Question 1

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

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 2

The slope of an isocost line determines the marginal rate of substitution.

Accepted Answer

A) True 
 B)False

Question 3

Average total cost is

Accepted Answer

A) total cost divided by the quantity of output produced. 
B) total explicit costs divided by the quantity of output produced. 
C) variable cost divided by the quantity of output produced. 
D) the change in fixed plus variable cost divided by the quantity of output produced. 
A) total cost divided by the quantity of output produced. 
B) total explicit costs divided by the quantity of output produced. 
C) variable cost divided by the quantity of output produced. 
D) the change in fixed plus variable cost divided by the quantity of output produced.

Question 4

Consider a manufacturing operation that uses specialized machinery and labor to produce its output.In this case, the input that is not fixed in the short run is labor.

Accepted Answer

A) True 
 B)False

Question 5

Minimum efficient scale is defined as the level of output at which the short-run average total cost stops decreasing.

Accepted Answer

A) True 
 B)False

Question 6

Firms in different countries that face different input prices may produce the same good using different combinations of inputs, even though they have access to the same technology.

Accepted Answer

A) True 
 B)False

Question 7

Table 11-4
  
-Refer to Table 11-4.The table above shows the following relationship between hours spent fishing and the quantity of fish caught for Juan, a commercial fisherman.
a.Complete the Marginal Product column in Table 11-4.
b.Characterize the production function, i.e.does the production function display increasing marginal returns, diminishing marginal returns, etc.
c.Using the data above, graph Juan's marginal product curve.Be sure to label the horizontal and vertical axes.Is your graph consistent with your answer to part (b)? Explain.
d.Juan uses the following inputs for fishing - a small wooden boat (B), a fishing pole (P)and of course, his labor (L).Treating the boat and the fishing pole as fixed inputs and using the data above, graph Juan's Total Product of Labor curve.Be sure to label the horizontal and vertical axes.
e.The opportunity cost of Juan's time is $8 per hour.If Juan receives $2 per pound for his fish, what is the optimal number of hours he should spend fishing? Explain how you arrived at your answer.Hint: Recall marginal benefit and marginal cost analysis.

Accepted Answer

a. @#IMG-DLM& 
b.The production displays diminishi

Question 8

Accounting costs exclude implicit costs.

Accepted Answer

A) True 
 B)False

Question 9

The division of labor and specialization explain

Accepted Answer

A) why, when the marginal product of labor increases, so does the average product of labor. 
B) why the average product of labor falls when firms use more capital or change the layout of their businesses. 
C) why the marginal product of labor rises as a firm hires its first units of labor. 
D) why firms may find it profitable to use more workers when the marginal product of labor is negative. 
A) why, when the marginal product of labor increases, so does the average product of labor. 
B) why the average product of labor falls when firms use more capital or change the layout of their businesses. 
C) why the marginal product of labor rises as a firm hires its first units of labor. 
D) why firms may find it profitable to use more workers when the marginal product of labor is negative.

Question 10

Table 11-2
   
Table 11-2 summarizes production at the Crunchy Apple Orchard for the month of April.
-Refer to Table 11-2.What is the marginal product of the 4th worker?

Accepted Answer

A) 230 bushels 
B) 57.4 bushels 
C) 50 bushels 
D) 12.4 bushels 
A) 230 bushels 
B) 57.4 bushels 
C) 50 bushels 
D) 12.4 bushels

Question 11

Figure 11-6
   
Figure 11-6 contains information about the short-run cost structure of a firm.
-Refer to Figure 11-6.In the figure above, which letter represents the marginal cost curve?

Accepted Answer

A) A 
B) B 
C) C 
D) D 
A) A 
B) B 
C) C 
D) D

Question 12

If the 15th unit of output has a marginal cost of $29.50 and the average cost of producing 14 units of output is $30.23, what will happen to the average cost of production if the 15th unit is produced?

Accepted Answer

A) Average cost increases as more is produced. 
B) Average cost will fall. 
C) Average cost could increase or decrease depending on what happens to variable cost. 
D) Average cost could increase or decrease depending on what happens to fixed cost. 
A) Average cost increases as more is produced. 
B) Average cost will fall. 
C) Average cost could increase or decrease depending on what happens to variable cost. 
D) Average cost could increase or decrease depending on what happens to fixed cost.

Question 13

If 11 workers can produce 53 units of output while 12 workers can produce 56 units of output, what is the marginal product of the 12th worker?

Accepted Answer

A) 0.16 
B) 3 
C) 4.67 
D) 36 
A) 0.16 
B) 3 
C) 4.67 
D) 36

Question 14

The long-run average cost curve shows

Accepted Answer

A) the lowest average cost of producing every level of output in the long run. 
B) where the most profitable level of output occurs. 
C) the average cost of producing where diminishing returns are not present. 
D) the plant size or scale that the firm should build. 
A) the lowest average cost of producing every level of output in the long run. 
B) where the most profitable level of output occurs. 
C) the average cost of producing where diminishing returns are not present. 
D) the plant size or scale that the firm should build.

Question 15

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 16

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) labor 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) labor 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 17

An explicit cost is defined as

Accepted Answer

A) a cost that does not change as output changes. 
B) a nonmonetary opportunity cost. 
C) a cost that involves spending money. 
D) a nonmonetary accounting cost. 
A) a cost that does not change as output changes. 
B) a nonmonetary opportunity cost. 
C) a cost that involves spending money. 
D) a nonmonetary accounting cost.

Question 18

A curve that shows all the combinations of two inputs, such as labor and capital, that will produce the same level of output is called

Accepted Answer

A) an isoquant. 
B) an isocost line 
C) a budget line. 
D) an optimal input combination curve. 
A) an isoquant. 
B) an isocost line 
C) a budget line. 
D) an optimal input combination curve.

Question 19

A characteristic of the long run that is not available in the short run is that a firm is free to vary its output.

Accepted Answer

A) True 
 B)False

Question 20

Golda Rush quit her job as a manager for Home Depot to start her own hair dressing salon, Goldilocks.She gave up a salary of $40,000 per year, invested her savings of $30,000 (which was earning 5 percent interest)and borrowed $10,000 from a close friend, agreeing to pay 5 percent interest per year.In her first year, Golda spent $18,000 to rent a salon, hired a part-time assistant for $12,000 and incurred another $15,000 in expenses on equipment and hairdressing material.Based on this information, what is the amount of her implicit costs for the first year?

Accepted Answer

A) $80,000 
B) $70,000 
C) $42,000 
D) $41,500 
A) $80,000 
B) $70,000 
C) $42,000 
D) $41,500

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

The slope of an isocost line determines the marginal rate of substitution.

Average total cost is

Consider a manufacturing operation that uses specialized machinery and labor to produce its output.In this case, the input that is not fixed in the short run is labor.

Minimum efficient scale is defined as the level of output at which the short-run average total cost stops decreasing.

Firms in different countries that face different input prices may produce the same good using different combinations of inputs, even though they have access to the same technology.

Accounting costs exclude implicit costs.

The division of labor and specialization explain

Table 11-2 Table 11-2 summarizes production at the Crunchy Apple Orchard for the month of April. -Refer to Table 11-2.What is the marginal product of the 4th worker?

Figure 11-6 Figure 11-6 contains information about the short-run cost structure of a firm. -Refer to Figure 11-6.In the figure above, which letter represents the marginal cost curve?

If the 15th unit of output has a marginal cost of $29.50 and the average cost of producing 14 units of output is $30.23, what will happen to the average cost of production if the 15th unit is produced?

If 11 workers can produce 53 units of output while 12 workers can produce 56 units of output, what is the marginal product of the 12th worker?

The long-run average cost curve shows

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

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

An explicit cost is defined as

A curve that shows all the combinations of two inputs, such as labor and capital, that will produce the same level of output is called

A characteristic of the long run that is not available in the short run is that a firm is free to vary its output.

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

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Filters

Exam 11: Technology, Production, and Costs

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

The slope of an isocost line determines the marginal rate of substitution.

Average total cost is

Consider a manufacturing operation that uses specialized machinery and labor to produce its output.In this case, the input that is not fixed in the short run is labor.

Minimum efficient scale is defined as the level of output at which the short-run average total cost stops decreasing.

Firms in different countries that face different input prices may produce the same good using different combinations of inputs, even though they have access to the same technology.

Accounting costs exclude implicit costs.

The division of labor and specialization explain

Table 11-2 Table 11-2 summarizes production at the Crunchy Apple Orchard for the month of April. -Refer to Table 11-2.What is the marginal product of the 4th worker?

Figure 11-6 Figure 11-6 contains information about the short-run cost structure of a firm. -Refer to Figure 11-6.In the figure above, which letter represents the marginal cost curve?

If the 15th unit of output has a marginal cost of $29.50 and the average cost of producing 14 units of output is $30.23, what will happen to the average cost of production if the 15th unit is produced?

If 11 workers can produce 53 units of output while 12 workers can produce 56 units of output, what is the marginal product of the 12th worker?

The long-run average cost curve shows

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

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

An explicit cost is defined as

A curve that shows all the combinations of two inputs, such as labor and capital, that will produce the same level of output is called

A characteristic of the long run that is not available in the short run is that a firm is free to vary its output.

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

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Filters