Question 1

If 11 workers can produce 53 units of output while 12 workers can produce 56 units of output,what is the marginal product of the 12th worker?

Accepted Answer

A)  0.16 
B)  3 
C)  4.67 
D)  36 
A)  0.16 
B)  3 
C)  4.67 
D)  36

Question 2

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 3

Explain how the listed events (a-d)would affect the following at Hilton Hotels.
i.Marginal cost
ii.Average variable cost
iii.Average fixed cost
iv.Average total cost
a.Hilton decides on an across-the-board 5 percent increase in executive salaries.
b.Hilton decides to eliminate all print advertising.
c.Hilton signs a new contract with the Culinary Workers Union that requires the company to increase wages for all its kitchen workers.
d.The federal government starts to levy a $5 room tax on all hotel rooms.

Accepted Answer

a∙Average fixed cost and average total c

Question 4

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 5

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.

Question 6

As a firm hires more labor in the short run,the

Accepted Answer

A)  level of total product stays constant. 
B)  output per worker rises. 
C)  extra output of an additional worker may rise at first, but eventually must fall. 
D)  costs of production are increasing at a fixed rate per unit of output. 
A)  level of total product stays constant. 
B)  output per worker rises. 
C)  extra output of an additional worker may rise at first, but eventually must fall. 
D)  costs of production are increasing at a fixed rate per unit of output.

Question 7

Which of the following statements best describes the economic short run?

Accepted Answer

A)  It is a period of one year or less. 
B)  It is a period during which firms are free to vary all of their inputs. 
C)  It is a period during which at least one of the firm's inputs is fixed. 
D)  It is a period during which fixed inputs become variable inputs because of depreciation. 
A)  It is a period of one year or less. 
B)  It is a period during which firms are free to vary all of their inputs. 
C)  It is a period during which at least one of the firm's inputs is fixed. 
D)  It is a period during which fixed inputs become variable inputs because of depreciation.

Question 8

If the 15th unit of output has a marginal cost of $29.50 and the average cost of producing 14 units of output is $30.23,what will happen to the average cost of production if the 15th unit is produced?

Accepted Answer

A)  Average cost increases as more is produced. 
B)  Average cost will fall. 
C)  Average cost could increase or decrease depending on what happens to variable cost. 
D)  Average cost could increase or decrease depending on what happens to fixed cost. 
A)  Average cost increases as more is produced. 
B)  Average cost will fall. 
C)  Average cost could increase or decrease depending on what happens to variable cost. 
D)  Average cost could increase or decrease depending on what happens to fixed cost.

Question 9

Which of the following is not a reason why firms experience economies of scale?

Accepted Answer

A)  Technology can make it possible to increase production with a smaller increase in at least one input. 
B)  Workers and managers can become more specialized, enabling them to be more productive. 
C)  Larger firms may be able to purchase inputs at lower costs than smaller competitors. 
D)  As output increases, the managers can begin to have difficulty coordinating the operations of their firms. 
A)  Technology can make it possible to increase production with a smaller increase in at least one input. 
B)  Workers and managers can become more specialized, enabling them to be more productive. 
C)  Larger firms may be able to purchase inputs at lower costs than smaller competitors. 
D)  As output increases, the managers can begin to have difficulty coordinating the operations of their firms.

Question 10

Figure 8-11
   Figure 8-11 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 8-11.Constant returns to scale

Accepted Answer

A)  occur for output rates greater than 5,000 picture frames. 
B)  occur between 5,000 and 20,000 picture frames per month. 
C)  occur between 10,000 and 20,000 pictures frames per month. 
D)  will shift the long-run average cost curve downward. 
A)  occur for output rates greater than 5,000 picture frames. 
B)  occur between 5,000 and 20,000 picture frames per month. 
C)  occur between 10,000 and 20,000 pictures frames per month. 
D)  will shift the long-run average cost curve downward.

Question 11

If a firm produces 20 units of output and incurs a total cost of $1,000 and a variable cost is $700,calculate the firm's average fixed cost of production if it expands output to 25 units.

Accepted Answer

A)  $300 
B)  $15 
C)  $12 
D)  It is impossible to determine without additional information. 
A)  $300 
B)  $15 
C)  $12 
D)  It is impossible to determine without additional information.

Question 12

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 13

If 11 workers can produce a total of 54 units of a product and a 12th worker has a marginal product of 6 units,then the average product of 12 workers is

Accepted Answer

A)  60 units. 
B)  54 units. 
C)  48 units. 
D)  5 units. 
A)  60 units. 
B)  54 units. 
C)  48 units. 
D)  5 units.

Question 14

Which of the following is not a source of technological advancement for a producer?

Accepted Answer

A)  better trained workers 
B)  more efficient physical capital 
C)  higher skill level of managers 
D)  outsourcing some aspect of production 
A)  better trained workers 
B)  more efficient physical capital 
C)  higher skill level of managers 
D)  outsourcing some aspect of production

Question 15

Sam Lewis owns a firm in New York City's Garment District.If Sam keeps adding workers to use the same number of sewing machines,eventually the workplace will become so crowded that workers will get in each other's way.At this point

Accepted Answer

A)  the marginal product of labor in Sam's business would be negative and his total output would decrease. 
B)  Sam should encourage his workers to share their sewing machines. 
C)  Sam's business will be in violation of safety rules that have been established by the New York City government. 
D)  Sam should begin using a division of labor in his business. 
A)  the marginal product of labor in Sam's business would be negative and his total output would decrease. 
B)  Sam should encourage his workers to share their sewing machines. 
C)  Sam's business will be in violation of safety rules that have been established by the New York City government. 
D)  Sam should begin using a division of labor in his business.

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is an example of a long-run adjustment?

Accepted Answer

A)  Your university offers Saturday morning classes next fall. 
B)  Ford Motor Company lays off 2,000 assembly line workers. 
C)  A soybean farmer turns on the irrigation system after a month long dry spell. 
D)  Walmart builds another Supercenter. 
A)  Your university offers Saturday morning classes next fall. 
B)  Ford Motor Company lays off 2,000 assembly line workers. 
C)  A soybean farmer turns on the irrigation system after a month long dry spell. 
D)  Walmart builds another Supercenter.

Question 18

Which of the following statements correctly describes the distinction between technology and technological change?

Accepted Answer

A)  Technology refers to the processes used by a firm to transform inputs into output of goods and services while technological change is a change in a firm's ability to produce a given level of output with a given quantity of inputs. 
B)  Technology refers to the ability of a firm to increase its maximum output from a given quantity of inputs and technological change is the process by which the firm achieves this productivity gain. 
C)  Technology is product-centered; its refers to developing new products with limited resources while technological change is process-centered in that it focuses on developing new production techniques. 
D)  Technology involves research and development while technological change involves the use of more efficient machinery. 
A)  Technology refers to the processes used by a firm to transform inputs into output of goods and services while technological change is a change in a firm's ability to produce a given level of output with a given quantity of inputs. 
B)  Technology refers to the ability of a firm to increase its maximum output from a given quantity of inputs and technological change is the process by which the firm achieves this productivity gain. 
C)  Technology is product-centered; its refers to developing new products with limited resources while technological change is process-centered in that it focuses on developing new production techniques. 
D)  Technology involves research and development while technological change involves the use of more efficient machinery.

Question 19

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 20

A downward sloping marginal product of labor curve demonstrates the law of diminishing marginal returns.

Accepted Answer

A) True 
 B)False

If 11 workers can produce 53 units of output while 12 workers can produce 56 units of output,what is the marginal product of the 12th worker?

If fixed costs do not change,then marginal cost

In the long run which of the following is true?

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

As a firm hires more labor in the short run,the

Which of the following statements best describes the economic short run?

If the 15th unit of output has a marginal cost of $29.50 and the average cost of producing 14 units of output is $30.23,what will happen to the average cost of production if the 15th unit is produced?

Which of the following is not a reason why firms experience economies of scale?

Figure 8-11 Figure 8-11 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 8-11.Constant returns to scale

If a firm produces 20 units of output and incurs a total cost of $1,000 and a variable cost is $700,calculate the firm's average fixed cost of production if it expands output to 25 units.

If 11 workers can produce a total of 54 units of a product and a 12th worker has a marginal product of 6 units,then the average product of 12 workers is

Which of the following is not a source of technological advancement for a producer?

Sam Lewis owns a firm in New York City's Garment District.If Sam keeps adding workers to use the same number of sewing machines,eventually the workplace will become so crowded that workers will get in each other's way.At this point

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

Which of the following is an example of a long-run adjustment?

Which of the following statements correctly describes the distinction between technology and technological change?

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

A downward sloping marginal product of labor curve demonstrates the law of diminishing marginal returns.

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, The Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, The Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, International Trade, and Exchange Rates

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Exam 8: Technology,Production,and Costs

If 11 workers can produce 53 units of output while 12 workers can produce 56 units of output,what is the marginal product of the 12th worker?

If fixed costs do not change,then marginal cost

In the long run which of the following is true?

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

As a firm hires more labor in the short run,the

Which of the following statements best describes the economic short run?

If the 15th unit of output has a marginal cost of $29.50 and the average cost of producing 14 units of output is $30.23,what will happen to the average cost of production if the 15th unit is produced?

Which of the following is not a reason why firms experience economies of scale?

Figure 8-11 Figure 8-11 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 8-11.Constant returns to scale

If a firm produces 20 units of output and incurs a total cost of $1,000 and a variable cost is $700,calculate the firm's average fixed cost of production if it expands output to 25 units.

If 11 workers can produce a total of 54 units of a product and a 12th worker has a marginal product of 6 units,then the average product of 12 workers is

Which of the following is not a source of technological advancement for a producer?

Sam Lewis owns a firm in New York City's Garment District.If Sam keeps adding workers to use the same number of sewing machines,eventually the workplace will become so crowded that workers will get in each other's way.At this point

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

Which of the following is an example of a long-run adjustment?

Which of the following statements correctly describes the distinction between technology and technological change?

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

A downward sloping marginal product of labor curve demonstrates the law of diminishing marginal returns.

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, The Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, The Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, International Trade, and Exchange Rates

Filters