Question 1

Which of the following curves are U-shaped?
i. average variable cost curve
ii. average fixed cost curve
iii. average total cost curve

Accepted Answer

A) i and ii 
B) i and iii 
C) ii and iii 
D) i, ii, and iii 
E) Only ii 
A) i and ii 
B) i and iii 
C) ii and iii 
D) i, ii, and iii 
E) Only ii

Question 2

The total product curve shows the relationship between total product and

Accepted Answer

A) cost. 
B) the quantity of labor. 
C) the average product. 
D) the marginal product. 
E) the marginal cost. 
A) cost. 
B) the quantity of labor. 
C) the average product. 
D) the marginal product. 
E) the marginal cost.

Question 3

When a firm's long-run average total cost falls as its output increases, the firm is experiencing

Accepted Answer

A) economies of scale. 
B) diseconomies of scale. 
C) constant returns to scale. 
D) decreasing marginal returns. 
E) decreasing cost of marginal returns. 
A) economies of scale. 
B) diseconomies of scale. 
C) constant returns to scale. 
D) decreasing marginal returns. 
E) decreasing cost of marginal returns.

Question 4

If 5 workers can wash 30 cars a day and 6 workers can wash 33 cars a day, then the marginal product of the 6th worker equals

Accepted Answer

A) 30 cars a day. 
B) 33 cars a day. 
C) 5 cars a day. 
D) 5.5 cars a day. 
E) 3 cars a day. 
A) 30 cars a day. 
B) 33 cars a day. 
C) 5 cars a day. 
D) 5.5 cars a day. 
E) 3 cars a day.

Question 5

The long run average cost curve

Accepted Answer

A) is the sum of a firm's short run average cost curves. 
B) shows the lowest average cost facing a firm as it increases output changing both its plant and labor force. 
C) initially rises when output increases and then falls when output increases. 
D) always falls as output increases. 
E) always rises as output increases. 
A) is the sum of a firm's short run average cost curves. 
B) shows the lowest average cost facing a firm as it increases output changing both its plant and labor force. 
C) initially rises when output increases and then falls when output increases. 
D) always falls as output increases. 
E) always rises as output increases.

Question 6

The figure above shows some of a firm's cost curves.
-Curve A is the firm's

Accepted Answer

A) marginal cost curve. 
B) total cost curve. 
C) average total cost curve. 
D) total variable cost curve. 
E) total fixed cost curve. 
A) marginal cost curve. 
B) total cost curve. 
C) average total cost curve. 
D) total variable cost curve. 
E) total fixed cost curve.

Question 7

A firm's rent is a fixed cost. If the rent increases, then in the figure above ________ upward.

Accepted Answer

A) only curve A shifts 
B) only curve B shifts 
C) only curve C shifts 
D) both curves A and C shift 
E) both curves B and C shift 
A) only curve A shifts 
B) only curve B shifts 
C) only curve C shifts 
D) both curves A and C shift 
E) both curves B and C shift

Question 8

$$\begin{array} { | c | c | c | c | c | } 
\hline \begin{array} { c } 
\text { Labor } \
\text { (workers) }
\end{array} & \text { Output (bikes) } & \begin{array} { c } 
\text { Total fixed } \
\text { costs (dollars) }
\end{array} & \begin{array} { c } 
\text { Total variable } \
\text { cost (dollars) }
\end{array} & \begin{array} { c } 
\text { Total cost } \
\text { (dollars) }
\end{array} \
\hline 0 & 0 & 200 & & \
\hline 1 & 20 & & 100 & \
\hline 2 & 50 & & & \
\hline 3 & 60 & & & \
\hline 4 & 64 & & & \
\hline
\end{array}$$
-The table above gives costs at Jan's Bike Shop. Unfortunately, Jan's record keeping has been spotty. Each worker is paid $100 a day. Labor costs are the only variable costs of production. What is the total variable cost of producing 60 bikes?

Accepted Answer

A) $200 
B) $300 
C) $400 
D) $500 
E) None of the above answers are correct. 
A) $200 
B) $300 
C) $400 
D) $500 
E) None of the above answers are correct.

Question 9

What are diseconomies of scale and why might they occur?

Accepted Answer

Diseconomies of scale are features of th

Question 10

$$\begin{array} { c c } 
\begin{array} { c } 
\text { Output } \
\text { (oil changes per hour) }
\end{array} & \begin{array} { c } 
\text { Total cost } \
\text { (dollars per hour) }
\end{array} \
\hline 0 & 10 \
1 & 20 \
2 & 35 \
3 & 50 \
4 & 80 \
\hline
\end{array}$$
-The above table gives the total cost schedule for oil changes at the local Jiffy Lube.
a. What is Jiffy Lube's total fixed cost?
b. What is the total variable cost of 2 oil changes?
c. What is the average variable cost of 4 oil changes?
d. What is the average fixed cost of 2 oil changes?
e. What is the marginal cost of the 3rd oil change?

Accepted Answer

a. The total fixed cost is $10. At zero

Question 11

The short run is a time period that is

Accepted Answer

A) equal to a day. 
B) too short to change the amount of labor hired. 
C) too short to change the size of the firm's plant. 
D) long enough to change the size of the firm's plant. 
E) too short to change the amount of any resource the firm employs. 
A) equal to a day. 
B) too short to change the amount of labor hired. 
C) too short to change the size of the firm's plant. 
D) long enough to change the size of the firm's plant. 
E) too short to change the amount of any resource the firm employs.

Question 12

A cost incurred in the production of a good or service and for which the firm does not need to make a direct monetary payment, is referred to as ________ cost.

Accepted Answer

A) a minimized 
B) a maximized 
C) an explicit 
D) an implicit 
E) an invisible 
A) a minimized 
B) a maximized 
C) an explicit 
D) an implicit 
E) an invisible

Question 13

If a company triples its output and its average cost decreases, then the firm is definitely experiencing

Accepted Answer

A) diseconomies of scale. 
B) decreasing marginal returns. 
C) increasing marginal returns. 
D) economies of scale. 
E) Both answers C and D are correct. 
A) diseconomies of scale. 
B) decreasing marginal returns. 
C) increasing marginal returns. 
D) economies of scale. 
E) Both answers C and D are correct.

Question 14

Denise owns a plant that produces watch parts in Ohio. Denise noticed that when she hired the last worker, that worker's marginal product exceeded the marginal product of the previous worker. As a result, when the last worker was hired, Denise's average product of labor

Accepted Answer

A) decreased. 
B) increased. 
C) did not change. 
D) perhaps changed, but there is not enough information to determine whether or not it did change. 
E) equals the marginal product of labor. 
A) decreased. 
B) increased. 
C) did not change. 
D) perhaps changed, but there is not enough information to determine whether or not it did change. 
E) equals the marginal product of labor.

Question 15

Diseconomies of scale can occur as a result of which of the following?

Accepted Answer

A) increasing marginal returns as the firm increases its size 
B) lower total fixed cost as the firm increases its size 
C) management difficulties as the firm increases its size 
D) greater specialization of labor and capital as the firm increases its size 
E) increases in the labor force not matched by increases in the plant 
A) increasing marginal returns as the firm increases its size 
B) lower total fixed cost as the firm increases its size 
C) management difficulties as the firm increases its size 
D) greater specialization of labor and capital as the firm increases its size 
E) increases in the labor force not matched by increases in the plant

Question 16

Total fixed cost is the cost of

Accepted Answer

A) labor. 
B) production. 
C) a firm's fixed factors of production. 
D) only implicit factors of production. 
E) only explicit factors of production. 
A) labor. 
B) production. 
C) a firm's fixed factors of production. 
D) only implicit factors of production. 
E) only explicit factors of production.

Question 17

When plotted against the total output, what does the total fixed cost curve look like?

Accepted Answer

The total fixed cost curve is

Question 18

The main sources of economies of scale are

Accepted Answer

A) increasing marginal cost and decreasing marginal product. 
B) specialization of resources such as labor and capital. 
C) caused by the difficulty of coordinating and controlling large enterprises. 
D) decreasing marginal cost and increasing marginal product. 
E) an increase in a firm's bargaining power to lower the wage rate and the cost of capital as the firm's output increases. 
A) increasing marginal cost and decreasing marginal product. 
B) specialization of resources such as labor and capital. 
C) caused by the difficulty of coordinating and controlling large enterprises. 
D) decreasing marginal cost and increasing marginal product. 
E) an increase in a firm's bargaining power to lower the wage rate and the cost of capital as the firm's output increases.

Question 19

As a typical firm increases its output, its marginal cost

Accepted Answer

A) is constant. 
B) decreases at first and then increases. 
C) increases at first and then decreases. 
D) decreases. 
E) is negative at first and then positive. 
A) is constant. 
B) decreases at first and then increases. 
C) increases at first and then decreases. 
D) decreases. 
E) is negative at first and then positive.

Question 20

$$\begin{array} { c c } 
\begin{array} { c } 
\text { Quantity of labor } \
\text { (workers) }
\end{array} & \begin{array} { c } 
\text { Total product } \
\text { (lawns mowed per hour) }
\end{array} \
\hline 0 & 0 \
1 & 2 \
2 & 5 \
3 & 8 \
4 & 15 \
5 & 22 \
6 & 26 \
7 & 28
\end{array}$$
-The table above shows the total product schedule for Rick's Lawn Service, a yard care company. The total product schedule shows

Accepted Answer

A) increasing marginal returns when the 6th worker is hired. 
B) decreasing marginal returns when the 1st worker is hired. 
C) first increasing and then decreasing marginal returns. 
D) output first increases then increases. 
E) only decreasing marginal returns. 
A) increasing marginal returns when the 6th worker is hired. 
B) decreasing marginal returns when the 1st worker is hired. 
C) first increasing and then decreasing marginal returns. 
D) output first increases then increases. 
E) only decreasing marginal returns.

Which of the following curves are U-shaped? i. average variable cost curve ii. average fixed cost curve iii. average total cost curve

The total product curve shows the relationship between total product and

When a firm's long-run average total cost falls as its output increases, the firm is experiencing

If 5 workers can wash 30 cars a day and 6 workers can wash 33 cars a day, then the marginal product of the 6th worker equals

The long run average cost curve

The figure above shows some of a firm's cost curves. -Curve A is the firm's

A firm's rent is a fixed cost. If the rent increases, then in the figure above ________ upward.

What are diseconomies of scale and why might they occur?

The short run is a time period that is

A cost incurred in the production of a good or service and for which the firm does not need to make a direct monetary payment, is referred to as ________ cost.

If a company triples its output and its average cost decreases, then the firm is definitely experiencing

Denise owns a plant that produces watch parts in Ohio. Denise noticed that when she hired the last worker, that worker's marginal product exceeded the marginal product of the previous worker. As a result, when the last worker was hired, Denise's average product of labor

Diseconomies of scale can occur as a result of which of the following?

Total fixed cost is the cost of

When plotted against the total output, what does the total fixed cost curve look like?

The main sources of economies of scale are

As a typical firm increases its output, its marginal cost

Quantity of labor (workers) Total product (lawns mowed per hour) 0 0 1 2 2 5 3 8 4 15 5 22 6 26 7 28 -The table above shows the total product schedule for Rick's Lawn Service, a yard care company. The total product schedule shows

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Exam 10: Production and Cost

Which of the following curves are U-shaped? i. average variable cost curve ii. average fixed cost curve iii. average total cost curve

The total product curve shows the relationship between total product and

When a firm's long-run average total cost falls as its output increases, the firm is experiencing

If 5 workers can wash 30 cars a day and 6 workers can wash 33 cars a day, then the marginal product of the 6th worker equals

The long run average cost curve

The figure above shows some of a firm's cost curves. -Curve A is the firm's

A firm's rent is a fixed cost. If the rent increases, then in the figure above ________ upward.

What are diseconomies of scale and why might they occur?

The short run is a time period that is

A cost incurred in the production of a good or service and for which the firm does not need to make a direct monetary payment, is referred to as ________ cost.

If a company triples its output and its average cost decreases, then the firm is definitely experiencing

Denise owns a plant that produces watch parts in Ohio. Denise noticed that when she hired the last worker, that worker's marginal product exceeded the marginal product of the previous worker. As a result, when the last worker was hired, Denise's average product of labor

Diseconomies of scale can occur as a result of which of the following?

Total fixed cost is the cost of

When plotted against the total output, what does the total fixed cost curve look like?

The main sources of economies of scale are

As a typical firm increases its output, its marginal cost

Quantity of labor (workers) Total product (lawns mowed per hour) 0 0 1 2 2 5 3 8 4 15 5 22 6 26 7 28 -The table above shows the total product schedule for Rick's Lawn Service, a yard care company. The total product schedule shows

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters