Question 1

If production displays diseconomies of scale,the long run average cost curve is

Accepted Answer

A) above the short run average total cost curve. 
B) above the long run marginal cost curve. 
C) upward sloping. 
D) downward sloping. 
A) above the short run average total cost curve. 
B) above the long run marginal cost curve. 
C) upward sloping. 
D) downward sloping. C

Question 2

Which of the following statements is false?

Accepted Answer

A) An explicit cost is a nonmonetary opportunity cost. 
B) In the short run: total cost = fixed cost + variable cost. 
C) Variable costs are costs that change as output changes. 
D) In the long run there are no fixed costs. 
A) An explicit cost is a nonmonetary opportunity cost. 
B) In the short run: total cost = fixed cost + variable cost. 
C) Variable costs are costs that change as output changes. 
D) In the long run there are no fixed costs. A

Question 3

If a firm experiences diminishing returns its marginal product must be negative.

Accepted Answer

A) True 
 B)False  False

Question 4

Sam Lewis owns a firm in New York City's garment district.If Sam keeps adding workers to use the same number of sewing machines,eventually the workplace will become so crowded that workers will get in each other's way.At this point

Accepted Answer

A) the marginal product of labor in Sam's business would be negative and his total output would decrease. 
B) Sam should encourage his workers to share their sewing machines. 
C) Sam's business will be in violation of safety rules that have been established by the New York City government. 
D) Sam should begin using a division of labor in his business. 
A) the marginal product of labor in Sam's business would be negative and his total output would decrease. 
B) Sam should encourage his workers to share their sewing machines. 
C) Sam's business will be in violation of safety rules that have been established by the New York City government. 
D) Sam should begin using a division of labor in his business.

Question 5

Which of the following statements best describes the economic short run?

Accepted Answer

A) It is a period of one year or less. 
B) It is a period during which firms are free to vary all of their inputs. 
C) It is a period during which at least one of the firm's inputs is fixed. 
D) It is a period during which fixed inputs become variable inputs because of depreciation. 
A) It is a period of one year or less. 
B) It is a period during which firms are free to vary all of their inputs. 
C) It is a period during which at least one of the firm's inputs is fixed. 
D) It is a period during which fixed inputs become variable inputs because of depreciation.

Question 6

Which of the following is an example of market "production," as used by economist?

Accepted Answer

A) Garvey takes out a low-cost government loan to start his pet-sitting business. 
B) Heidi makes a pizza for her family's dinner. 
C) Katrina works as a cashier at the local produce stand. 
D) The theatre and film studies department in Fine Art's College stages a play at the local theatre. 
A) Garvey takes out a low-cost government loan to start his pet-sitting business. 
B) Heidi makes a pizza for her family's dinner. 
C) Katrina works as a cashier at the local produce stand. 
D) The theatre and film studies department in Fine Art's College stages a play at the local theatre.

Question 7

Increases in the marginal product of labor result from

Accepted Answer

A) the use of new technology. 
B) hiring more efficient workers. 
C) the division of labor and specialization. 
D) increasing the usage of all inputs. 
A) the use of new technology. 
B) hiring more efficient workers. 
C) the division of labor and specialization. 
D) increasing the usage of all inputs.

Question 8

If an airport decides to expand by building an additional passenger terminal,and in doing so it lowers its average cost per airplane landing,then the expansion would provide ________ to the airlines.

Accepted Answer

A) economies of scale 
B) diseconomies of scale 
C) higher average costs but lower total costs 
D) higher marginal costs but lower total costs 
A) economies of scale 
B) diseconomies of scale 
C) higher average costs but lower total costs 
D) higher marginal costs but lower total costs

Question 9

In the short-run,changes in output can only be brought about by a change in the quantity of variable inputs.

Accepted Answer

A) True 
 B)False

Question 10

Accounting costs exclude implicit costs.

Accepted Answer

A) True 
 B)False

Question 11

Is it possible for average total cost to be decreasing over a range of output where marginal cost is increasing? Briefly explain.

Accepted Answer

Yes.As long as the marginal co

Question 12

Which of the following is true at the output level where average total cost is at its minimum?

Accepted Answer

A) Marginal cost equals average total cost. 
B) Average variable cost equals fixed cost. 
C) Marginal cost equals average variable cost. 
D) Average total cost equals average fixed cost. 
A) Marginal cost equals average total cost. 
B) Average variable cost equals fixed cost. 
C) Marginal cost equals average variable cost. 
D) Average total cost equals average fixed cost.

Question 13

Vipsana's Gyros House sells gyros.The cost of ingredients (pita,meat,spices,etc.)to make a gyro is $2.00.Vipsana pays her employees $60 per day.She also incurs a fixed cost of $120 per day.Calculate Vipsana's average fixed cost per day when she produces 50 gyros using two workers?

Accepted Answer

A) $2.00 
B) $2.40 
C) $4.40 
D) $6.80 
A) $2.00 
B) $2.40 
C) $4.40 
D) $6.80

Question 14

When a firm experiences negative technological change it can produce the same output with fewer inputs.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is a reason why a firm would experience diseconomies of scale?

Accepted Answer

A) To finance an increase in the size of its plant a firm must borrow more money or sell more shares of stock. 
B) As the size of the firm increases, it becomes more difficult to find markets where it doesn't already have operations. 
C) As the size of the firm increases it becomes more difficult to coordinate the operations of its manufacturing plants. 
D) As the size of the firm increases, it must operate in other countries where differences in language, customs and laws increase its average costs. 
A) To finance an increase in the size of its plant a firm must borrow more money or sell more shares of stock. 
B) As the size of the firm increases, it becomes more difficult to find markets where it doesn't already have operations. 
C) As the size of the firm increases it becomes more difficult to coordinate the operations of its manufacturing plants. 
D) As the size of the firm increases, it must operate in other countries where differences in language, customs and laws increase its average costs.

Question 16

If fixed costs do not change,then marginal cost

Accepted Answer

A) also remains constant. 
B) equals the change in variable cost divided by the change in output. 
C) equals the change in average variable cost divided by the change in output. 
D) equals the change in average fixed cost divided by the change in output. 
A) also remains constant. 
B) equals the change in variable cost divided by the change in output. 
C) equals the change in average variable cost divided by the change in output. 
D) equals the change in average fixed cost divided by the change in output.

Question 17

The rules of accounting generally require that ________ costs be used for purposes of keeping a company's financial records and for paying taxes.These costs are sometimes called ________ costs.

Accepted Answer

A) economic; legal 
B) real; explicit 
C) total; economic 
D) explicit; accounting 
A) economic; legal 
B) real; explicit 
C) total; economic 
D) explicit; accounting

Question 18

In the short run,marginal product of labor increases at first and then falls because

Accepted Answer

A) as more labor is hired, they are not as skilled as the first ones hired. 
B) there are fewer opportunities for division of labor and specialization when fewer workers are hired. 
C) managerial inefficiency sets in when a firm gets too large. 
D) the new workers do not have as much experience as those who have been with the firm for a long time and therefore are not as productive. 
A) as more labor is hired, they are not as skilled as the first ones hired. 
B) there are fewer opportunities for division of labor and specialization when fewer workers are hired. 
C) managerial inefficiency sets in when a firm gets too large. 
D) the new workers do not have as much experience as those who have been with the firm for a long time and therefore are not as productive.

Question 19

Which of the following statements is false?

Accepted Answer

A) An implicit cost is a nonmonetary opportunity cost. 
B) Economic costs include both accounting costs and implicit costs. 
C) An explicit cost is a cost that involves spending money. 
D) Economists consider all costs to be implicit costs. 
A) An implicit cost is a nonmonetary opportunity cost. 
B) Economic costs include both accounting costs and implicit costs. 
C) An explicit cost is a cost that involves spending money. 
D) Economists consider all costs to be implicit costs.

Question 20

Explain why the marginal cost of production must increase if the marginal product of a variable resource is decreasing.

Accepted Answer

Consider a variable input such as labor.

If production displays diseconomies of scale,the long run average cost curve is

Which of the following statements is false?

If a firm experiences diminishing returns its marginal product must be negative.

Sam Lewis owns a firm in New York City's garment district.If Sam keeps adding workers to use the same number of sewing machines,eventually the workplace will become so crowded that workers will get in each other's way.At this point

Which of the following statements best describes the economic short run?

Which of the following is an example of market "production," as used by economist?

Increases in the marginal product of labor result from

If an airport decides to expand by building an additional passenger terminal,and in doing so it lowers its average cost per airplane landing,then the expansion would provide ________ to the airlines.

In the short-run,changes in output can only be brought about by a change in the quantity of variable inputs.

Accounting costs exclude implicit costs.

Is it possible for average total cost to be decreasing over a range of output where marginal cost is increasing? Briefly explain.

Which of the following is true at the output level where average total cost is at its minimum?

Vipsana's Gyros House sells gyros.The cost of ingredients (pita,meat,spices,etc.)to make a gyro is $2.00.Vipsana pays her employees $60 per day.She also incurs a fixed cost of $120 per day.Calculate Vipsana's average fixed cost per day when she produces 50 gyros using two workers?

When a firm experiences negative technological change it can produce the same output with fewer inputs.

Which of the following is a reason why a firm would experience diseconomies of scale?

If fixed costs do not change,then marginal cost

The rules of accounting generally require that costs be used for purposes of keeping a company's financial records and for paying taxes.These costs are sometimes called costs.

In the short run,marginal product of labor increases at first and then falls because

Which of the following statements is false?

Explain why the marginal cost of production must increase if the marginal product of a variable resource is decreasing.

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

Exam 8: Technology, production, and Costs

If production displays diseconomies of scale,the long run average cost curve is

Which of the following statements is false?

If a firm experiences diminishing returns its marginal product must be negative.

Sam Lewis owns a firm in New York City's garment district.If Sam keeps adding workers to use the same number of sewing machines,eventually the workplace will become so crowded that workers will get in each other's way.At this point

Which of the following statements best describes the economic short run?

Which of the following is an example of market "production," as used by economist?

Increases in the marginal product of labor result from

If an airport decides to expand by building an additional passenger terminal,and in doing so it lowers its average cost per airplane landing,then the expansion would provide ________ to the airlines.

In the short-run,changes in output can only be brought about by a change in the quantity of variable inputs.

Accounting costs exclude implicit costs.

Is it possible for average total cost to be decreasing over a range of output where marginal cost is increasing? Briefly explain.

Which of the following is true at the output level where average total cost is at its minimum?

Vipsana's Gyros House sells gyros.The cost of ingredients (pita,meat,spices,etc.)to make a gyro is $2.00.Vipsana pays her employees $60 per day.She also incurs a fixed cost of $120 per day.Calculate Vipsana's average fixed cost per day when she produces 50 gyros using two workers?

When a firm experiences negative technological change it can produce the same output with fewer inputs.

Which of the following is a reason why a firm would experience diseconomies of scale?

If fixed costs do not change,then marginal cost

The rules of accounting generally require that ________ costs be used for purposes of keeping a company's financial records and for paying taxes.These costs are sometimes called ________ costs.

In the short run,marginal product of labor increases at first and then falls because

Which of the following statements is false?

Explain why the marginal cost of production must increase if the marginal product of a variable resource is decreasing.

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

The rules of accounting generally require that costs be used for purposes of keeping a company's financial records and for paying taxes.These costs are sometimes called costs.