Question 1

If you employ 20 workers in the production of picture frames, the way to determine the quantity of output these workers can produce is through a(n):

Accepted Answer

A)  profit function. 
B)  indifference curve. 
C)  budget constraint. 
D)  total product curve. 
A)  profit function. 
B)  indifference curve. 
C)  budget constraint. 
D)  total product curve.

Question 2

Marginal cost is the change in:

Accepted Answer

A)  total cost resulting from a 1-unit change in a variable input. 
B)  total cost resulting from a 1-unit change in quantity. 
C)  total cost resulting from a 1-unit change in average cost. 
D)  average cost resulting from a 1-unit change in quantity. 
A)  total cost resulting from a 1-unit change in a variable input. 
B)  total cost resulting from a 1-unit change in quantity. 
C)  total cost resulting from a 1-unit change in average cost. 
D)  average cost resulting from a 1-unit change in quantity.

Question 3

The long-run average cost curve is, in principle, tangent to an infinite number of short-run average cost curves.

Accepted Answer

A) True 
 B)False

Question 4

A firm becomes more capital intensive if it increases the ratio of capital to labor.

Accepted Answer

A) True 
 B)False

Question 5

The slope of the total product curve is:

Accepted Answer

A)  fixed product. 
B)  average product. 
C)  marginal product. 
D)  implicit product. 
A)  fixed product. 
B)  average product. 
C)  marginal product. 
D)  implicit product.

Question 6

When a total product curve is increasing at an increasing rate, its corresponding marginal product curve is:

Accepted Answer

A)  vertical. 
B)  horizontal. 
C)  rising. 
D)  falling. 
A)  vertical. 
B)  horizontal. 
C)  rising. 
D)  falling.

Question 7

The marginal product of labor is:

Accepted Answer

A)  the change in labor divided by the change in total product. 
B)  the slope of the total product of labor curve. 
C)  the change in average product divided by the change in the quantity of labor. 
D)  none of the above. 
A)  the change in labor divided by the change in total product. 
B)  the slope of the total product of labor curve. 
C)  the change in average product divided by the change in the quantity of labor. 
D)  none of the above.

Question 8

The change in total cost resulting from a 1-unit change in quantity is:

Accepted Answer

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

Question 9

The curve that shows the additional cost of each additional unit of output is called the:

Accepted Answer

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

Question 10

The lowest cost per unit at each level of output, assuming all factors of production are variable, is the:

Accepted Answer

A)  long-run average cost curve. 
B)  marginal cost curve. 
C)  average variable cost curve. 
D)  average total cost curve. 
A)  long-run average cost curve. 
B)  marginal cost curve. 
C)  average variable cost curve. 
D)  average total cost curve.

Question 11

A firm becomes more capital-intensive when it:

Accepted Answer

A)  reduces the ratio of output to capital. 
B)  increases the ratio of output to labor. 
C)  reduces the ratio of capital to labor. 
D)  increases the ratio of capital to labor. 
A)  reduces the ratio of output to capital. 
B)  increases the ratio of output to labor. 
C)  reduces the ratio of capital to labor. 
D)  increases the ratio of capital to labor.

Question 12

Average total cost is the ratio of:

Accepted Answer

A)  total cost to the marginal cost. 
B)  total cost to the quantity of output. 
C)  total cost to the amount of variable input. 
D)  marginal cost to the amount of variable input. 
A)  total cost to the marginal cost. 
B)  total cost to the quantity of output. 
C)  total cost to the amount of variable input. 
D)  marginal cost to the amount of variable input.

Question 13

The first 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 14

If marginal cost is rising, average variable cost must be rising.

Accepted Answer

A) True 
 B)False

Question 15

Marginal cost rises over the range of increasing marginal returns and falls over the range of diminishing marginal returns.

Accepted Answer

A) True 
 B)False

Question 16

The total variable cost curve can be derived directly from the:

Accepted Answer

A)  marginal product curve. 
B)  total product curve. 
C)  demand curve. 
D)  supply curve. 
A)  marginal product curve. 
B)  total product curve. 
C)  demand curve. 
D)  supply curve.

Question 17

The short run is defined as a:

Accepted Answer

A)  period of time less than 1 year. 
B)  period of time less than 6 months. 
C)  planning period in which some factors of production are considered to be fixed in quantity. 
D)  time period in which some factors of production are fixed, but it cannot exceed 1 year. 
A)  period of time less than 1 year. 
B)  period of time less than 6 months. 
C)  planning period in which some factors of production are considered to be fixed in quantity. 
D)  time period in which some factors of production are fixed, but it cannot exceed 1 year.

Question 18

Explain, identify, and/or discuss the relationship between each of the following pairs of terms:
a.capital intensive and labor intensive
b.economies of scale and the LRAC curve
c.short run and long run
d.negative marginal returns and total output

Accepted Answer

a. Capital intensive and labor intensive

Question 19

The total product curve indicates the quantity of inputs needed to produce a given level of output.

Accepted Answer

A) True 
 B)False

Question 20

Variable cost divided by the quantity of output produced is:

Accepted Answer

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

If you employ 20 workers in the production of picture frames, the way to determine the quantity of output these workers can produce is through a(n):

Marginal cost is the change in:

The long-run average cost curve is, in principle, tangent to an infinite number of short-run average cost curves.

A firm becomes more capital intensive if it increases the ratio of capital to labor.

The slope of the total product curve is:

When a total product curve is increasing at an increasing rate, its corresponding marginal product curve is:

The marginal product of labor is:

The change in total cost resulting from a 1-unit change in quantity is:

The curve that shows the additional cost of each additional unit of output is called the:

The lowest cost per unit at each level of output, assuming all factors of production are variable, is the:

A firm becomes more capital-intensive when it:

Average total cost is the ratio of:

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

If marginal cost is rising, average variable cost must be rising.

Marginal cost rises over the range of increasing marginal returns and falls over the range of diminishing marginal returns.

The total variable cost curve can be derived directly from the:

The short run is defined as a:

Explain, identify, and/or discuss the relationship between each of the following pairs of terms: a.capital intensive and labor intensive b.economies of scale and the LRAC curve c.short run and long run d.negative marginal returns and total output

The total product curve indicates the quantity of inputs needed to produce a given level of output.

Variable cost divided by the quantity of output produced 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

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Exam 8: Production and Cost

If you employ 20 workers in the production of picture frames, the way to determine the quantity of output these workers can produce is through a(n):

Marginal cost is the change in:

The long-run average cost curve is, in principle, tangent to an infinite number of short-run average cost curves.

A firm becomes more capital intensive if it increases the ratio of capital to labor.

The slope of the total product curve is:

When a total product curve is increasing at an increasing rate, its corresponding marginal product curve is:

The marginal product of labor is:

The change in total cost resulting from a 1-unit change in quantity is:

The curve that shows the additional cost of each additional unit of output is called the:

The lowest cost per unit at each level of output, assuming all factors of production are variable, is the:

A firm becomes more capital-intensive when it:

Average total cost is the ratio of:

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

If marginal cost is rising, average variable cost must be rising.

Marginal cost rises over the range of increasing marginal returns and falls over the range of diminishing marginal returns.

The total variable cost curve can be derived directly from the:

The short run is defined as a:

Explain, identify, and/or discuss the relationship between each of the following pairs of terms: a.capital intensive and labor intensive b.economies of scale and the LRAC curve c.short run and long run d.negative marginal returns and total output

The total product curve indicates the quantity of inputs needed to produce a given level of output.

Variable cost divided by the quantity of output produced 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