Question 1

Marginal cost is the

Accepted Answer

A) change in average cost when an additional unit of output is produced. 
B) the additional output when total cost is increased by one dollar. 
C) additional cost of producing an additional unit of output. 
D) change in the price of inputs if a firm buys more inputs to produce an additional unit of output. 
A) change in average cost when an additional unit of output is produced. 
B) the additional output when total cost is increased by one dollar. 
C) additional cost of producing an additional unit of output. 
D) change in the price of inputs if a firm buys more inputs to produce an additional unit of output.

Question 2

A firm has successfully adopted a positive technological change when

Accepted Answer

A) it can produce more output using the same inputs. 
B) it produces less pollution in its production process. 
C) can pay its workers less yet increase its output. 
D) it sees an increase in worker productivity. 
A) it can produce more output using the same inputs. 
B) it produces less pollution in its production process. 
C) can pay its workers less yet increase its output. 
D) it sees an increase in worker productivity.

Question 3

Figure 9.2
  
-Refer to Figure 9.2.The curve labeled "E" is

Accepted Answer

A) the total product curve. 
B) the average product curve. 
C) the marginal product curve. 
D) the output supply curve. 
A) the total product curve. 
B) the average product curve. 
C) the marginal product curve. 
D) the output supply curve.

Question 4

The marginal product of labour is defined as

Accepted Answer

A) the additional sales revenue that results when one more worker is hired. 
B) the additional output that results when one more worker is hired, holding all other resources constant. 
C) the additional number of workers required to produce one more unit of output. 
D) the cost of hiring one more worker. 
A) the additional sales revenue that results when one more worker is hired. 
B) the additional output that results when one more worker is hired, holding all other resources constant. 
C) the additional number of workers required to produce one more unit of output. 
D) the cost of hiring one more worker.

Question 5

A Toyota plant president was quoted as saying, "Demand for high volumes saps your energy.Over a period of time, it eroded our focus [and] thinned out the expertise and knowledge we painstakingly built up over the years." Based on this quote, what must be true of the plant's average cost of production curve?

Accepted Answer

A) It is upward-sloping. 
B) It is downward-sloping. 
C) It is a ray from the origin. 
D) It is U-shaped. 
A) It is upward-sloping. 
B) It is downward-sloping. 
C) It is a ray from the origin. 
D) It is U-shaped.

Question 6

Higher isocost lines correspond to higher

Accepted Answer

A) profits. 
B) total costs of production. 
C)  input prices. 
D) sales revenue. 
A) profits. 
B) total costs of production. 
C)  input prices. 
D) sales revenue.

Question 7

In economics, what is the difference between the short run and the long run?

Accepted Answer

In economics, the short run refers to th

Question 8

An important reason why diseconomies of scale arise is because firms may have to hire lower skilled workers as firms expand.

Accepted Answer

A) True 
 B)False

Question 9

If a firm produces 20 units of output and incurs a total cost of $1,000 and a variable cost is $700, calculate the firm's average fixed cost of production if it expands output to 25 units.

Accepted Answer

A) $300 
B) $15 
C) $12 
D) It is impossible to determine without additional information. 
A) $300 
B) $15 
C) $12 
D) It is impossible to determine without additional information.

Question 10

If the marginal cost curve is below the average variable cost curve, then

Accepted Answer

A) average variable cost is increasing. 
B) average variable cost is decreasing. 
C) marginal cost must be decreasing. 
D) average variable cost could either be increasing or decreasing. 
A) average variable cost is increasing. 
B) average variable cost is decreasing. 
C) marginal cost must be decreasing. 
D) average variable cost could either be increasing or decreasing.

Question 11

In the short run, if marginal product is at its maximum, then

Accepted Answer

A) average cost is at its minimum. 
B) average variable cost is at its minimum. 
C) marginal cost is at its minimum. 
D) total cost is at its maximum. 
A) average cost is at its minimum. 
B) average variable cost is at its minimum. 
C) marginal cost is at its minimum. 
D) total cost is at its maximum.

Question 12

Long-run cost curves are U-shaped because

Accepted Answer

A) of the law of demand. 
B) of the law of diminishing returns. 
C) of economies and diseconomies of scale. 
D) of the law of supply. 
A) of the law of demand. 
B) of the law of diminishing returns. 
C) of economies and diseconomies of scale. 
D) of the law of supply.

Question 13

The short run is the time period during which a firm has at least one input constraint.

Accepted Answer

A) True 
 B)False

Question 14

Economies of scale exist as a firm increases its size in the long run because of all of the following except

Accepted Answer

A) the firm can afford more sophisticated technology in production. 
B) labour and management can specialize even further in their tasks. 
C) as a larger input buyer, the firm can purchase inputs at a lower per unit cost. 
D) as a firm expands its production, its profit margin per-unit of output increases. 
A) the firm can afford more sophisticated technology in production. 
B) labour and management can specialize even further in their tasks. 
C) as a larger input buyer, the firm can purchase inputs at a lower per unit cost. 
D) as a firm expands its production, its profit margin per-unit of output increases.

Question 15

An isoquant is a curve that shows all the combinations of two inputs that will produce the same level of output.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is an example of positive technological change?

Accepted Answer

A) A firm offers workers a higher wage to work on weekends and at night. As a result, the firm is able to increase its weekly production of surf boards. 
B) A firm buys an additional machine that it uses to make surf boards. As a result, the firm is able to increase its weekly production of surf boards. 
C) A firm conducts a new advertising campaign. As a result, the demand for the firm's surf boards increases. 
D) A firm's workers participate in a training program designed to increase the number of surf boards they can produce per day. 
A) A firm offers workers a higher wage to work on weekends and at night. As a result, the firm is able to increase its weekly production of surf boards. 
B) A firm buys an additional machine that it uses to make surf boards. As a result, the firm is able to increase its weekly production of surf boards. 
C) A firm conducts a new advertising campaign. As a result, the demand for the firm's surf boards increases. 
D) A firm's workers participate in a training program designed to increase the number of surf boards they can produce per day.

Question 17

If the firm is producing no output in the short run, then its total costs are zero.

Accepted Answer

A) True 
 B)False

Question 18

Table 9.3
 $\begin{array}{|c|c|c|c|c|}
\hline \begin{array}{c}
\text { Quantity of } \
\text { Lanterns }
\end{array} & \begin{array}{c}
\text { Fixed Cost } \
\text { (dollars) }
\end{array} & \begin{array}{c}
\text { Variable Cost } \
\text { (dollars) }
\end{array} & \begin{array}{c}
\text { Total Cost } \
\text { (dollars) }
\end{array} & \begin{array}{c}
\text { Average Total Cost } \
\text { (dollars) }
\end{array} \
\hline 75 & 200 & 170 & 370 & 4.93 \
\hline 80 & 200 & 230 & 430 & 5.36 \
\hline 90 & 200 & & & 7.67 \
\hline 100 & 200 & 810 & &  \
\hline 115 & 200 & & & 11.8 \
\hline 117 & 200 & 1264 & 1464 &12.5 \
\hline 120 & 200 & 1480 & & \
\hline
\end{array}$ 
Table 9.3 shows cost data for Lotus Lanterns, a producer of whimsical night lights.
-Refer to Table 9.3.What is the variable cost of production when the firm produces 115 lanterns?

Accepted Answer

A) $1,556 
B) $1,157 
C) $956 
D) $10.05 
A) $1,556 
B) $1,157 
C) $956 
D) $10.05

Question 19

If 11 workers can produce a total of 54 units of a product and a 12th worker has a marginal product of 6 units, then the average product of 12 workers is

Accepted Answer

A) 60 units. 
B) 54 units. 
C) 48 units. 
D) 5 units. 
A) 60 units. 
B) 54 units. 
C) 48 units. 
D) 5 units.

Question 20

The absolute value of the slope of an isocost line equals the ratio of

Accepted Answer

A) the marginal productivities of the two inputs. 
B)  the prices of the two inputs. 
C)  the marginal utilities of the two inputs. 
D) the quantities of the two inputs. 
A) the marginal productivities of the two inputs. 
B)  the prices of the two inputs. 
C)  the marginal utilities of the two inputs. 
D) the quantities of the two inputs.

Marginal cost is the

A firm has successfully adopted a positive technological change when

Figure 9.2 -Refer to Figure 9.2.The curve labeled "E" is

The marginal product of labour is defined as

Higher isocost lines correspond to higher

In economics, what is the difference between the short run and the long run?

An important reason why diseconomies of scale arise is because firms may have to hire lower skilled workers as firms expand.

If a firm produces 20 units of output and incurs a total cost of $1,000 and a variable cost is $700, calculate the firm's average fixed cost of production if it expands output to 25 units.

If the marginal cost curve is below the average variable cost curve, then

In the short run, if marginal product is at its maximum, then

Long-run cost curves are U-shaped because

The short run is the time period during which a firm has at least one input constraint.

Economies of scale exist as a firm increases its size in the long run because of all of the following except

An isoquant is a curve that shows all the combinations of two inputs that will produce the same level of output.

Which of the following is an example of positive technological change?

If the firm is producing no output in the short run, then its total costs are zero.

If 11 workers can produce a total of 54 units of a product and a 12th worker has a marginal product of 6 units, then the average product of 12 workers is

The absolute value of the slope of an isocost line equals the ratio of

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Firms in Perfectly Competitive Markets

Monopolistic Competition

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

The Markets for Labour and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Pricing Strategy

Firms, the Stock Market, and Corporate Governance

Filters

Exam 9: Technology, Production, and Costs

Marginal cost is the

A firm has successfully adopted a positive technological change when

Figure 9.2 -Refer to Figure 9.2.The curve labeled "E" is

The marginal product of labour is defined as

Higher isocost lines correspond to higher

In economics, what is the difference between the short run and the long run?

An important reason why diseconomies of scale arise is because firms may have to hire lower skilled workers as firms expand.

If a firm produces 20 units of output and incurs a total cost of $1,000 and a variable cost is $700, calculate the firm's average fixed cost of production if it expands output to 25 units.

If the marginal cost curve is below the average variable cost curve, then

In the short run, if marginal product is at its maximum, then

Long-run cost curves are U-shaped because

The short run is the time period during which a firm has at least one input constraint.

Economies of scale exist as a firm increases its size in the long run because of all of the following except

An isoquant is a curve that shows all the combinations of two inputs that will produce the same level of output.

Which of the following is an example of positive technological change?

If the firm is producing no output in the short run, then its total costs are zero.

If 11 workers can produce a total of 54 units of a product and a 12th worker has a marginal product of 6 units, then the average product of 12 workers is

The absolute value of the slope of an isocost line equals the ratio of

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Firms in Perfectly Competitive Markets

Monopolistic Competition

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

The Markets for Labour and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Pricing Strategy

Firms, the Stock Market, and Corporate Governance

Filters