Question 1

If,when a firm doubles all its inputs,its average cost of production increases,then production displays

Accepted Answer

A) diminishing returns. 
B) economies of scale. 
C) diseconomies of scale. 
D) declining fixed costs. 
A) diminishing returns. 
B) economies of scale. 
C) diseconomies of scale. 
D) declining fixed costs.

Question 2

As output increases,the distance between average total cost and average variable cost increases.

Accepted Answer

A) True 
 B)False

Question 3

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 total cost per day when she produces 50 gyros using two workers?

Accepted Answer

A) $100 
B) $124.40 
C) $220 
D) $340 
A) $100 
B) $124.40 
C) $220 
D) $340

Question 4

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.What is Vipsana's total cost per day when she does not produce any gyros and does not hire any workers?

Accepted Answer

A) $0 
B) $2 
C) $60 
D) $120 
A) $0 
B) $2 
C) $60 
D) $120

Question 5

Table 8-3
 $$\begin{array} { | c | c | c | c | } 
\hline \begin{array} { c } 
\text { Quantity of } \
\text { Workers }
\end{array} & \begin{array} { c } 
\text { Quantity of } \
\text { Boxes }
\end{array} & \begin{array} { c } 
\text { Marginal } \
\text { Product of } \
\text { Labor }
\end{array} & \begin{array} { c } 
\text { Average } \
\text { Product of } \
\text { Labor }
\end{array} \
\hline 0 & 0 & \cdots & \cdots \
\hline 1 & 50 & & \
\hline 2 & 200 & & \
\hline 3 & 240 & & \
\hline 4 & 264 & & \
\hline 5 & 284 & & \
\hline
\end{array}$$
-Refer to Table 8-3.The table above refers to the relationship between the quantity of workers employed and the number of cardboard boxes produced per day by Manny's House of Boxes.The capital used to produce the boxes is fixed.Diminishing returns to labor are first observed in this example after Manny hires the ________ worker.

Accepted Answer

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

Question 6

Figure 8-5
  
-Refer to Figure 8-5.Identify the curves in the diagram.

Accepted Answer

A) E = average fixed cost curve; F = variable cost curve; G = total cost curve, H = marginal cost curve 
B) E = marginal cost curve; F = total cost curve; G = variable cost curve, H = average fixed cost curve 
C) E = average fixed cost curve; F = average total cost curve; G = average variable cost curve, H = marginal cost curve 
D) E = marginal cost curve; F = average total cost curve; G = average variable cost curve; H = average fixed cost curve. 
A) E = average fixed cost curve; F = variable cost curve; G = total cost curve, H = marginal cost curve 
B) E = marginal cost curve; F = total cost curve; G = variable cost curve, H = average fixed cost curve 
C) E = average fixed cost curve; F = average total cost curve; G = average variable cost curve, H = marginal cost curve 
D) E = marginal cost curve; F = average total cost curve; G = average variable cost curve; H = average fixed cost curve.

Question 7

If a producer is not able to expand its plant capacity immediately,it is

Accepted Answer

A) bankrupt. 
B) operating in the long run. 
C) operating in the short run. 
D) losing money. 
A) bankrupt. 
B) operating in the long run. 
C) operating in the short run. 
D) losing money.

Question 8

Table 8-7
 $$\begin{array} { | c | c | c | c | c | } 
\hline \begin{array} { c } 
\text { Quantity of } \
\text { Lanterns }
\end{array} & \begin{array} { c } 
\text { Fixed Cost } \
\text { (dollars) }
\end{array} & \begin{array} { c } 
\text { Variable Cost } \
\text { (dollars) }
\end{array} & \begin{array} { c } 
\text { Total Cost } \
\text { (dollars) }
\end{array} & \begin{array} { c } 
\text { Average Total } \
\text { Cost (dollars) }
\end{array} \
\hline 75 & 200 & 170 & 370 & 4.93 \
\hline 80 & 200 & 230 & 430 & 5.36 \
\hline 90 & 200 & & & 7.67 \
\hline 100 & 200 & 810 & & \
\hline 115 & 200 & & & 11.8 \
\hline 117 & 200 & 1264 & 1464 & 12.5 \
\hline 120 & 200 & 1480 & & \
\hline
\end{array}$$ 
Table 8-7 shows cost data for Lotus Lanterns, a producer of whimsical night lights.
-Refer to Table 8-7.What is the average total cost of production when the firm produces 120 lanterns?

Accepted Answer

A) $1,680 
B) $72 
C) $14 
D) $12.3 
A) $1,680 
B) $72 
C) $14 
D) $12.3

Question 9

An avocado orchard employs five full-time workers.Currently,the average product of labor is 120 pounds of avocados per day.The orchard hires a 6th full-time worker and his marginal product is 150 pounds of avocados.The average product of the six workers will now be

Accepted Answer

A) more than 120 pounds. 
B) less than 120 pounds. 
C) equal to 120 pounds. 
D) less than the marginal product of labor. 
A) more than 120 pounds. 
B) less than 120 pounds. 
C) equal to 120 pounds. 
D) less than the marginal product of labor.

Question 10

If average product is decreasing,then marginal product must be negative.

Accepted Answer

A) True 
 B)False

Question 11

The total cost schedule shows the relationship between different amounts of inputs and the resulting level of output.

Accepted Answer

A) True 
 B)False

Question 12

Figure 8-7
   
Figure 8-7 shows the cost structure for a firm.
-Refer to Figure 8-7.When the output level is 100 units average fixed cost is

Accepted Answer

A) $10. 
B) $8. 
C) $5. 
D) This cannot be determined from the diagram. 
A) $10. 
B) $8. 
C) $5. 
D) This cannot be determined from the diagram.

Question 13

Minimum efficient scale is defined as the level of output at which

Accepted Answer

A) all economies of scale are exhausted. 
B) diminishing returns affect average total cost. 
C) the firm's long-run average total cost starts falling. 
D) the maximum output is produced. 
A) all economies of scale are exhausted. 
B) diminishing returns affect average total cost. 
C) the firm's long-run average total cost starts falling. 
D) the maximum output is produced.

Question 14

Figure 8-7
   
Figure 8-7 shows the cost structure for a firm.
-Refer to Figure 8-7.When output level is 100,what is the total cost of production?

Accepted Answer

A) $20 
B) $1,000 
C) $1,200 
D) $2,000 
A) $20 
B) $1,000 
C) $1,200 
D) $2,000

Question 15

If,when a firm doubles all its inputs,its average cost of production decreases,then production displays

Accepted Answer

A) diminishing returns. 
B) economies of scale. 
C) diseconomies of scale. 
D) declining fixed costs. 
A) diminishing returns. 
B) economies of scale. 
C) diseconomies of scale. 
D) declining fixed costs.

Question 16

If a firm's long-run average total curve shows that it can produce 5,000 DVDs at an average cost of $2.00 and 15,000 DVDs at an average cost of $1.50 this is evidence of

Accepted Answer

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

If,when a firm doubles all its inputs,its average cost of production increases,then production displays

As output increases,the distance between average total cost and average variable cost increases.

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 total cost per day when she produces 50 gyros using two workers?

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.What is Vipsana's total cost per day when she does not produce any gyros and does not hire any workers?

Figure 8-5 -Refer to Figure 8-5.Identify the curves in the diagram.

If a producer is not able to expand its plant capacity immediately,it is

An avocado orchard employs five full-time workers.Currently,the average product of labor is 120 pounds of avocados per day.The orchard hires a 6th full-time worker and his marginal product is 150 pounds of avocados.The average product of the six workers will now be

If average product is decreasing,then marginal product must be negative.

The total cost schedule shows the relationship between different amounts of inputs and the resulting level of output.

Figure 8-7 Figure 8-7 shows the cost structure for a firm. -Refer to Figure 8-7.When the output level is 100 units average fixed cost is

Minimum efficient scale is defined as the level of output at which

Figure 8-7 Figure 8-7 shows the cost structure for a firm. -Refer to Figure 8-7.When output level is 100,what is the total cost of production?

If,when a firm doubles all its inputs,its average cost of production decreases,then production displays

If a firm's long-run average total curve shows that it can produce 5,000 DVDs at an average cost of $2.00 and 15,000 DVDs at an average cost of $1.50 this is evidence of

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

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Exam 8: Technology, production, and Costs

If,when a firm doubles all its inputs,its average cost of production increases,then production displays

As output increases,the distance between average total cost and average variable cost increases.

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 total cost per day when she produces 50 gyros using two workers?

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.What is Vipsana's total cost per day when she does not produce any gyros and does not hire any workers?

Figure 8-5 -Refer to Figure 8-5.Identify the curves in the diagram.

If a producer is not able to expand its plant capacity immediately,it is

An avocado orchard employs five full-time workers.Currently,the average product of labor is 120 pounds of avocados per day.The orchard hires a 6th full-time worker and his marginal product is 150 pounds of avocados.The average product of the six workers will now be

If average product is decreasing,then marginal product must be negative.

The total cost schedule shows the relationship between different amounts of inputs and the resulting level of output.

Figure 8-7 Figure 8-7 shows the cost structure for a firm. -Refer to Figure 8-7.When the output level is 100 units average fixed cost is

Minimum efficient scale is defined as the level of output at which

Figure 8-7 Figure 8-7 shows the cost structure for a firm. -Refer to Figure 8-7.When output level is 100,what is the total cost of production?

If,when a firm doubles all its inputs,its average cost of production decreases,then production displays

If a firm's long-run average total curve shows that it can produce 5,000 DVDs at an average cost of $2.00 and 15,000 DVDs at an average cost of $1.50 this is evidence of

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

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