Question 1

The slope of a typical isoquant is negative because to produce a given output, a producer

Accepted Answer

A) will use more of one input only if it uses more of another. 
B) can use less of one input only if the productivity of that input increases 
C) can use less of one input only if it uses more of another. 
D) will use more of one input only if the price of that input falls. 
A) will use more of one input only if it uses more of another. 
B) can use less of one input only if the productivity of that input increases 
C) can use less of one input only if it uses more of another. 
D) will use more of one input only if the price of that input falls.

Question 2

In the long run which of the following is true?

Accepted Answer

A) Total cost = fixed cost + variable cost. 
B) The size of a firm's physical plant can be changed but the firm cannot adopt new technology. 
C) There are no fixed costs. 
D) The firm can vary its explicit costs but not its implicit costs. 
A) Total cost = fixed cost + variable cost. 
B) The size of a firm's physical plant can be changed but the firm cannot adopt new technology. 
C) There are no fixed costs. 
D) The firm can vary its explicit costs but not its implicit costs.

Question 3

If production displays constant returns to scale, then all economies of scale have been exhausted.

Accepted Answer

A) True 
 B)False

Question 4

Some colleges now offer massive open online courses (MOOCs), where students do not need to be in the same classroom as their instructors.The fixed cost of an online course is relatively ________, but after the courses are placed online, the marginal cost of providing instruction to an additional student is ________.

Accepted Answer

A) high; low 
B) high; high 
C) low; low 
D) low; high 
A) high; low 
B) high; high 
C) low; low 
D) low; high

Question 5

Economists Cade Massey and Richard Thaler analyzed whether teams in the National Football League distributed salaries efficiently.Massey and Thaler found that

Accepted Answer

A) the first few players selected in first round of the NFL draft are paid much higher salaries relative to their marginal products than players drafted later in the first round. 
B) rookies are paid salaries greater than their marginal products; veteran players are paid salaries less than their marginal products. 
C) veteran players who sign as free agents are paid more relative to their marginal products than rookie players selected in the first round of the draft. 
D) both rookie players and veteran players are paid less than the value of their marginal products because of the lack of competition among teams. 
A) the first few players selected in first round of the NFL draft are paid much higher salaries relative to their marginal products than players drafted later in the first round. 
B) rookies are paid salaries greater than their marginal products; veteran players are paid salaries less than their marginal products. 
C) veteran players who sign as free agents are paid more relative to their marginal products than rookie players selected in the first round of the draft. 
D) both rookie players and veteran players are paid less than the value of their marginal products because of the lack of competition among teams.

Question 6

Table 11-3
  
-Refer to Table 11-3.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.The average product of labor will equal 66 boxes when Manny hires

Accepted Answer

A) the second worker. 
B) the third worker. 
C) the fourth worker. 
D) the fifth worker. 
A) the second worker. 
B) the third worker. 
C) the fourth worker. 
D) the fifth worker.

Question 7

In the long run, all of a firm's inputs are variable.

Accepted Answer

A) True 
 B)False

Question 8

Figure 11-13
  
-Refer to Figure 11-13.The lines shown in the diagram are isocost lines.If the price of labor is $50 per unit, then along the isocost AF, the total cost

Accepted Answer

A) is $500. 
B) is $750. 
C) is $1,250. 
D) cannot be determined without the price of capital. 
A) is $500. 
B) is $750. 
C) is $1,250. 
D) cannot be determined without the price of capital.

Question 9

Over the past twenty years, the number of small family farms has fallen significantly and in their place there are fewer, but larger, farms owned by corporations.Which of the following best explains this trend?

Accepted Answer

A) diseconomies of scale in farming 
B) economies of scale in farming 
C) diminishing returns to labor in farming 
D) declining productivity 
A) diseconomies of scale in farming 
B) economies of scale in farming 
C) diminishing returns to labor in farming 
D) declining productivity

Question 10

If marginal product is equal to average product, then total product is at a maximum.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following describes how output changes in the short run? Because of specialization and the division of labor, as more workers are hired

Accepted Answer

A) output will first increase at an increasing rate, then output will increase at a decreasing rate. 
B) output will first decrease at an increasing rate, then increase at a decreasing rate. 
C) the marginal product of labor will first decrease, then increase at a decreasing rate. 
D) the marginal product of labor will first be negative and then will be positive. 
A) output will first increase at an increasing rate, then output will increase at a decreasing rate. 
B) output will first decrease at an increasing rate, then increase at a decreasing rate. 
C) the marginal product of labor will first decrease, then increase at a decreasing rate. 
D) the marginal product of labor will first be negative and then will be positive.

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

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 14

When a firm's long-run average cost curve is horizontal for a range of output, then that range of production displays

Accepted Answer

A) increasing returns to scale. 
B) constant returns to scale. 
C) decreasing returns to scale. 
D) constant average fixed costs. 
A) increasing returns to scale. 
B) constant returns to scale. 
C) decreasing returns to scale. 
D) constant average fixed costs.

Question 15

If we have information about workers' marginal products, then total and average product can be found by

Accepted Answer

A) dividing marginal costs by the number of workers. 
B) multiplying the average marginal product times the number of workers. 
C) summing the marginal values to find the total and multiplying it times the number of workers to get the average. 
D) summing the marginal values to find the total and dividing it by the number of workers to get the average. 
A) dividing marginal costs by the number of workers. 
B) multiplying the average marginal product times the number of workers. 
C) summing the marginal values to find the total and multiplying it times the number of workers to get the average. 
D) summing the marginal values to find the total and dividing it by the number of workers to get the average.

Question 16

If another worker adds 9 units of output to a group of workers who had an average product of 7 units, then the average product of labor

Accepted Answer

A) will remain the same. 
B) will increase. 
C) will decrease. 
D) and what will happen to it cannot be determined. 
A) will remain the same. 
B) will increase. 
C) will decrease. 
D) and what will happen to it cannot be determined.

Question 17

Use a long-run average cost curve graph to illustrate how diseconomies of scale would not make it beneficial for two companies to go through with a merger.

Accepted Answer

Assume the two companies are o

Question 18

If a firm decreases its plant size and finds that its long-run average costs have decreased, then

Accepted Answer

A) its labor is more productive in a smaller plant. 
B) its diseconomies of scale are less. 
C) the firm should reduce its plant size even more. 
D) the firm is now profitable. 
A) its labor is more productive in a smaller plant. 
B) its diseconomies of scale are less. 
C) the firm should reduce its plant size even more. 
D) the firm is now profitable.

Question 19

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 average variable cost curve?

Accepted Answer

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

Question 20

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.

The slope of a typical isoquant is negative because to produce a given output, a producer

In the long run which of the following is true?

If production displays constant returns to scale, then all economies of scale have been exhausted.

Economists Cade Massey and Richard Thaler analyzed whether teams in the National Football League distributed salaries efficiently.Massey and Thaler found that

In the long run, all of a firm's inputs are variable.

Figure 11-13 -Refer to Figure 11-13.The lines shown in the diagram are isocost lines.If the price of labor is $50 per unit, then along the isocost AF, the total cost

Over the past twenty years, the number of small family farms has fallen significantly and in their place there are fewer, but larger, farms owned by corporations.Which of the following best explains this trend?

If marginal product is equal to average product, then total product is at a maximum.

Which of the following describes how output changes in the short run? Because of specialization and the division of labor, as more workers are hired

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

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

When a firm's long-run average cost curve is horizontal for a range of output, then that range of production displays

If we have information about workers' marginal products, then total and average product can be found by

If another worker adds 9 units of output to a group of workers who had an average product of 7 units, then the average product of labor

Use a long-run average cost curve graph to illustrate how diseconomies of scale would not make it beneficial for two companies to go through with a merger.

If a firm decreases its plant size and finds that its long-run average costs have decreased, then

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 average variable cost curve?

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

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

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Exam 11: Technology, Production, and Costs

The slope of a typical isoquant is negative because to produce a given output, a producer

In the long run which of the following is true?

If production displays constant returns to scale, then all economies of scale have been exhausted.

Economists Cade Massey and Richard Thaler analyzed whether teams in the National Football League distributed salaries efficiently.Massey and Thaler found that

In the long run, all of a firm's inputs are variable.

Figure 11-13 -Refer to Figure 11-13.The lines shown in the diagram are isocost lines.If the price of labor is $50 per unit, then along the isocost AF, the total cost

Over the past twenty years, the number of small family farms has fallen significantly and in their place there are fewer, but larger, farms owned by corporations.Which of the following best explains this trend?

If marginal product is equal to average product, then total product is at a maximum.

Which of the following describes how output changes in the short run? Because of specialization and the division of labor, as more workers are hired

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

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

When a firm's long-run average cost curve is horizontal for a range of output, then that range of production displays

If we have information about workers' marginal products, then total and average product can be found by

If another worker adds 9 units of output to a group of workers who had an average product of 7 units, then the average product of labor

Use a long-run average cost curve graph to illustrate how diseconomies of scale would not make it beneficial for two companies to go through with a merger.

If a firm decreases its plant size and finds that its long-run average costs have decreased, then

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 average variable cost curve?

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

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