Question 1

Ford Motor Company started producing the Model A at plants scattered around the United States

Accepted Answer

A) to save on transport costs. 
B) because diseconomies of scale at its initial River Rouge plant resulted in high production costs. 
C) to locate its production centers closer to its customers. 
D) because it was not able to attract skilled workers in Michigan (where its first plant was located). 
A) to save on transport costs. 
B) because diseconomies of scale at its initial River Rouge plant resulted in high production costs. 
C) to locate its production centers closer to its customers. 
D) because it was not able to attract skilled workers in Michigan (where its first plant was located).

Question 2

The relationship between the inputs employed by a firm and the maximum output that it can produce with those inputs is the firm's

Accepted Answer

A) production function. 
B) supply curve, or supply schedule. 
C) marginal product of labor. 
D) average product of labor. 
A) production function. 
B) supply curve, or supply schedule. 
C) marginal product of labor. 
D) average product of labor.

Question 3

Are the costs of utilities always fixed, always variable, or can they be both? Briefly explain.

Accepted Answer

For many firms, the cost of utilities ca

Question 4

The level of output at which all economies of scale have been exhausted is known as

Accepted Answer

A) constant returns to scale. 
B) minimum efficient scale. 
C) the economically efficient output level. 
D) optimal economic size. 
A) constant returns to scale. 
B) minimum efficient scale. 
C) the economically efficient output level. 
D) optimal economic size.

Question 5

When the marginal product of labor rises

Accepted Answer

A) the marginal cost of production will exceed the average total cost. 
B) the marginal cost of production also rises. 
C) the marginal cost of production falls. 
D) the average total cost of production also rises. 
A) the marginal cost of production will exceed the average total cost. 
B) the marginal cost of production also rises. 
C) the marginal cost of production falls. 
D) the average total cost of production also rises.

Question 6

A characteristic of the long run is

Accepted Answer

A) there are fixed inputs. 
B) all inputs can be varied. 
C) plant capacity cannot be increased or decreased. 
D) there are both fixed and variable inputs 
A) there are fixed inputs. 
B) all inputs can be varied. 
C) plant capacity cannot be increased or decreased. 
D) there are both fixed and variable inputs

Question 7

The marginal rate of technical substitution is

Accepted Answer

A) the rate at which a firm is able to substitute one input for another, while keeping total cost constant. 
B) the rate at which a firm is able to substitute one input for another, while keeping the level of output constant. 
C) the rate at which a firm is able to institute positive technological changes to its production process. 
D) the rate at which a firm is able to increase its output by replacing labor with technology. 
A) the rate at which a firm is able to substitute one input for another, while keeping total cost constant. 
B) the rate at which a firm is able to substitute one input for another, while keeping the level of output constant. 
C) the rate at which a firm is able to institute positive technological changes to its production process. 
D) the rate at which a firm is able to increase its output by replacing labor with technology.

Question 8

When UPS implemented changes which allowed it to deliver more packages with the same number of workers and planes, this represented a positive technological change.

Accepted Answer

A) True 
 B)False

Question 9

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 10

Which of the following are implicit costs for a typical firm?

Accepted Answer

A) opportunity costs of capital owned and used by the firm 
B) the cost of labor hired by the firm 
C) utilities cost 
D) a business licensing fee 
A) opportunity costs of capital owned and used by the firm 
B) the cost of labor hired by the firm 
C) utilities cost 
D) a business licensing fee

Question 11

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 12

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 analys

Accepted Answer

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

Question 13

The marginal product of labor 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 14

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) it 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) it can pay its workers less yet increase its output. 
D) it sees an increase in worker productivity.

Question 15

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 explicit costs?

Accepted Answer

A) $45,000 
B) $45,500 
C) $47,000 
D) $87,000 
A) $45,000 
B) $45,500 
C) $47,000 
D) $87,000

Question 16

Figure 11-5
  
-Refer to Figure 11-5.Curve G approaches curve F because

Accepted Answer

A) marginal cost is above average variable costs. 
B) average fixed cost falls as output rises. 
C) fixed cost falls as capacity rises. 
D) total cost falls as more and more is produced. 
A) marginal cost is above average variable costs. 
B) average fixed cost falls as output rises. 
C) fixed cost falls as capacity rises. 
D) total cost falls as more and more is produced.

Question 17

Suppose the price of capital and labor remain constant but that the average educational level of workers has increased and therefore, productivity of labor increases.This would lead a firm

Accepted Answer

A) to adopt a more capital-intensive production technology. 
B) to adopt a more labor-intensive technology. 
C) to keep its output and production technology unchanged, but to use fewer units of labor. 
D) to use only labor to produce the product. 
A) to adopt a more capital-intensive production technology. 
B) to adopt a more labor-intensive technology. 
C) to keep its output and production technology unchanged, but to use fewer units of labor. 
D) to use only labor to produce the product.

Question 18

Figure 11-15
  
-Refer to Figure 11-15.Suppose Hilda hires labor at $8 per hour and capital costs $10 per unit.What is the minimum cost of producing 200 gooseberry pies?

Accepted Answer

A) $3,600 
B) $1,120 
C) $592 
D) $560 
A) $3,600 
B) $1,120 
C) $592 
D) $560

Question 19

Jill Johnson owns a pizzeria.She currently produces 10,000 pizzas per month at a total cost of $500.If she produced one more pizza her total cost rises to $500.11.What does this tell us about Jill's marginal cost of producing pizzas?

Accepted Answer

A) The marginal cost of producing pizzas is constant. 
B) The marginal cost of producing pizzas is falling. 
C) The marginal cost of producing pizzas is rising. 
D) The marginal cost of producing pizzas cannot be determined without more information. 
A) The marginal cost of producing pizzas is constant. 
B) The marginal cost of producing pizzas is falling. 
C) The marginal cost of producing pizzas is rising. 
D) The marginal cost of producing pizzas cannot be determined without more information.

Question 20

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.

Ford Motor Company started producing the Model A at plants scattered around the United States

The relationship between the inputs employed by a firm and the maximum output that it can produce with those inputs is the firm's

Are the costs of utilities always fixed, always variable, or can they be both? Briefly explain.

The level of output at which all economies of scale have been exhausted is known as

When the marginal product of labor rises

A characteristic of the long run is

The marginal rate of technical substitution is

When UPS implemented changes which allowed it to deliver more packages with the same number of workers and planes, this represented a positive technological change.

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

Which of the following are implicit costs for a typical firm?

If fixed costs do not change, then marginal cost

The marginal product of labor is defined as

A firm has successfully adopted a positive technological change when

Figure 11-5 -Refer to Figure 11-5.Curve G approaches curve F because

Suppose the price of capital and labor remain constant but that the average educational level of workers has increased and therefore, productivity of labor increases.This would lead a firm

Figure 11-15 -Refer to Figure 11-15.Suppose Hilda hires labor at $8 per hour and capital costs $10 per unit.What is the minimum cost of producing 200 gooseberry pies?

Jill Johnson owns a pizzeria.She currently produces 10,000 pizzas per month at a total cost of $500.If she produced one more pizza her total cost rises to $500.11.What does this tell us about Jill's marginal cost of producing pizzas?

The division of labor and specialization explain

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 More Realistic Setting

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

Ford Motor Company started producing the Model A at plants scattered around the United States

The relationship between the inputs employed by a firm and the maximum output that it can produce with those inputs is the firm's

Are the costs of utilities always fixed, always variable, or can they be both? Briefly explain.

The level of output at which all economies of scale have been exhausted is known as

When the marginal product of labor rises

A characteristic of the long run is

The marginal rate of technical substitution is

When UPS implemented changes which allowed it to deliver more packages with the same number of workers and planes, this represented a positive technological change.

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

Which of the following are implicit costs for a typical firm?

If fixed costs do not change, then marginal cost

The marginal product of labor is defined as

A firm has successfully adopted a positive technological change when

Figure 11-5 -Refer to Figure 11-5.Curve G approaches curve F because

Suppose the price of capital and labor remain constant but that the average educational level of workers has increased and therefore, productivity of labor increases.This would lead a firm

Figure 11-15 -Refer to Figure 11-15.Suppose Hilda hires labor at $8 per hour and capital costs $10 per unit.What is the minimum cost of producing 200 gooseberry pies?

Jill Johnson owns a pizzeria.She currently produces 10,000 pizzas per month at a total cost of $500.If she produced one more pizza her total cost rises to $500.11.What does this tell us about Jill's marginal cost of producing pizzas?

The division of labor and specialization explain

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 More Realistic Setting

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