Question 1

In the long run all costs are variable.

Accepted Answer

A) True 
 B)False

Question 2

Suppose that the first four units of a variable input generate corresponding total outputs per period of 200, 350, 450, and 500, respectively.The marginal product of the second unit of input is:

Accepted Answer

A)  50. 
B)  100. 
C)  150. 
D)  200. 
A)  50. 
B)  100. 
C)  150. 
D)  200.

Question 3

A firm that is experiencing diminishing returns in management's ability to use and disseminate information as it increases production in the long run is an example of:

Accepted Answer

A)  economies of scale. 
B)  diseconomies of scale. 
C)  being too small for the relevant market. 
D)  not having enough managers. 
A)  economies of scale. 
B)  diseconomies of scale. 
C)  being too small for the relevant market. 
D)  not having enough managers.

Question 4

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

Accepted Answer

A)  maximize output. 
B)  minimize fixed costs. 
C)  maximize profit. 
D)  maximize costs. 
A)  maximize output. 
B)  minimize fixed costs. 
C)  maximize profit. 
D)  maximize costs.

Question 5

Use the following to answer question(s):    
-(Exhibit: Costs of Producing Bagels) The marginal cost of producing the sixth bagel is:

Accepted Answer

A)  $0.10. 
B)  $0.15. 
C)  $0.30. 
D)  $0.80. 
A)  $0.10. 
B)  $0.15. 
C)  $0.30. 
D)  $0.80.

Question 6

Use the following for questions 44-50.
  
-Marginal product _______ over the range of _______ and _______ over the range of _______ .

Accepted Answer

A)  falls; increasing marginal returns; rises; diminishing marginal returns 
B)  falls; decreasing total returns; rises; increasing total returns 
C)  rises; increasing marginal returns; rises; decreasing total returns 
D)  rises; increasing marginal returns; falls; diminishing marginal returns 
A)  falls; increasing marginal returns; rises; diminishing marginal returns 
B)  falls; decreasing total returns; rises; increasing total returns 
C)  rises; increasing marginal returns; rises; decreasing total returns 
D)  rises; increasing marginal returns; falls; diminishing marginal returns

Question 7

Assuming that all other factors of production are held constant, marginal product is the change in ________ output resulting from a 1-unit change in _______ .

Accepted Answer

A)  total; a variable input 
B)  total; a fixed input 
C)  total; average product 
D)  per unit; a fixed input 
A)  total; a variable input 
B)  total; a fixed input 
C)  total; average product 
D)  per unit; a fixed input

Question 8

The Case in Point on The Production of Fitness suggested:

Accepted Answer

A)  that the region of diminishing marginal returns to aerobic training began on the fourth day of training. 
B)  that the region of diminishing marginal returns is irrelevant in the context of aerobic training. 
C)  that athletes should ignore the law of diminishing marginal returns if they expect to excel in their sport. 
D)  none of the above. 
A)  that the region of diminishing marginal returns to aerobic training began on the fourth day of training. 
B)  that the region of diminishing marginal returns is irrelevant in the context of aerobic training. 
C)  that athletes should ignore the law of diminishing marginal returns if they expect to excel in their sport. 
D)  none of the above.

Question 9

In the third of the three ranges of production:

Accepted Answer

A)  the total product curve has an increasing slope. 
B)  the marginal product curve has a positive slope. 
C)  the marginal product curve intersects the total product curve. 
D)  marginal product is negative. 
A)  the total product curve has an increasing slope. 
B)  the marginal product curve has a positive slope. 
C)  the marginal product curve intersects the total product curve. 
D)  marginal product is negative.

Question 10

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

Accepted Answer

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

Question 11

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

Accepted Answer

A)  diseconomies of scale. 
B)  constant returns to scale. 
C)  economies of scale. 
D)  negative costs of production. 
A)  diseconomies of scale. 
B)  constant returns to scale. 
C)  economies of scale. 
D)  negative costs of production.

Question 12

If a firm produces 10 units of output and incurs $30 in average variable cost and $5 in average fixed cost, average total cost is:

Accepted Answer

A)  $30. 
B)  $35. 
C)  $50. 
D)  $300. 
A)  $30. 
B)  $35. 
C)  $50. 
D)  $300.

Question 13

Use the following for questions 53-56.
  
-(Exhibit: Production of Bagels) Diminishing marginal returns begin with the addition of the ________ worker.

Accepted Answer

A)  third 
B)  fourth 
C)  fifth 
D)  sixth 
A)  third 
B)  fourth 
C)  fifth 
D)  sixth

Question 14

Total cost divided by the quantity of output produced is:

Accepted Answer

A)  average total cost. 
B)  average fixed cost. 
C)  average product. 
D)  marginal cost. 
A)  average total cost. 
B)  average fixed cost. 
C)  average product. 
D)  marginal cost.

Question 15

At the long-run quantity of output, where the LRAC curve is at its lowest point, it is tangent to the ________ of the corresponding short-run average total cost curve.

Accepted Answer

A)  minimum 
B)  maximum 
C)  right of the minimum 
D)  left of the minimum 
A)  minimum 
B)  maximum 
C)  right of the minimum 
D)  left of the minimum

Question 16

Use the following for questions 44-50.
  
-(Exhibit: Total Product and Marginal Product) The slope of the total product curve between the 7th and 8th worker is:

Accepted Answer

A)  -0.5. 
B)  0. 
C)  1.6. 
D)  10.5. 
A)  -0.5. 
B)  0. 
C)  1.6. 
D)  10.5.

Question 17

In the first of the three ranges of production:

Accepted Answer

A)  the total product curve has a decreasing slope. 
B)  the marginal product curve has a positive slope. 
C)  the marginal product curve intersects the total product curve. 
D)  marginal product is negative. 
A)  the total product curve has a decreasing slope. 
B)  the marginal product curve has a positive slope. 
C)  the marginal product curve intersects the total product curve. 
D)  marginal product is negative.

Question 18

Variable costs include:

Accepted Answer

A)  the cost of raw materials. 
B)  the salaries of top management. 
C)  rent on leased buildings. 
D)  all of the above. 
A)  the cost of raw materials. 
B)  the salaries of top management. 
C)  rent on leased buildings. 
D)  all of the above.

Question 19

Use the following for questions 53-56.
  
-(Exhibit: Production of Bagels) The marginal product of the third worker is:

Accepted Answer

A)  9,000. 
B)  10,000. 
C)  12,000. 
D)  15,000. 
A)  9,000. 
B)  10,000. 
C)  12,000. 
D)  15,000.

Question 20

The short run is a period that is:

Accepted Answer

A)  less than one week. 
B)  less than one month. 
C)  long enough in which to vary output but not plant capacity. 
D)  long enough in which to make all economic adjustments. 
A)  less than one week. 
B)  less than one month. 
C)  long enough in which to vary output but not plant capacity. 
D)  long enough in which to make all economic adjustments.

In the long run all costs are variable.

Suppose that the first four units of a variable input generate corresponding total outputs per period of 200, 350, 450, and 500, respectively.The marginal product of the second unit of input is:

A firm that is experiencing diminishing returns in management's ability to use and disseminate information as it increases production in the long run is an example of:

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

Use the following to answer question(s): -(Exhibit: Costs of Producing Bagels) The marginal cost of producing the sixth bagel is:

Use the following for questions 44-50. -Marginal product ___ over the range of _ and _ over the range of ___ .

Assuming that all other factors of production are held constant, marginal product is the change in __ output resulting from a 1-unit change in _ .

The Case in Point on The Production of Fitness suggested:

In the third of the three ranges of production:

If marginal cost is less 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 from O to A indicates that a firm is experiencing:

If a firm produces 10 units of output and incurs $30 in average variable cost and $5 in average fixed cost, average total cost is:

Use the following for questions 53-56. -(Exhibit: Production of Bagels) Diminishing marginal returns begin with the addition of the ________ worker.

Total cost divided by the quantity of output produced is:

At the long-run quantity of output, where the LRAC curve is at its lowest point, it is tangent to the ________ of the corresponding short-run average total cost curve.

Use the following for questions 44-50. -(Exhibit: Total Product and Marginal Product) The slope of the total product curve between the 7th and 8th worker is:

In the first of the three ranges of production:

Variable costs include:

Use the following for questions 53-56. -(Exhibit: Production of Bagels) The marginal product of the third worker is:

The short run is a period that is:

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

In the long run all costs are variable.

Suppose that the first four units of a variable input generate corresponding total outputs per period of 200, 350, 450, and 500, respectively.The marginal product of the second unit of input is:

A firm that is experiencing diminishing returns in management's ability to use and disseminate information as it increases production in the long run is an example of:

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

Use the following to answer question(s): -(Exhibit: Costs of Producing Bagels) The marginal cost of producing the sixth bagel is:

Use the following for questions 44-50. -Marginal product _______ over the range of _______ and _______ over the range of _______ .

Assuming that all other factors of production are held constant, marginal product is the change in ________ output resulting from a 1-unit change in _______ .

The Case in Point on The Production of Fitness suggested:

In the third of the three ranges of production:

If marginal cost is less 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 from O to A indicates that a firm is experiencing:

If a firm produces 10 units of output and incurs $30 in average variable cost and $5 in average fixed cost, average total cost is:

Use the following for questions 53-56. -(Exhibit: Production of Bagels) Diminishing marginal returns begin with the addition of the ________ worker.

Total cost divided by the quantity of output produced is:

At the long-run quantity of output, where the LRAC curve is at its lowest point, it is tangent to the ________ of the corresponding short-run average total cost curve.

Use the following for questions 44-50. -(Exhibit: Total Product and Marginal Product) The slope of the total product curve between the 7th and 8th worker is:

In the first of the three ranges of production:

Variable costs include:

Use the following for questions 53-56. -(Exhibit: Production of Bagels) The marginal product of the third worker is:

The short run is a period that is:

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

Use the following for questions 44-50. -Marginal product ___ over the range of _ and _ over the range of ___ .

Assuming that all other factors of production are held constant, marginal product is the change in __ output resulting from a 1-unit change in _ .