Question 1

The marginal product of labor equals the change in ________ from a one-unit increase in the quantity of labor.

Accepted Answer

A) total product 
B) average product 
C) total cost 
D) the slope of the average product curve 
E) the wage rate 
A) total product 
B) average product 
C) total cost 
D) the slope of the average product curve 
E) the wage rate

Question 2

What is the long-run average cost curve? What are the three ranges of output and in what order do they occur? Briefly define each of the three ranges.

Accepted Answer

The long-run average cost curve shows th

Question 3

Increasing marginal returns always occurs when the

Accepted Answer

A) marginal product of an additional worker exceeds the marginal product of the previous worker. 
B) average product of an additional worker exceeds the average product of the previous worker. 
C) marginal product of an additional worker is less than the marginal product of the previous worker. 
D) average product of an additional worker is less than the average product of the previous worker. 
E) marginal product of an additional worker exceeds the average product of the previous worker. 
A) marginal product of an additional worker exceeds the marginal product of the previous worker. 
B) average product of an additional worker exceeds the average product of the previous worker. 
C) marginal product of an additional worker is less than the marginal product of the previous worker. 
D) average product of an additional worker is less than the average product of the previous worker. 
E) marginal product of an additional worker exceeds the average product of the previous worker.

Question 4

What does the average product of labor equal?

Accepted Answer

The average product of labor e

Question 5

If total fixed cost increases, which of the following will NOT change?

Accepted Answer

A) total cost 
B) average fixed cost 
C) marginal cost 
D) average total cost 
E) ALL costs increase when total fixed cost increases. 
A) total cost 
B) average fixed cost 
C) marginal cost 
D) average total cost 
E) ALL costs increase when total fixed cost increases.

Question 6

-The table above shows the total product schedule for Rick's Lawn Service, a yard care company.When the 4th worker is hired, the ________ product of labor equals ________ lawns mowed.

Accepted Answer

A) average; 60 
B) average; 3.75 
C) marginal; 3.75 
D) marginal; 0 
E) marginal; 15 
A) average; 60 
B) average; 3.75 
C) marginal; 3.75 
D) marginal; 0 
E) marginal; 15

Question 7

What is the difference between decreasing marginal returns and negative marginal returns?

Accepted Answer

Decreasing marginal returns occur when t

Question 8

Which of the following is an explicit cost of production?

Accepted Answer

A) wages paid to workers 
B) the electric bill 
C) purchases of raw material 
D) Only answers A and B are explicit costs because the purchases of raw material is only an opportunity cost. 
E) Answers A, B, and C are all correct. 
A) wages paid to workers 
B) the electric bill 
C) purchases of raw material 
D) Only answers A and B are explicit costs because the purchases of raw material is only an opportunity cost. 
E) Answers A, B, and C are all correct.

Question 9

In economics, a "normal profit" is the return to

Accepted Answer

A) labor. 
B) capital. 
C) land. 
D) entrepreneurship. 
E) Answers B and D are correct. 
A) labor. 
B) capital. 
C) land. 
D) entrepreneurship. 
E) Answers B and D are correct.

Question 10

"If the marginal product of labor curve slopes downward, then the average product of labor curve necessarily must slope downward." Explain whether the previous statement is correct or incorrect?

Accepted Answer

The statement is incorrect.The relations

Question 11

When an economist uses the term "cost" referring to a firm, the economist refers to the

Accepted Answer

A) price of the good to the consumer. 
B) explicit cost of producing a good or service but not the implicit cost of producing a good or service. 
C) implicit cost of producing a good or service but not the explicit cost of producing a good or service.. 
D) opportunity cost of producing a good or service, which includes both implicit and explicit cost. 
E) cost that can be actually verified and measured. 
A) price of the good to the consumer. 
B) explicit cost of producing a good or service but not the implicit cost of producing a good or service. 
C) implicit cost of producing a good or service but not the explicit cost of producing a good or service.. 
D) opportunity cost of producing a good or service, which includes both implicit and explicit cost. 
E) cost that can be actually verified and measured.

Question 12

Jeremiah runs a bullfrog farm in Frogville, Oklahoma.Jeremiah notices that each additional worker he employs adds more to the total output than does the previous worker.Jeremiah must be

Accepted Answer

A) experiencing increasing marginal returns to labor. 
B) producing at a point where the average product of labor decreases as more workers are employed. 
C) producing at a point below his total product curve. 
D) mistaken because the law of decreasing returns points out that it cannot be the case that the marginal product increases as more workers are employed. 
E) producing at a point where the average product of labor exceeds the marginal product of labor. 
A) experiencing increasing marginal returns to labor. 
B) producing at a point where the average product of labor decreases as more workers are employed. 
C) producing at a point below his total product curve. 
D) mistaken because the law of decreasing returns points out that it cannot be the case that the marginal product increases as more workers are employed. 
E) producing at a point where the average product of labor exceeds the marginal product of labor.

Question 13

Which of the following is FALSE?

Accepted Answer

A) Long-run average variable costs equal long-run average total costs. 
B) Fixed costs increase in the long run. 
C) As a firm produces more output, eventually it experiences diseconomies of scale. 
D) In the long run, both the amount of capital and labor used by the firm can be changed. 
E) In the long run, the firm has no fixed inputs. 
A) Long-run average variable costs equal long-run average total costs. 
B) Fixed costs increase in the long run. 
C) As a firm produces more output, eventually it experiences diseconomies of scale. 
D) In the long run, both the amount of capital and labor used by the firm can be changed. 
E) In the long run, the firm has no fixed inputs.

Question 14

To produce 10 shirts, the total cost is $80; to produce 11 shirts, the total cost is $99.The average total cost of the 11th shirt is equal to

Accepted Answer

A) $8. 
B) $9. 
C) $80. 
D) $99. 
E) $19. 
A) $8. 
B) $9. 
C) $80. 
D) $99. 
E) $19.

Question 15

-Kenya owns a lawn mowing company.His total product schedule is in the above table.When 4 workers are employed, the average product is ________ lawns mowed per week.

Accepted Answer

A) 80 
B) 25 
C) 20 
D) 5 
E) 320 
A) 80 
B) 25 
C) 20 
D) 5 
E) 320

Question 16

Jennifer owns a pig farm near Salina, Kansas.Last year she earned $39,000 in total revenue while incurring $38,000 in explicit costs.She could have earned $27,000 as a teacher in Salina.These are all her revenue and costs.Therefore Jennifer earned an

Accepted Answer

A) accounting profit of $1,000 but incurred an economic loss of $26,000. 
B) accounting profit of $1,000 but incurred an economic loss of $65,000. 
C) accounting profit of $1,000 but incurred an economic loss of $38,000. 
D) economic profit of $1,000. 
E) None of the above answers is correct. 
A) accounting profit of $1,000 but incurred an economic loss of $26,000. 
B) accounting profit of $1,000 but incurred an economic loss of $65,000. 
C) accounting profit of $1,000 but incurred an economic loss of $38,000. 
D) economic profit of $1,000. 
E) None of the above answers is correct.

Question 17

In the short run, total variable cost

Accepted Answer

A) includes the cost of capital. 
B) includes the cost of labor. 
C) includes both the cost of capital and of labor. 
D) does not change when production changes. 
E) is positive when output is zero. 
A) includes the cost of capital. 
B) includes the cost of labor. 
C) includes both the cost of capital and of labor. 
D) does not change when production changes. 
E) is positive when output is zero.

Question 18

-The table above shows a total product schedule.Suppose that labor costs $20 per worker and fixed costs are $60.The total variable cost of producing 80 units equals

Accepted Answer

A) less than $50. 
B) more that $50 and less than $70. 
C) more than $70 and less than $90. 
D) more than $90 and less than $120. 
E) more than $120. 
A) less than $50. 
B) more that $50 and less than $70. 
C) more than $70 and less than $90. 
D) more than $90 and less than $120. 
E) more than $120.

Question 19

A firm's long-run average cost curve shows the ________ average cost at which it is possible to produce each output when the firm has had ________ time to change both its labor force and its plant.

Accepted Answer

A) highest; sufficient 
B) lowest; sufficient 
C) lowest; insufficient 
D) highest; insufficient 
E) average; sufficient 
A) highest; sufficient 
B) lowest; sufficient 
C) lowest; insufficient 
D) highest; insufficient 
E) average; sufficient

Question 20

Rufus runs a skunk-skinning service in West Virginia.He employs skinners at a wage rate of $240 a week for each one.He leases the shack where his workers work for $200 per week.The rent is fixed for the next two years.Last week his 10 employees managed to skin a total of 300 skunks.
a∙What is the average product of labor for Rufus's company?
b∙What is Rufus' total variable cost per week?
c∙What is the average variable cost for Rufus's company?
d∙If Rufus adds his brother Jethro to his staff, at a wage rate of $240 a week, and his company can now skin 310 skunks per week, what is Rufus's new average variable cost?

Accepted Answer

a∙The average product of labor is 30 sku

The marginal product of labor equals the change in ________ from a one-unit increase in the quantity of labor.

What is the long-run average cost curve? What are the three ranges of output and in what order do they occur? Briefly define each of the three ranges.

Increasing marginal returns always occurs when the

What does the average product of labor equal?

If total fixed cost increases, which of the following will NOT change?

-The table above shows the total product schedule for Rick's Lawn Service, a yard care company.When the 4th worker is hired, the product of labor equals lawns mowed.

What is the difference between decreasing marginal returns and negative marginal returns?

Which of the following is an explicit cost of production?

In economics, a "normal profit" is the return to

"If the marginal product of labor curve slopes downward, then the average product of labor curve necessarily must slope downward." Explain whether the previous statement is correct or incorrect?

When an economist uses the term "cost" referring to a firm, the economist refers to the

Jeremiah runs a bullfrog farm in Frogville, Oklahoma.Jeremiah notices that each additional worker he employs adds more to the total output than does the previous worker.Jeremiah must be

Which of the following is FALSE?

To produce 10 shirts, the total cost is $80; to produce 11 shirts, the total cost is $99.The average total cost of the 11th shirt is equal to

-Kenya owns a lawn mowing company.His total product schedule is in the above table.When 4 workers are employed, the average product is ________ lawns mowed per week.

Jennifer owns a pig farm near Salina, Kansas.Last year she earned $39,000 in total revenue while incurring $38,000 in explicit costs.She could have earned $27,000 as a teacher in Salina.These are all her revenue and costs.Therefore Jennifer earned an

In the short run, total variable cost

-The table above shows a total product schedule.Suppose that labor costs $20 per worker and fixed costs are $60.The total variable cost of producing 80 units equals

A firm's long-run average cost curve shows the average cost at which it is possible to produce each output when the firm has had time to change both its labor force and its plant.

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets With Private Information

Consumer Choice and Demand

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 14: Production and Cost

The marginal product of labor equals the change in ________ from a one-unit increase in the quantity of labor.

What is the long-run average cost curve? What are the three ranges of output and in what order do they occur? Briefly define each of the three ranges.

Increasing marginal returns always occurs when the

What does the average product of labor equal?

If total fixed cost increases, which of the following will NOT change?

-The table above shows the total product schedule for Rick's Lawn Service, a yard care company.When the 4th worker is hired, the ________ product of labor equals ________ lawns mowed.

What is the difference between decreasing marginal returns and negative marginal returns?

Which of the following is an explicit cost of production?

In economics, a "normal profit" is the return to

"If the marginal product of labor curve slopes downward, then the average product of labor curve necessarily must slope downward." Explain whether the previous statement is correct or incorrect?

When an economist uses the term "cost" referring to a firm, the economist refers to the

Jeremiah runs a bullfrog farm in Frogville, Oklahoma.Jeremiah notices that each additional worker he employs adds more to the total output than does the previous worker.Jeremiah must be

Which of the following is FALSE?

To produce 10 shirts, the total cost is $80; to produce 11 shirts, the total cost is $99.The average total cost of the 11th shirt is equal to

-Kenya owns a lawn mowing company.His total product schedule is in the above table.When 4 workers are employed, the average product is ________ lawns mowed per week.

Jennifer owns a pig farm near Salina, Kansas.Last year she earned $39,000 in total revenue while incurring $38,000 in explicit costs.She could have earned $27,000 as a teacher in Salina.These are all her revenue and costs.Therefore Jennifer earned an

In the short run, total variable cost

-The table above shows a total product schedule.Suppose that labor costs $20 per worker and fixed costs are $60.The total variable cost of producing 80 units equals

A firm's long-run average cost curve shows the ________ average cost at which it is possible to produce each output when the firm has had ________ time to change both its labor force and its plant.

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets With Private Information

Consumer Choice and Demand

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

-The table above shows the total product schedule for Rick's Lawn Service, a yard care company.When the 4th worker is hired, the product of labor equals lawns mowed.

A firm's long-run average cost curve shows the average cost at which it is possible to produce each output when the firm has had time to change both its labor force and its plant.