Question 1

Which of the following would cause a firm's production function to shift upward?

Accepted Answer

A)  An increase in production by the firm. 
B)  Hiring more workers. 
C)  Increased investment in capital. 
D)  An increase in factor costs. 
A)  An increase in production by the firm. 
B)  Hiring more workers. 
C)  Increased investment in capital. 
D)  An increase in factor costs.

Question 2

What is the relationship between increasing returns to scale and decreasing long run average total costs?

Accepted Answer

In the long-run when adding an additiona

Question 3

During the long run:

Accepted Answer

A)  Output is limited by the law of diminishing returns. 
B)  The firm can build or lease any size factory. 
C)  Some inputs are fixed and some are variable. 
D)  There are no economic costs. 
A)  Output is limited by the law of diminishing returns. 
B)  The firm can build or lease any size factory. 
C)  Some inputs are fixed and some are variable. 
D)  There are no economic costs.

Question 4

Table 5.5-Production costs  
-In Table 5.5,the total cost of 3 units is:

Accepted Answer

A)  $25. 
B)  $15. 
C)  $10. 
D)  $3. 
A)  $25. 
B)  $15. 
C)  $10. 
D)  $3.

Question 5

The maximum output that can be produced from a set of inputs is measured by:

Accepted Answer

A)  The production function. 
B)  The demand schedule. 
C)  Fixed costs. 
D)  Marginal costs. 
A)  The production function. 
B)  The demand schedule. 
C)  Fixed costs. 
D)  Marginal costs.

Question 6

Marginal cost is equal to:

Accepted Answer

A)  Total cost divided by output. 
B)  The change in total cost divided by the change in output. 
C)  The change in total cost divided by the change in price. 
D)  Total cost divided by total revenue. 
A)  Total cost divided by output. 
B)  The change in total cost divided by the change in output. 
C)  The change in total cost divided by the change in price. 
D)  Total cost divided by total revenue.

Question 7

Table 5.1-Labor and output data  
-What is the marginal physical product of the fourth unit of labor in Table 5.1?

Accepted Answer

A)  51 
B)  42 
C)  12 
D)  9 
A)  51 
B)  42 
C)  12 
D)  9

Question 8

Marginal cost:

Accepted Answer

A)  Is the change in fixed cost divided by the change in quantity. 
B)  May initially decline and then increases as more output is produced. 
C)  May initially increase and then falls as more output is produced. 
D)  Is fixed cost and variable cost added together and then divided by quantity. 
A)  Is the change in fixed cost divided by the change in quantity. 
B)  May initially decline and then increases as more output is produced. 
C)  May initially increase and then falls as more output is produced. 
D)  Is fixed cost and variable cost added together and then divided by quantity.

Question 9

Table 5.6
Complete the following table,and use the information in the table to answer the question(s)below.  
-In Table 5.6,the average variable cost of 3 units of output is:

Accepted Answer

A)  $3. 
B)  $5. 
C)  $15. 
D)  $30. 
A)  $3. 
B)  $5. 
C)  $15. 
D)  $30.

Question 10

Rising marginal costs result from:

Accepted Answer

A)  Rising marginal physical product. 
B)  Falling prices of variable inputs. 
C)  Falling marginal physical product. 
D)  Rising prices of fixed inputs. 
A)  Rising marginal physical product. 
B)  Falling prices of variable inputs. 
C)  Falling marginal physical product. 
D)  Rising prices of fixed inputs.

Question 11

Which of the following is not a long-run investment decision?

Accepted Answer

A)  Whether to buy or lease equipment. 
B)  The size of the factory. 
C)  Whether or not to enter into the industry. 
D)  How intensively to use the existing plant. 
A)  Whether to buy or lease equipment. 
B)  The size of the factory. 
C)  Whether or not to enter into the industry. 
D)  How intensively to use the existing plant.

Question 12

Rising marginal costs are the result of:

Accepted Answer

A)  Increasing returns to scale. 
B)  Rising marginal physical product. 
C)  The law of variable returns. 
D)  The law of diminishing returns. 
A)  Increasing returns to scale. 
B)  Rising marginal physical product. 
C)  The law of variable returns. 
D)  The law of diminishing returns.

Question 13

Which of the following is a factor of production for Cathy's Cookies?

Accepted Answer

A)  Productivity 
B)  Flour 
C)  Money 
D)  Cookies 
A)  Productivity 
B)  Flour 
C)  Money 
D)  Cookies

Question 14

Suppose a firm has the following expenditures per day: $240 for wages,$150 for materials,and $80 for equipment rental.The owner of the firm owns the building in which it operates.If the firm were not operating in the building,he could rent the building for $70 per day.Total daily revenue is $600.
-What are the daily accounting costs for the firm described above?

Accepted Answer

A)  $320 
B)  $390 
C)  $470 
D)  $540 
A)  $320 
B)  $390 
C)  $470 
D)  $540

Question 15

When implicit costs exist,economic profit will be less than accounting profit.

Accepted Answer

A) True 
 B)False

Question 16

The limits to the production of any good are reflected in the:

Accepted Answer

A)  Law of demand. 
B)  Capacity curve. 
C)  Demand curve. 
D)  Production function. 
A)  Law of demand. 
B)  Capacity curve. 
C)  Demand curve. 
D)  Production function.

Question 17

If an additional unit of labor costs $25 and has an MPP of 40 units of output,the marginal cost is:

Accepted Answer

A)  $0.63. 
B)  $1.60. 
C)  $25.00. 
D)  $1,000.00 
A)  $0.63. 
B)  $1.60. 
C)  $25.00. 
D)  $1,000.00

Question 18

It is impossible to:

Accepted Answer

A)  Determine total costs in the short run. 
B)  Identify variable costs in the long run. 
C)  Identify variable costs in the short run. 
D)  Avoid fixed costs in the short run. 
A)  Determine total costs in the short run. 
B)  Identify variable costs in the long run. 
C)  Identify variable costs in the short run. 
D)  Avoid fixed costs in the short run.

Question 19

The sum of fixed cost and variable cost at any rate of output is equal to:

Accepted Answer

A)  Average total cost. 
B)  Total profit. 
C)  Total cost. 
D)  Marginal cost. 
A)  Average total cost. 
B)  Total profit. 
C)  Total cost. 
D)  Marginal cost.

Question 20

Figure 5.2:  
-In Figure 5.2,what is the total variable cost when output is 10 units?

Accepted Answer

A)  $500.00 
B)  $520.00 
C)  $720.00 
D)  $740.00 
A)  $500.00 
B)  $520.00 
C)  $720.00 
D)  $740.00

Which of the following would cause a firm's production function to shift upward?

What is the relationship between increasing returns to scale and decreasing long run average total costs?

During the long run:

Table 5.5-Production costs -In Table 5.5,the total cost of 3 units is:

The maximum output that can be produced from a set of inputs is measured by:

Marginal cost is equal to:

Table 5.1-Labor and output data -What is the marginal physical product of the fourth unit of labor in Table 5.1?

Marginal cost:

Table 5.6 Complete the following table,and use the information in the table to answer the question(s)below. -In Table 5.6,the average variable cost of 3 units of output is:

Rising marginal costs result from:

Which of the following is not a long-run investment decision?

Rising marginal costs are the result of:

Which of the following is a factor of production for Cathy's Cookies?

When implicit costs exist,economic profit will be less than accounting profit.

The limits to the production of any good are reflected in the:

If an additional unit of labor costs $25 and has an MPP of 40 units of output,the marginal cost is:

It is impossible to:

The sum of fixed cost and variable cost at any rate of output is equal to:

Figure 5.2: -In Figure 5.2,what is the total variable cost when output is 10 units?

The Challenge of Economics

The US Economy

Supply and Demand

Consumer Demand

Competition

Monopoly

The Labor Market

Government Intervention

The Business Cycle

Aggregate Supply and Demand

Fiscal Policy

Money and Banks

Monetary Policy

Economic Growth

Theory and Reality

International Trade

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Exam 5: Supply Decisions

Which of the following would cause a firm's production function to shift upward?

What is the relationship between increasing returns to scale and decreasing long run average total costs?

During the long run:

Table 5.5-Production costs -In Table 5.5,the total cost of 3 units is:

The maximum output that can be produced from a set of inputs is measured by:

Marginal cost is equal to:

Table 5.1-Labor and output data -What is the marginal physical product of the fourth unit of labor in Table 5.1?

Marginal cost:

Table 5.6 Complete the following table,and use the information in the table to answer the question(s)below. -In Table 5.6,the average variable cost of 3 units of output is:

Rising marginal costs result from:

Which of the following is not a long-run investment decision?

Rising marginal costs are the result of:

Which of the following is a factor of production for Cathy's Cookies?

When implicit costs exist,economic profit will be less than accounting profit.

The limits to the production of any good are reflected in the:

If an additional unit of labor costs $25 and has an MPP of 40 units of output,the marginal cost is:

It is impossible to:

The sum of fixed cost and variable cost at any rate of output is equal to:

Figure 5.2: -In Figure 5.2,what is the total variable cost when output is 10 units?

The Challenge of Economics

The US Economy

Supply and Demand

Consumer Demand

Competition

Monopoly

The Labor Market

Government Intervention

The Business Cycle

Aggregate Supply and Demand

Fiscal Policy

Money and Banks

Monetary Policy

Economic Growth

Theory and Reality

International Trade

Filters