) 106.33 tons of coal 
A) 120 tons of coal 
B) 480 tons of coal 
C) 319 tons of coal 
D) 180 tons of coal 
E) 106.33 tons of coal

Question 4

The marginal product of labor is the

Accepted Answer

A) total output produced when one more worker is hired 
B) change in average output produced when one more worker is hired 
C) total output per worker when one more worker is hired 
D) change in total output when one more worker is hired 
E) maximum quantity of output when one more worker is hired 
A) total output produced when one more worker is hired 
B) change in average output produced when one more worker is hired 
C) total output per worker when one more worker is hired 
D) change in total output when one more worker is hired 
E) maximum quantity of output when one more worker is hired

Question 5

-Figure 7-1 shows the amounts of coal that a mining company could produce per week by changing the number of workers while capital and technology remain constant.Which worker has a marginal product of 120 tons of coal?

Accepted Answer

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

Question 6

-Figure 7-7 shows a firm's total variable cost for different daily output levels.In addition,the firm has total fixed cost of $50 per day.At an output level of 20 units,average variable cost is

Accepted Answer

A) $75.00,and average fixed cost is $2.50 
B) $17.50,and average fixed cost is $50.00 
C) $150.00,and average fixed cost is $2.50 
D) $7.50,and average fixed cost is $50.00 
E) $17.50,and average fixed cost is $2.50 
A) $75.00,and average fixed cost is $2.50 
B) $17.50,and average fixed cost is $50.00 
C) $150.00,and average fixed cost is $2.50 
D) $7.50,and average fixed cost is $50.00 
E) $17.50,and average fixed cost is $2.50

Question 7

Average Fixed Cost is the

Accepted Answer

A) horizontal distance (at any particular cost level)between ATC and AVC 
B) vertical distance (at any particular quantity)between ATC and AVC 
C) vertical distance (at any particular quantity)between ATC and the horizontal axis 
D) vertical distance (at any particular quantity)between AVC and the horizontal axis 
E) horizontal distance (at any particular cost level)between ATC and the vertical axis 
A) horizontal distance (at any particular cost level)between ATC and AVC 
B) vertical distance (at any particular quantity)between ATC and AVC 
C) vertical distance (at any particular quantity)between ATC and the horizontal axis 
D) vertical distance (at any particular quantity)between AVC and the horizontal axis 
E) horizontal distance (at any particular cost level)between ATC and the vertical axis

Question 8

Long-run average total cost must always be

Accepted Answer

A) rising 
B) declining 
C) greater than or equal to the marginal unit of variable cost 
D) greater than or equal to the short run average total cost 
E) less than or equal to short-run average total cost 
A) rising 
B) declining 
C) greater than or equal to the marginal unit of variable cost 
D) greater than or equal to the short run average total cost 
E) less than or equal to short-run average total cost

Question 9

Which of the following is an implicit cost?

Accepted Answer

A) salaries paid to owners who work for their own firm 
B) interest on money borrowed to finance equipment purchases 
C) cash payments for raw materials 
D) wages paid to hourly employees 
E) foregone rent on office space owned and used by the firm 
A) salaries paid to owners who work for their own firm 
B) interest on money borrowed to finance equipment purchases 
C) cash payments for raw materials 
D) wages paid to hourly employees 
E) foregone rent on office space owned and used by the firm

Question 10

Average variable cost is

Accepted Answer

A) total cost minus fixed cost 
B) total variable cost divided by the quantity of output 
C) total cost plus marginal cost 
D) total cost per unit of output 
E) output divided by the quantity of inputs used 
A) total cost minus fixed cost 
B) total variable cost divided by the quantity of output 
C) total cost plus marginal cost 
D) total cost per unit of output 
E) output divided by the quantity of inputs used

Question 11

The firm's long-run average total cost curve

Accepted Answer

A) intersects each short-run average total cost curve at its minimum point 
B) lies below its short-run average total cost curves at every output level 
C) lies above its short-run average total cost curves at every output level 
D) coincides with a small segment of its short-run average total cost 
E) touches each of the firm's short-run average total cost curves at the lowest points 
A) intersects each short-run average total cost curve at its minimum point 
B) lies below its short-run average total cost curves at every output level 
C) lies above its short-run average total cost curves at every output level 
D) coincides with a small segment of its short-run average total cost 
E) touches each of the firm's short-run average total cost curves at the lowest points

Question 12

The marginal cost curve crosses

Accepted Answer

A) both the average total cost and average variable cost curves at their respective minimum points 
B) the average total cost curve at its minimum point,and the average variable cost curve at its maximum point 
C) the average total cost curve and the average variable cost curves at the same output level 
D) both the average total cost and average variable cost curves at their respective maximum points 
E) the average total cost curve at its maximum point,and the average variable cost curve at its minimum point 
A) both the average total cost and average variable cost curves at their respective minimum points 
B) the average total cost curve at its minimum point,and the average variable cost curve at its maximum point 
C) the average total cost curve and the average variable cost curves at the same output level 
D) both the average total cost and average variable cost curves at their respective maximum points 
E) the average total cost curve at its maximum point,and the average variable cost curve at its minimum point

Question 13

-The firm depicted in Figure 7-11 has a larger plant size at point

Accepted Answer

A) H than at point F 
B) F than at point H 
C) F than at point G 
D) G than at point H 
E) H than at point G 
A) H than at point F 
B) F than at point H 
C) F than at point G 
D) G than at point H 
E) H than at point G

Question 14

Along its long-run average total cost curve,a firm employs

Accepted Answer

A) a different amount of fixed inputs at each point 
B) the same amount of fixed inputs at each point 
C) a declining amount of fixed inputs at each point as it moves to higher output levels 
D) an increasing amount of fixed inputs at each point as it moves to higher output levels 
E) no fixed inputs 
A) a different amount of fixed inputs at each point 
B) the same amount of fixed inputs at each point 
C) a declining amount of fixed inputs at each point as it moves to higher output levels 
D) an increasing amount of fixed inputs at each point as it moves to higher output levels 
E) no fixed inputs

Question 15

If a firm experiences economies of scale,then,as output increases,

Accepted Answer

A) short-run total costs decline 
B) long-run total costs rises proportionately more than output 
C) short-run marginal cost must decline 
D) long-run total cost rises proportionately less than output 
E) demand increases 
A) short-run total costs decline 
B) long-run total costs rises proportionately more than output 
C) short-run marginal cost must decline 
D) long-run total cost rises proportionately less than output 
E) demand increases

Question 16

Total product begins to decline when diminishing marginal returns are first experienced.

Accepted Answer

A) True 
 B)False

Question 17

If a firm increases its output level in the short run,then

Accepted Answer

A) variable cost rises but fixed cost remains unchanged 
B) both variable cost and fixed cost rise 
C) variable cost rises,but fixed cost fall 
D) both variable cost and fixed cost fall 
E) variable cost remains unchanged,but fixed cost rises 
A) variable cost rises but fixed cost remains unchanged 
B) both variable cost and fixed cost rise 
C) variable cost rises,but fixed cost fall 
D) both variable cost and fixed cost fall 
E) variable cost remains unchanged,but fixed cost rises

Question 18

Which of the following is the best example of a variable cost?

Accepted Answer

A) property taxes 
B) lease payments for equipment rental 
C) rent on office space 
D) wages for hourly workers 
E) interest on outstanding loans 
A) property taxes 
B) lease payments for equipment rental 
C) rent on office space 
D) wages for hourly workers 
E) interest on outstanding loans

Question 19

If Babette's Bicycle shop can rebuild three bicycles for $200 and four bicycles for $240,then the average variable cost of four bicycles

Accepted Answer

A) equals $40 
B) cannot be determined without more information 
C) equals $60 
D) equals $240 
E) equals $10 
A) equals $40 
B) cannot be determined without more information 
C) equals $60 
D) equals $240 
E) equals $10

Question 20

The change in cost resulting from producing one additional unit of output is

Accepted Answer

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

-In Figure 7-4,marginal product of labor is negative for levels of employment

-The firm depicted in Figure 7-10 currently is producing 200 units of output per day.If it decides to increase its output level to 375 units,then it will

-Figure 7-1 shows the amounts of coal that a mining company could produce per week by changing the number of workers while capital and technology remain constant.The marginal product of employing the fourth worker is

The marginal product of labor is the

-Figure 7-1 shows the amounts of coal that a mining company could produce per week by changing the number of workers while capital and technology remain constant.Which worker has a marginal product of 120 tons of coal?

-Figure 7-7 shows a firm's total variable cost for different daily output levels.In addition,the firm has total fixed cost of $50 per day.At an output level of 20 units,average variable cost is

Average Fixed Cost is the

Long-run average total cost must always be

Which of the following is an implicit cost?

Average variable cost is

The firm's long-run average total cost curve

The marginal cost curve crosses

-The firm depicted in Figure 7-11 has a larger plant size at point

Along its long-run average total cost curve,a firm employs

If a firm experiences economies of scale,then,as output increases,

Total product begins to decline when diminishing marginal returns are first experienced.

If a firm increases its output level in the short run,then

Which of the following is the best example of a variable cost?

If Babette's Bicycle shop can rebuild three bicycles for $200 and four bicycles for $240,then the average variable cost of four bicycles

The change in cost resulting from producing one additional unit of output is

What Is Economics

Scarcity, choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

Elasticity

Consumer Choice

How Firms Make Decisions: Profit Maximization

Perfect Competition

B:Perfect Competition

Monopolistic Competition and Oligopoly

Monopoly

Labor Markets

B: Labor Markets

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

Filters

Exam 7: Production and Cost

-In Figure 7-4,marginal product of labor is negative for levels of employment

-The firm depicted in Figure 7-10 currently is producing 200 units of output per day.If it decides to increase its output level to 375 units,then it will

-Figure 7-1 shows the amounts of coal that a mining company could produce per week by changing the number of workers while capital and technology remain constant.The marginal product of employing the fourth worker is

The marginal product of labor is the

-Figure 7-1 shows the amounts of coal that a mining company could produce per week by changing the number of workers while capital and technology remain constant.Which worker has a marginal product of 120 tons of coal?

-Figure 7-7 shows a firm's total variable cost for different daily output levels.In addition,the firm has total fixed cost of $50 per day.At an output level of 20 units,average variable cost is

Average Fixed Cost is the

Long-run average total cost must always be

Which of the following is an implicit cost?

Average variable cost is

The firm's long-run average total cost curve

The marginal cost curve crosses

-The firm depicted in Figure 7-11 has a larger plant size at point

Along its long-run average total cost curve,a firm employs

If a firm experiences economies of scale,then,as output increases,

Total product begins to decline when diminishing marginal returns are first experienced.

If a firm increases its output level in the short run,then

Which of the following is the best example of a variable cost?

If Babette's Bicycle shop can rebuild three bicycles for $200 and four bicycles for $240,then the average variable cost of four bicycles

The change in cost resulting from producing one additional unit of output is

What Is Economics

Scarcity, choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

Elasticity

Consumer Choice

How Firms Make Decisions: Profit Maximization

Perfect Competition

B:Perfect Competition

Monopolistic Competition and Oligopoly

Monopoly

Labor Markets

B: Labor Markets

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

Filters