Question 1

The long run is a period that is:

Accepted Answer

A)  long enough in which to vary the quantities of all factors of production. 
B)  more than one week. 
C)  more than one month. 
D)  at least one year. 
A)  long enough in which to vary the quantities of all factors of production. 
B)  more than one week. 
C)  more than one month. 
D)  at least one year.

Question 2

A curve which shows the quantities of output that can be obtained from different quantities of a variable factor of production, assuming other factors of production are fixed, is called the _______ curve.

Accepted Answer

A)  total input 
B)  marginal input 
C)  total product 
D)  average total quantity 
A)  total input 
B)  marginal input 
C)  total product 
D)  average total quantity

Question 3

Marginal product is _______ , and marginal utility is _______ .

Accepted Answer

A)  measurable; measurable 
B)  not measurable; measurable 
C)  measurable; not measurable 
D)  not measurable; not measurable 
A)  measurable; measurable 
B)  not measurable; measurable 
C)  measurable; not measurable 
D)  not measurable; not measurable

Question 4

If a firm's marginal cost at a certain level of output is $10, the change in _______ at that level of output must also be $10.

Accepted Answer

A)  total variable cost 
B)  average total cost 
C)  average variable cost 
D)  average fixed cost 
A)  total variable cost 
B)  average total cost 
C)  average variable cost 
D)  average fixed cost

Question 5

In making decisions about factor mix, a firm is seeking to:

Accepted Answer

A)  maximize output. 
B)  maximize profits. 
C)  maximize profits within its budget constraint, much like a consumer maximizes utility within a budget constraint. 
D)  do all of the above. 
A)  maximize output. 
B)  maximize profits. 
C)  maximize profits within its budget constraint, much like a consumer maximizes utility within a budget constraint. 
D)  do all of the above.

Question 6

At 47 units of labor, a firm finds that average product of labor equals 39.6 and marginal product of labor equals 32.9.We can conclude that the average product curve at 47 units of labor is:

Accepted Answer

A)  upward-sloping. 
B)  horizontal. 
C)  vertical. 
D)  downward-sloping. 
A)  upward-sloping. 
B)  horizontal. 
C)  vertical. 
D)  downward-sloping.

Question 7

Marginal cost must cross average variable cost at its minimum.

Accepted Answer

A) True 
 B)False

Question 8

Diminishing marginal returns occur when:

Accepted Answer

A)  each additional unit of a variable factor adds more to total output than the previous unit. 
B)  an additional variable factor adds less to total output than the previous unit. 
C)  the marginal product of a variable factor is increasing, but at a decreasing rate. 
D)  all of the above are true. 
A)  each additional unit of a variable factor adds more to total output than the previous unit. 
B)  an additional variable factor adds less to total output than the previous unit. 
C)  the marginal product of a variable factor is increasing, but at a decreasing rate. 
D)  all of the above are true.

Question 9

Diminishing marginal returns for the first four units of a variable input is exhibited by the marginal product sequence:

Accepted Answer

A)  50, 50, 50, 50. 
B)  50, 40, 30, 20. 
C)  50, 110, 180, 260. 
D)  50, 100, 150, 200. 
A)  50, 50, 50, 50. 
B)  50, 40, 30, 20. 
C)  50, 110, 180, 260. 
D)  50, 100, 150, 200.

Question 10

What is the difference between marginal cost and average variable cost? Why does AVC look so much like ATC? Will MC be the same whether computed from TVC or TC? Explain.

Accepted Answer

Marginal cost (MC) is the additional cos

Question 11

Given a constant level of all other factors, if the marginal product of a factor is rising as more of it is used, then the firm is experiencing:

Accepted Answer

A)  constant marginal returns. 
B)  increasing marginal returns. 
C)  diminishing marginal returns. 
D)  negative marginal returns. 
A)  constant marginal returns. 
B)  increasing marginal returns. 
C)  diminishing marginal returns. 
D)  negative marginal returns.

Question 12

The third of the three ranges of production is characterized by _______ marginal returns.

Accepted Answer

A)  increasing 
B)  constant 
C)  diminishing 
D)  negative 
A)  increasing 
B)  constant 
C)  diminishing 
D)  negative

Question 13

If a firm experiences lower costs per unit as it increases production in the long run, this is an example of:

Accepted Answer

A)  economies of scale. 
B)  diseconomies of scale. 
C)  increasing opportunity costs. 
D)  scale reduction. 
A)  economies of scale. 
B)  diseconomies of scale. 
C)  increasing opportunity costs. 
D)  scale reduction.

Question 14

Use the following for questions 44-50.
  
-(Exhibit: Total Product and Marginal Product) Negative marginal returns begin when the ________ worker is added.

Accepted Answer

A)  fifth 
B)  sixth 
C)  seventh 
D)  eighth 
A)  fifth 
B)  sixth 
C)  seventh 
D)  eighth

Question 15

Diminishing marginal returns for the first four units of a variable input is exhibited by the total product sequence:

Accepted Answer

A)  5, 4, 3, 2. 
B)  5, 5, 5, 5. 
C)  5, 9, 12, 14. 
D)  5, 10, 15, 20. 
A)  5, 4, 3, 2. 
B)  5, 5, 5, 5. 
C)  5, 9, 12, 14. 
D)  5, 10, 15, 20.

Question 16

If marginal cost is greater than average total cost, then:

Accepted Answer

A)  average total cost is increasing. 
B)  average total cost is decreasing. 
C)  average total cost is unchanged. 
D)  marginal cost is decreasing. 
A)  average total cost is increasing. 
B)  average total cost is decreasing. 
C)  average total cost is unchanged. 
D)  marginal cost is decreasing.

Question 17

Use the following to answer question(s): Long-Run Average Cost
  
-(Exhibit: Long-Run Average Cost) Output per period in the region A to B indicates that a firm is experiencing:

Accepted Answer

A)  constant returns to scale. 
B)  economies of scale. 
C)  diseconomies of scale. 
D)  constant total cost as output increases. 
A)  constant returns to scale. 
B)  economies of scale. 
C)  diseconomies of scale. 
D)  constant total cost as output increases.

Question 18

A total product curve indicates the relationship between:

Accepted Answer

A)  variable input and price. 
B)  variable input and variable cost. 
C)  variable input and output. 
D)  output and price. 
A)  variable input and price. 
B)  variable input and variable cost. 
C)  variable input and output. 
D)  output and price.

Question 19

If marginal cost is equal to average total cost, then:

Accepted Answer

A)  average total cost is increasing. 
B)  average total cost is at its maximum. 
C)  average total cost is at its minimum. 
D)  marginal cost is increasing. 
A)  average total cost is increasing. 
B)  average total cost is at its maximum. 
C)  average total cost is at its minimum. 
D)  marginal cost is increasing.

Question 20

The costs associated with the use of fixed factors of production are:

Accepted Answer

A)  total costs. 
B)  marginal costs. 
C)  variable costs. 
D)  fixed costs. 
A)  total costs. 
B)  marginal costs. 
C)  variable costs. 
D)  fixed costs.

The long run is a period that is:

A curve which shows the quantities of output that can be obtained from different quantities of a variable factor of production, assuming other factors of production are fixed, is called the _______ curve.

Marginal product is _ , and marginal utility is _ .

If a firm's marginal cost at a certain level of output is $10, the change in _______ at that level of output must also be $10.

In making decisions about factor mix, a firm is seeking to:

At 47 units of labor, a firm finds that average product of labor equals 39.6 and marginal product of labor equals 32.9.We can conclude that the average product curve at 47 units of labor is:

Marginal cost must cross average variable cost at its minimum.

Diminishing marginal returns occur when:

Diminishing marginal returns for the first four units of a variable input is exhibited by the marginal product sequence:

What is the difference between marginal cost and average variable cost? Why does AVC look so much like ATC? Will MC be the same whether computed from TVC or TC? Explain.

Given a constant level of all other factors, if the marginal product of a factor is rising as more of it is used, then the firm is experiencing:

The third of the three ranges of production is characterized by _______ marginal returns.

If a firm experiences lower costs per unit as it increases production in the long run, this is an example of:

Use the following for questions 44-50. -(Exhibit: Total Product and Marginal Product) Negative marginal returns begin when the ________ worker is added.

Diminishing marginal returns for the first four units of a variable input is exhibited by the total product sequence:

If marginal cost is greater than average total cost, then:

Use the following to answer question(s): Long-Run Average Cost -(Exhibit: Long-Run Average Cost) Output per period in the region A to B indicates that a firm is experiencing:

A total product curve indicates the relationship between:

If marginal cost is equal to average total cost, then:

The costs associated with the use of fixed factors of production are:

Economics: The Study of Choice

Confronting Scarcity: Choices in Production

Demand and Supply

Applications of Supply and Demand

Elasticity: a Measure of Response

Markets, Maximizers, and Efficiency

The Analysis of Consumer Choice

Competitive Markets for Goods and Services

Monopoly

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Imperfectly Competitive Markets for Factors of Production

Public Finance and Public Choice

Antitrust Policy and Business Regulation

International Trade

The Economics of the Environment

Inequality, Poverty, and Discrimination

Filters

Exam 8: Production and Cost

The long run is a period that is:

A curve which shows the quantities of output that can be obtained from different quantities of a variable factor of production, assuming other factors of production are fixed, is called the _______ curve.

Marginal product is _______ , and marginal utility is _______ .

If a firm's marginal cost at a certain level of output is $10, the change in _______ at that level of output must also be $10.

In making decisions about factor mix, a firm is seeking to:

At 47 units of labor, a firm finds that average product of labor equals 39.6 and marginal product of labor equals 32.9.We can conclude that the average product curve at 47 units of labor is:

Marginal cost must cross average variable cost at its minimum.

Diminishing marginal returns occur when:

Diminishing marginal returns for the first four units of a variable input is exhibited by the marginal product sequence:

What is the difference between marginal cost and average variable cost? Why does AVC look so much like ATC? Will MC be the same whether computed from TVC or TC? Explain.

Given a constant level of all other factors, if the marginal product of a factor is rising as more of it is used, then the firm is experiencing:

The third of the three ranges of production is characterized by _______ marginal returns.

If a firm experiences lower costs per unit as it increases production in the long run, this is an example of:

Use the following for questions 44-50. -(Exhibit: Total Product and Marginal Product) Negative marginal returns begin when the ________ worker is added.

Diminishing marginal returns for the first four units of a variable input is exhibited by the total product sequence:

If marginal cost is greater than average total cost, then:

Use the following to answer question(s): Long-Run Average Cost -(Exhibit: Long-Run Average Cost) Output per period in the region A to B indicates that a firm is experiencing:

A total product curve indicates the relationship between:

If marginal cost is equal to average total cost, then:

The costs associated with the use of fixed factors of production are:

Economics: The Study of Choice

Confronting Scarcity: Choices in Production

Demand and Supply

Applications of Supply and Demand

Elasticity: a Measure of Response

Markets, Maximizers, and Efficiency

The Analysis of Consumer Choice

Competitive Markets for Goods and Services

Monopoly

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Imperfectly Competitive Markets for Factors of Production

Public Finance and Public Choice

Antitrust Policy and Business Regulation

International Trade

The Economics of the Environment

Inequality, Poverty, and Discrimination

Filters

Marginal product is _ , and marginal utility is _ .