Question 1

-Refer to the graph above to answer this question.Which of the following statements is correct?

Accepted Answer

A) Marginal product and marginal cost reach their minimum levels at the same output. 
B) Average product and average cost reach their maximum levels at the same output. 
C) AVC cuts MC at the latter's minimum point. 
D) AP is at a maximum when ATC is at a minimum. 
E) AP is at a maximum when AVC is at a minimum. 
A) Marginal product and marginal cost reach their minimum levels at the same output. 
B) Average product and average cost reach their maximum levels at the same output. 
C) AVC cuts MC at the latter's minimum point. 
D) AP is at a maximum when ATC is at a minimum. 
E) AP is at a maximum when AVC is at a minimum.

Question 2

Implicit costs are the amounts actually paid out in money.

Accepted Answer

A) True 
 B)False

Question 3

What is meant by the term short run?

Accepted Answer

A) A production period in which at least one input is variable. 
B) A production period in which at least one input is fixed. 
C) Any period shorter than one year. 
D) The time it takes for a capital asset to wear out. 
A) A production period in which at least one input is variable. 
B) A production period in which at least one input is fixed. 
C) Any period shorter than one year. 
D) The time it takes for a capital asset to wear out.

Question 4

Why are firms at times forced to operate at an output level less than at economic capacity?

Accepted Answer

Market conditions may be such that the f

Question 5

-In a diagram,how is the effect of an increase in the price of a variable input illustrated?

Accepted Answer

A) The MC,AVC,ATC and AFC curves would shift down. 
B) The MC,AVC,ATC and AFC curves would shift up. 
C) Only the MC,AVC,and ATC curves would shift down. 
D) Only the MC,AVC,and ATC curves would shift up. 
A) The MC,AVC,ATC and AFC curves would shift down. 
B) The MC,AVC,ATC and AFC curves would shift up. 
C) Only the MC,AVC,and ATC curves would shift down. 
D) Only the MC,AVC,and ATC curves would shift up.

Question 6

"Fill in the blank" in the table below and then answering the question below.
  
-Which of the following statements regarding average fixed costs is correct?

Accepted Answer

A) They are constant since fixed costs are fixed. 
B) They are equal to average variable cost less average total cost. 
C) When graphed,they are a horizontal line. 
D) When graphed,they are a straight line which comes out of the origin. 
E) They fall continuously as output increases. 
A) They are constant since fixed costs are fixed. 
B) They are equal to average variable cost less average total cost. 
C) When graphed,they are a horizontal line. 
D) When graphed,they are a straight line which comes out of the origin. 
E) They fall continuously as output increases.

Question 7

"Fill in the blank" in the table below and then answering the question below.
  
-Refer to the information above to answer this question.What is the value of total fixed cost?

Accepted Answer

A) $2. 
B) $6. 
C) $10. 
D) $20. 
E) $70. 
A) $2. 
B) $6. 
C) $10. 
D) $20. 
E) $70.

Question 8

Complete the table below.

Accepted Answer

The answer of Complete the table below.
  ...

Question 9

-Refer to the information above to answer this question.What is average fixed cost when output is 50?

Accepted Answer

A) Zero. 
B) $3. 
C) $20. 
D) $150. 
E) Cannot be determined. 
A) Zero. 
B) $3. 
C) $20. 
D) $150. 
E) Cannot be determined.

Question 10

-What is the sum of the marginal cost of all of the units produced?

Accepted Answer

A) Total cost. 
B) Average cost. 
C) Total variable cost. 
D) Total variable cost less total fixed cost. 
E) Total variable cost plus fixed cost. 
A) Total cost. 
B) Average cost. 
C) Total variable cost. 
D) Total variable cost less total fixed cost. 
E) Total variable cost plus fixed cost.

Question 11

-Which of the following statements about marginal cost is correct?

Accepted Answer

A) It is always below average total costs. 
B) It can be either above or below average total costs. 
C) It is always below average variable costs. 
D) It is always above average variable costs. 
A) It is always below average total costs. 
B) It can be either above or below average total costs. 
C) It is always below average variable costs. 
D) It is always above average variable costs.

Question 12

(a)Calculate marginal costs,total costs,average fixed costs,average variable costs and average total costs,given the following table.Fixed costs are $100.
   (b)Between what levels of output is there increasing marginal productivity?
(c)If labour were the only input to this production process,between what levels of output is the marginal product of labour falling?

Accepted Answer

(a)See the following table:
 @#IMG-DLM& 
(b)There

Question 13

It has been observed that all the members of peasant families in Third World countries often work intensively on small pieces of land.Is this rational?

Accepted Answer

Yes,this is rational since the peasants

Question 14

All of the following curves,except one,form a U shape when graphed.Which is the exception?

Accepted Answer

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

Question 15

-Refer to the information above to answer this question.If total variable cost decreases by 20% at all levels of output,what is TVC when output is 15?

Accepted Answer

A) $40. 
B) $80. 
C) $120. 
D) $160. 
A) $40. 
B) $80. 
C) $120. 
D) $160.

Question 16

-Refer to the information above to answer this question.What is average variable cost when output is 50?

Accepted Answer

A) $5. 
B) $5.20. 
C) $6. 
D) $8.20. 
A) $5. 
B) $5.20. 
C) $6. 
D) $8.20.

Question 17

The data in the table is for a firm in which labour is the only variable cost and each unit of labour costs the same regardless of how many units are bought.
  
-Refer to the information above to answer this question.As one reads down the TVC column,what is the pattern in the numbers?

Accepted Answer

A) They fall until the fifth unit of labour used and then rise. 
B) They rise until the fifth unit of labour used and then fall. 
C) They continuously rise. 
D) They continuously fall. 
E) There is no clear pattern. 
A) They fall until the fifth unit of labour used and then rise. 
B) They rise until the fifth unit of labour used and then fall. 
C) They continuously rise. 
D) They continuously fall. 
E) There is no clear pattern.

Question 18

-What could have caused the average total cost curve to increase from ATC1 to ATC2?

Accepted Answer

A) Marginal product of the factor input has increased. 
B) The price of the variable input has decreased. 
C) Average product has decreased. 
D) Average variable costs have decreased. 
E) Average fixed costs have decreased. 
A) Marginal product of the factor input has increased. 
B) The price of the variable input has decreased. 
C) Average product has decreased. 
D) Average variable costs have decreased. 
E) Average fixed costs have decreased.

Question 19

All of the following items,except one,are explicit costs.Which is the exception?

Accepted Answer

A) The weekly cost of a lease on a building. 
B) The total wages paid each week. 
C) The monthly hydro bill. 
D) Money withdrawn from the business by the owner. 
A) The weekly cost of a lease on a building. 
B) The total wages paid each week. 
C) The monthly hydro bill. 
D) Money withdrawn from the business by the owner.

Question 20

-Refer to the information above to answer this question.What is the value of marginal cost when MP is maximized?

Accepted Answer

A) $4. 
B) $5. 
C) $50. 
D) $80. 
E) $120. 
A) $4. 
B) $5. 
C) $50. 
D) $80. 
E) $120.

-Refer to the graph above to answer this question.Which of the following statements is correct?

Implicit costs are the amounts actually paid out in money.

What is meant by the term short run?

Why are firms at times forced to operate at an output level less than at economic capacity?

-In a diagram,how is the effect of an increase in the price of a variable input illustrated?

"Fill in the blank" in the table below and then answering the question below. -Which of the following statements regarding average fixed costs is correct?

"Fill in the blank" in the table below and then answering the question below. -Refer to the information above to answer this question.What is the value of total fixed cost?

Complete the table below.

-Refer to the information above to answer this question.What is average fixed cost when output is 50?

-What is the sum of the marginal cost of all of the units produced?

-Which of the following statements about marginal cost is correct?

It has been observed that all the members of peasant families in Third World countries often work intensively on small pieces of land.Is this rational?

All of the following curves,except one,form a U shape when graphed.Which is the exception?

-Refer to the information above to answer this question.If total variable cost decreases by 20% at all levels of output,what is TVC when output is 15?

-Refer to the information above to answer this question.What is average variable cost when output is 50?

The data in the table is for a firm in which labour is the only variable cost and each unit of labour costs the same regardless of how many units are bought. -Refer to the information above to answer this question.As one reads down the TVC column,what is the pattern in the numbers?

-What could have caused the average total cost curve to increase from ATC₁ to ATC₂?

All of the following items,except one,are explicit costs.Which is the exception?

-Refer to the information above to answer this question.What is the value of marginal cost when MP is maximized?

The Economic Problem

Demand and Supply: An Introduction

Demand and Supply: An Elaboration

Elasticity

Consumer Choice

Costs in the Long Run

Perfect Competition

An Evaluation of Competitive Markets

Monopoly

Imperfect Competition

The Factors of Production

International Trade

Filters

Exam 6: A Firms Production Decisions and Costs in the Short Run

-Refer to the graph above to answer this question.Which of the following statements is correct?

Implicit costs are the amounts actually paid out in money.

What is meant by the term short run?

Why are firms at times forced to operate at an output level less than at economic capacity?

-In a diagram,how is the effect of an increase in the price of a variable input illustrated?

"Fill in the blank" in the table below and then answering the question below. -Which of the following statements regarding average fixed costs is correct?

"Fill in the blank" in the table below and then answering the question below. -Refer to the information above to answer this question.What is the value of total fixed cost?

Complete the table below.

-Refer to the information above to answer this question.What is average fixed cost when output is 50?

-What is the sum of the marginal cost of all of the units produced?

-Which of the following statements about marginal cost is correct?

It has been observed that all the members of peasant families in Third World countries often work intensively on small pieces of land.Is this rational?

All of the following curves,except one,form a U shape when graphed.Which is the exception?

-Refer to the information above to answer this question.If total variable cost decreases by 20% at all levels of output,what is TVC when output is 15?

-Refer to the information above to answer this question.What is average variable cost when output is 50?

The data in the table is for a firm in which labour is the only variable cost and each unit of labour costs the same regardless of how many units are bought. -Refer to the information above to answer this question.As one reads down the TVC column,what is the pattern in the numbers?

-What could have caused the average total cost curve to increase from ATC1 to ATC2?

All of the following items,except one,are explicit costs.Which is the exception?

-Refer to the information above to answer this question.What is the value of marginal cost when MP is maximized?

The Economic Problem

Demand and Supply: An Introduction

Demand and Supply: An Elaboration

Elasticity

Consumer Choice

Costs in the Long Run

Perfect Competition

An Evaluation of Competitive Markets

Monopoly

Imperfect Competition

The Factors of Production

International Trade

Filters

-What could have caused the average total cost curve to increase from ATC₁ to ATC₂?