Question 1

Figure 11-12
  
-Refer to Figure 11-12.Which of the following statements about the input combinations shown in the diagram is false?

Accepted Answer

A) The firm produces a higher output level when it uses input combination b compared to input combination a. 
B) The firm produces a lower output level when it uses input combination d compared to input combination a. 
C) The firm produces the same output level when it uses input combination a or c. 
D) The firm incurs the same total cost when it uses input combination a or c to produce a given quantity of output. 
A) The firm produces a higher output level when it uses input combination b compared to input combination a. 
B) The firm produces a lower output level when it uses input combination d compared to input combination a. 
C) The firm produces the same output level when it uses input combination a or c. 
D) The firm incurs the same total cost when it uses input combination a or c to produce a given quantity of output.

Question 2

Marginal cost is calculated for a particular increase in output by

Accepted Answer

A) multiplying the total cost by the change in output. 
B) multiplying the change in total cost by the change in output. 
C) dividing the total cost by the change in output. 
D) dividing the change in total cost by the change in output. 
A) multiplying the total cost by the change in output. 
B) multiplying the change in total cost by the change in output. 
C) dividing the total cost by the change in output. 
D) dividing the change in total cost by the change in output.

Question 3

Figure 11-18
  
-Refer to Figure 11-18.Starting from point E, a movement along the isocost to point F

Accepted Answer

A) decreases the total cost of production but not output. 
B) increases the total cost of production and decreases output. 
C) decreases both the total cost of production and output. 
D) decreases output but not the total cost of production. 
A) decreases the total cost of production but not output. 
B) increases the total cost of production and decreases output. 
C) decreases both the total cost of production and output. 
D) decreases output but not the total cost of production.

Question 4

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

Accepted Answer

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

Question 5

An isoquant shows

Accepted Answer

A) the combinations of two goods that yield the same total satisfaction. 
B) the combinations of two inputs that yield the same total product. 
C) the combinations of two inputs that cost the same total quantity of money. 
D) the combination of two goods that cost the same amount of money. 
A) the combinations of two goods that yield the same total satisfaction. 
B) the combinations of two inputs that yield the same total product. 
C) the combinations of two inputs that cost the same total quantity of money. 
D) the combination of two goods that cost the same amount of money.

Question 6

Figure 11-1
  
-Refer to Figure 11-1.If the marginal product of labor curve was plotted on this figure, with marginal product on the vertical axis, the marginal product of labor curve would

Accepted Answer

A) never intersect the horizontal axis. 
B) intersect the horizontal axis at a point between the 5th and 6th unit of labor. 
C) intersect the horizontal axis at a point between the 6th and 7th unit of labor. 
D) intersect the horizontal axis at a point somewhere beyond the 8th unit of labor. 
A) never intersect the horizontal axis. 
B) intersect the horizontal axis at a point between the 5th and 6th unit of labor. 
C) intersect the horizontal axis at a point between the 6th and 7th unit of labor. 
D) intersect the horizontal axis at a point somewhere beyond the 8th unit of labor.

Question 7

At the minimum efficient scale

Accepted Answer

A) all possible economies of scale have not been exhausted. 
B) the firm has achieved the lowest possible average cost of production. 
C) any increases in the scale of operation will encounter further economies of scale. 
D) marginal cost is at its minimum. 
A) all possible economies of scale have not been exhausted. 
B) the firm has achieved the lowest possible average cost of production. 
C) any increases in the scale of operation will encounter further economies of scale. 
D) marginal cost is at its minimum.

Question 8

The ABC Company manufactures routers that are used to provide high-speed Internet service.ABC sells an average of 1,000 routers each month, but to exhaust economies of scale in its industry ABC would have to sell 3,000 routers each month.Therefore,

Accepted Answer

A) ABC is experiencing diseconomies of scale. 
B) ABC is experiencing diminishing returns. 
C) to reach minimum efficient scale ABC would have to sell at least 3,000 routers each month. 
D) ABC will soon go out of business. 
A) ABC is experiencing diseconomies of scale. 
B) ABC is experiencing diminishing returns. 
C) to reach minimum efficient scale ABC would have to sell at least 3,000 routers each month. 
D) ABC will soon go out of business.

Question 9

Figure 11-7
   
Figure 11-7 shows the cost structure for a firm.
-Refer to Figure 11-7.When output level is 100, what is the total cost of production?

Accepted Answer

A) $20 
B) $800 
C) $1,200 
D) $2,000 
A) $20 
B) $800 
C) $1,200 
D) $2,000

Question 10

To improve the work environment for its engineers, Segment.com rearranged its work areas to move the engineers to the quietest area of its building, and moved its sales and marketing force to to the loudest area.The result was an increase in output equivalent to hiring 10 to 15 additional workers.Which of the following statements best describes this change at Segment.com?

Accepted Answer

A) The change implemented is not an example of technological change because it did not require the use of new machinery or equipment. 
B) Technological change refers only to the introduction of new products or improvements to existing products. As such, the scenario described in the question is not technological change. 
C) The firm is able to produce more output using the same number of inputs. Therefore, Segment.com has implemented a positive technological change. 
D) The scenario described is an example of management efficiency and not technological change. Essentially, the firm changed its way of operating its business. 
A) The change implemented is not an example of technological change because it did not require the use of new machinery or equipment. 
B) Technological change refers only to the introduction of new products or improvements to existing products. As such, the scenario described in the question is not technological change. 
C) The firm is able to produce more output using the same number of inputs. Therefore, Segment.com has implemented a positive technological change. 
D) The scenario described is an example of management efficiency and not technological change. Essentially, the firm changed its way of operating its business.

Question 11

The law of diminishing marginal returns

Accepted Answer

A) explains why the average total cost and marginal cost curves are U-shaped in the short run. 
B) explains why the average total cost, average fixed cost, and the marginal cost curves are U-shaped in the short run. 
C) causes average total cost to rise at a decreasing rate as output increases. 
D) causes the difference between average total cost and average variable cost to get smaller as output increases. 
A) explains why the average total cost and marginal cost curves are U-shaped in the short run. 
B) explains why the average total cost, average fixed cost, and the marginal cost curves are U-shaped in the short run. 
C) causes average total cost to rise at a decreasing rate as output increases. 
D) causes the difference between average total cost and average variable cost to get smaller as output increases.

Question 12

Maximizing the level of output for a given total cost of production

Accepted Answer

A) is equivalent to producing the profit-maximizing output level. 
B) is equivalent to minimizing cost for a given level of output. 
C) necessitates using only relatively low-priced inputs. 
D) will maximize total revenue. 
A) is equivalent to producing the profit-maximizing output level. 
B) is equivalent to minimizing cost for a given level of output. 
C) necessitates using only relatively low-priced inputs. 
D) will maximize total revenue.

Question 13

Figure 11-11
   
Figure 11-11 illustrates the long-run average cost curve for a firm that produces picture frames. The graph also includes short-run average cost curves for three firm sizes: ATCₐ, ATCb and ATCc.
-Refer to Figure 11-11.If the firm chooses to produce and sell 25,000 frames per month by operating in the short run with a scale operation represented by ATCc ,

Accepted Answer

A) the firm will not be operating efficiently. 
B) the firm will be operating efficiently. 
C) the firm would lower its average costs by reducing its scale of operation. 
D) the firm will not be able to earn a profit. 
A) the firm will not be operating efficiently. 
B) the firm will be operating efficiently. 
C) the firm would lower its average costs by reducing its scale of operation. 
D) the firm will not be able to earn a profit.

Question 14

Table 11-5
  
-Refer to Table 11-5.Suzette's Fancy Packaging subcontracts with Sunshineland Pecans to box dried fruit and nuts for Suzette's mail order business.Suzette rents space for her factory for $400 a week in a nearby strip mall.She can hire temporary workers for $200 a week.Table 11-5 above shows her output and cost data.Use the table to answer questions a-e.
a.Complete the table.
b.In the last week of summer Suzette closes her business to go on a family vacation.What are her costs during that week?
c.In one week Suzette exactly breaks even.If her revenue for the week is $1,200, how many boxes of fruit and nuts did she produce?
d.Judging from the marginal product of labor data, would you say that Suzette had to settle for increasingly unproductive workers? Explain your answer.
e.Suzette has received an order for 1,500 boxes of nuts per week for the next 3 months.If she expects the trend in the marginal product of labor will continue in the same direction, what do you think she should do? Should she not commit until she can move to a larger space or should she just hire more workers? Explain your answer.

Accepted Answer

a. @#IMG-DLM& 
b.$400
c.840 boxes
d.Diminishing ma

Question 15

The process a firm uses to turn inputs into outputs of goods and services is called technology.

Accepted Answer

A) True 
 B)False

Question 16

Suppose a firm uses labor and capital to produce output.The last unit of labor hired has a marginal product of 12 units of output, and the last unit of capital employed has a marginal product of 20 units.Use the optimal combination of inputs rule to calculate the price of capital if the price of labor is $6 per unit.The price of capital is

Accepted Answer

A) $2. 
B) $10. 
C) $20. 
D) impossible to determine with the information given. 
A) $2. 
B) $10. 
C) $20. 
D) impossible to determine with the information given.

Question 17

Suppose the price of capital and labor remain constant.As a firm's expenditures for capital and labor increase, its isocost line

Accepted Answer

A) shifts out parallel to the original isocost line. 
B) shifts in parallel to the original isocost line. 
C) rotates outward on the Y-intercept. 
D) rotates outward on the X-intercept. 
A) shifts out parallel to the original isocost line. 
B) shifts in parallel to the original isocost line. 
C) rotates outward on the Y-intercept. 
D) rotates outward on the X-intercept.

Question 18

Fill in the missing values in the following table.Draw one graph showing how total output increases with the quantity of workers hired, and another graph showing the marginal product of labor and the average product of labor.

Accepted Answer

The answer of Fill in the missing values in the...

Question 19

The Santa Fe Spark Plug Company supplies spark plugs to automotive parts dealers.An increase in the demand for its product led Santa Fe to hire 150 new workers.Santa Fe also plans to expand the capacity of its plant but this project will take 2 years to complete.Which of the following statements is true?

Accepted Answer

A) The wages and benefits paid to the new workers are implicit costs. 
B) The long run for Santa Fe is longer than 1 year. 
C) The short run for Santa Fe is 1 year. 
D) In the short run Santa Fe's variable costs increase but its fixed costs decrease. 
A) The wages and benefits paid to the new workers are implicit costs. 
B) The long run for Santa Fe is longer than 1 year. 
C) The short run for Santa Fe is 1 year. 
D) In the short run Santa Fe's variable costs increase but its fixed costs decrease.

Question 20

What is the marginal product of labor and what is the average product of labor.

Accepted Answer

The marginal product of labor is the add

Figure 11-12 -Refer to Figure 11-12.Which of the following statements about the input combinations shown in the diagram is false?

Marginal cost is calculated for a particular increase in output by

Figure 11-18 -Refer to Figure 11-18.Starting from point E, a movement along the isocost to point F

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

An isoquant shows

Figure 11-1 -Refer to Figure 11-1.If the marginal product of labor curve was plotted on this figure, with marginal product on the vertical axis, the marginal product of labor curve would

At the minimum efficient scale

The ABC Company manufactures routers that are used to provide high-speed Internet service.ABC sells an average of 1,000 routers each month, but to exhaust economies of scale in its industry ABC would have to sell 3,000 routers each month.Therefore,

Figure 11-7 Figure 11-7 shows the cost structure for a firm. -Refer to Figure 11-7.When output level is 100, what is the total cost of production?

The law of diminishing marginal returns

Maximizing the level of output for a given total cost of production

The process a firm uses to turn inputs into outputs of goods and services is called technology.

Suppose the price of capital and labor remain constant.As a firm's expenditures for capital and labor increase, its isocost line

Fill in the missing values in the following table.Draw one graph showing how total output increases with the quantity of workers hired, and another graph showing the marginal product of labor and the average product of labor.

What is the marginal product of labor and what is the average product of labor.

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

Figure 11-12 -Refer to Figure 11-12.Which of the following statements about the input combinations shown in the diagram is false?

Marginal cost is calculated for a particular increase in output by

Figure 11-18 -Refer to Figure 11-18.Starting from point E, a movement along the isocost to point F

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

An isoquant shows

Figure 11-1 -Refer to Figure 11-1.If the marginal product of labor curve was plotted on this figure, with marginal product on the vertical axis, the marginal product of labor curve would

At the minimum efficient scale

The ABC Company manufactures routers that are used to provide high-speed Internet service.ABC sells an average of 1,000 routers each month, but to exhaust economies of scale in its industry ABC would have to sell 3,000 routers each month.Therefore,

Figure 11-7 Figure 11-7 shows the cost structure for a firm. -Refer to Figure 11-7.When output level is 100, what is the total cost of production?

The law of diminishing marginal returns

Maximizing the level of output for a given total cost of production

The process a firm uses to turn inputs into outputs of goods and services is called technology.

Suppose the price of capital and labor remain constant.As a firm's expenditures for capital and labor increase, its isocost line

Fill in the missing values in the following table.Draw one graph showing how total output increases with the quantity of workers hired, and another graph showing the marginal product of labor and the average product of labor.

What is the marginal product of labor and what is the average product of labor.

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