Question 1

In the short run,an expansion of output always causes in an increase in:

Accepted Answer

A)  TC. 
B)  AFC. 
C)  AVC. 
D)  MC. 
A)  TC. 
B)  AFC. 
C)  AVC. 
D)  MC.

Question 2

Exhibit 11-4   Refer to Exhibit 11-4.What is the marginal product of the second worker hired each week?

Accepted Answer

A)  10 bicycles 
B)  15 bicycles 
C)  20 bicycles 
D)  30 bicycles 
A)  10 bicycles 
B)  15 bicycles 
C)  20 bicycles 
D)  30 bicycles

Question 3

Exhibit 11-4   Refer to Exhibit 11-4.What is the marginal product of the fifth worker hired each week?

Accepted Answer

A)  zero bicycles 
B)  10 bicycles 
C)  15 bicycles 
D)  -15 bicycles 
A)  zero bicycles 
B)  10 bicycles 
C)  15 bicycles 
D)  -15 bicycles

Question 4

Which of the following is most likely a fixed cost?

Accepted Answer

A)  Raw materials costs. 
B)  Shipping charges. 
C)  Property insurance premiums. 
D)  Fuel costs for running the factory. 
A)  Raw materials costs. 
B)  Shipping charges. 
C)  Property insurance premiums. 
D)  Fuel costs for running the factory.

Question 5

Complete the following table describing the short-run daily costs of the Kangaroo Backpack Company.

Accepted Answer

The answer of Complete the following table describing the short-run...

Question 6

Exhibit 11-7   Refer to Exhibit 11-7.At output level 0Q,average variable cost equals:

Accepted Answer

A)  QF. 
B)  FE. 
C)  QD. 
D)  QE. 
A)  QF. 
B)  FE. 
C)  QD. 
D)  QE.

Question 7

Exhibit 11-10   Refer to Exhibit 11-10.In the short run the firm can move from

Accepted Answer

A)  A to B 
B)  A to C 
C)  C to A 
D)  all of the above 
A)  A to B 
B)  A to C 
C)  C to A 
D)  all of the above

Question 8

Exhibit 11-3 A factory producing CD players finds that its output varies with the number of workers employed each week in the following way:
  Refer to Exhibit 11-3.Marginal product begins to diminish with the ____ worker employed.

Accepted Answer

A)  first 
B)  second 
C)  third 
D)  fourth 
A)  first 
B)  second 
C)  third 
D)  fourth

Question 9

Exhibit 11-10   Refer to Exhibit 11-10.Which of the following curves represent the SRATC for the medium plant?

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4 
A)  1 
B)  2 
C)  3 
D)  4

Question 10

In the short run,all costs are variable.

Accepted Answer

A) True 
 B)False

Question 11

If a firm experiences economies of scale,the average total cost of production increases as output expands.

Accepted Answer

A) True 
 B)False

Question 12

Total cost equals total variable cost plus marginal cost.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following most accurately describes the long-run period?

Accepted Answer

A)  The long run is a period of time in which a firm is unable to vary some of its factors of production. 
B)  In the long run, the firm is able to expand output by utilizing additional workers and raw materials, but not physical capital. 
C)  The long run is of sufficient length to allow a firm to alter its plant capacity and all other factors of production. 
D)  The long run is of sufficient length to allow a firm to transform economic losses into economic profits. 
A)  The long run is a period of time in which a firm is unable to vary some of its factors of production. 
B)  In the long run, the firm is able to expand output by utilizing additional workers and raw materials, but not physical capital. 
C)  The long run is of sufficient length to allow a firm to alter its plant capacity and all other factors of production. 
D)  The long run is of sufficient length to allow a firm to transform economic losses into economic profits.

Question 14

When there are economies of scale in production:

Accepted Answer

A)  long-run average total cost declines as output expands. 
B)  long-run average total cost increases as output expands. 
C)  marginal cost increases as output expands. 
D)  the marginal product of an input diminishes with increased utilization. 
A)  long-run average total cost declines as output expands. 
B)  long-run average total cost increases as output expands. 
C)  marginal cost increases as output expands. 
D)  the marginal product of an input diminishes with increased utilization.

Question 15

When marginal product is rising,marginal costs will:

Accepted Answer

A)  rise. 
B)  remain unchanged. 
C)  fall. 
D)  rise by an equal value. 
A)  rise. 
B)  remain unchanged. 
C)  fall. 
D)  rise by an equal value.

Question 16

If opportunity costs are ignored:

Accepted Answer

A)  all firms will show accounting profits. 
B)  all firms will appear to incur economic losses. 
C)  firms will still make profit-maximizing production decisions. 
D)  firms experiencing economic losses may appear to be profitable. 
A)  all firms will show accounting profits. 
B)  all firms will appear to incur economic losses. 
C)  firms will still make profit-maximizing production decisions. 
D)  firms experiencing economic losses may appear to be profitable.

Question 17

Diseconomies of scale are present when the long run average total cost of production declines as output expands.

Accepted Answer

A) True 
 B)False

Question 18

Exhibit 11-6   Refer to Exhibit 11-6.The marginal cost curve is the curve labeled:

Accepted Answer

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

Exam 11: The Firm: Production and Costs

In the short run,an expansion of output always causes in an increase in:

Exhibit 11-4 Refer to Exhibit 11-4.What is the marginal product of the second worker hired each week?

Exhibit 11-4 Refer to Exhibit 11-4.What is the marginal product of the fifth worker hired each week?

Which of the following is most likely a fixed cost?

Complete the following table describing the short-run daily costs of the Kangaroo Backpack Company.

Exhibit 11-7 Refer to Exhibit 11-7.At output level 0Q,average variable cost equals:

Exhibit 11-10 Refer to Exhibit 11-10.In the short run the firm can move from

Exhibit 11-3 A factory producing CD players finds that its output varies with the number of workers employed each week in the following way: Refer to Exhibit 11-3.Marginal product begins to diminish with the ____ worker employed.

Exhibit 11-10 Refer to Exhibit 11-10.Which of the following curves represent the SRATC for the medium plant?

In the short run,all costs are variable.

If a firm experiences economies of scale,the average total cost of production increases as output expands.

Total cost equals total variable cost plus marginal cost.

Which of the following most accurately describes the long-run period?

When there are economies of scale in production:

When marginal product is rising,marginal costs will:

If opportunity costs are ignored:

Diseconomies of scale are present when the long run average total cost of production declines as output expands.

Exhibit 11-6 Refer to Exhibit 11-6.The marginal cost curve is the curve labeled:

The Role and Method of Economics

Economics: Eight Powerful Ideas

Scarcity, Trade-Offs, and Production Possibilities

Demand, Supply, and Market Equilibrium

Markets in Motion and Price Controls

Elasticities

Market Efficiency and Welfare

Market Failure

Public Finance and Public Choice

Consumer Choice Theory

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Product Differentiation

Oligopoly and Strategic Behavior

The Markets for Labor, Capital, and Land

Income, Poverty, and Health Care

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Measuring Economic Performance

Economic Growth in the Global Economy

Financial Markets, Saving, and Investment

Aggregate Demand and Aggregate Supply

The Aggregate Expenditure Model

Monetary Institutions

The Federal Reserve System and Monetary Policy

Issues in Macroeconomic Theory and Policy

International Trade

International Finance

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