Question 1

A firm has successfully adopted a positive technological change when

Accepted Answer

A)  it can produce more output using the same inputs. 
B)  it produces less pollution in its production process. 
C)  it can pay its workers less yet increase its output. 
D)  it sees an increase in worker productivity. 
A)  it can produce more output using the same inputs. 
B)  it produces less pollution in its production process. 
C)  it can pay its workers less yet increase its output. 
D)  it sees an increase in worker productivity.

Question 2

The marginal product of labour is defined as

Accepted Answer

A)  the additional sales revenue that results when one more worker is hired. 
B)  the additional output that results when one more worker is hired, holding all other resources constant. 
C)  the additional number of workers required to produce one more unit of output. 
D)  the cost of hiring one more worker. 
A)  the additional sales revenue that results when one more worker is hired. 
B)  the additional output that results when one more worker is hired, holding all other resources constant. 
C)  the additional number of workers required to produce one more unit of output. 
D)  the cost of hiring one more worker.

Question 3

Average fixed cost is equal to

Accepted Answer

A)  the amount of total cost that does not change as output changes in the short run. 
B)  fixed cost divided by the quantity of output produced. 
C)  fixed cost multiplied by the quantity of output produced. 
D)  average total cost plus average variable cost. 
A)  the amount of total cost that does not change as output changes in the short run. 
B)  fixed cost divided by the quantity of output produced. 
C)  fixed cost multiplied by the quantity of output produced. 
D)  average total cost plus average variable cost.

Question 4

-Refer to Figure 7-14. Suppose Hilda hires labour at $8 per hour and capital costs $10 per unit. What is the minimum cost of producing 200 gooseberry pies?

Accepted Answer

A)  $3600 
B)  $1120 
C)  $592 
D)  $560 
A)  $3600 
B)  $1120 
C)  $592 
D)  $560

Question 5

-Refer to Figure 7-2. The average product of labour declines after L2 because

Accepted Answer

A)  the marginal product of labour is below the average product of labour. 
B)  the marginal product of labour is falling. 
C)  the marginal product of labour is negative. 
D)  the marginal product of labour is positive. 
A)  the marginal product of labour is below the average product of labour. 
B)  the marginal product of labour is falling. 
C)  the marginal product of labour is negative. 
D)  the marginal product of labour is positive.

Question 6

Fill in the missing values in the following table. Draw one graph showing how total output increases with the quantity of workers hired, and another graph showing the marginal product of labour and the average product of labour.

Accepted Answer

The answer of Fill in the missing values in the...

Question 7

All of the following cost curves are U-shaped except one. Which curve is not U-shaped?

Accepted Answer

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

Question 8

If production displays diseconomies of scale, the long-run average cost curve is

Accepted Answer

A)  above the short-run average total cost curve. 
B)  above the long-run marginal cost curve. 
C)  upward sloping. 
D)  downward sloping. 
A)  above the short-run average total cost curve. 
B)  above the long-run marginal cost curve. 
C)  upward sloping. 
D)  downward sloping.

Question 9

If the average variable cost curve is above the marginal cost curve, then

Accepted Answer

A)  marginal costs must be decreasing. 
B)  average variable costs must be increasing. 
C)  marginal costs must be increasing. 
D)  marginal costs can be either increasing or decreasing. 
A)  marginal costs must be decreasing. 
B)  average variable costs must be increasing. 
C)  marginal costs must be increasing. 
D)  marginal costs can be either increasing or decreasing.

Question 10

If a firm decreases its plant size and finds that its long-run average costs have decreased, then

Accepted Answer

A)  its labour is more productive in a smaller plant. 
B)  its diseconomies of scale are less. 
C)  the firm should reduce its plant size even more. 
D)  the firm is now profitable. 
A)  its labour is more productive in a smaller plant. 
B)  its diseconomies of scale are less. 
C)  the firm should reduce its plant size even more. 
D)  the firm is now profitable.

Question 11

When a firm produces more output using the same inputs or the same output using fewer inputs we say that the firm

Accepted Answer

A)  experiences an increase in demand. 
B)  experiences positive technological change. 
C)  will hire more workers in order to produce more output. 
D)  is operating in the short run. 
A)  experiences an increase in demand. 
B)  experiences positive technological change. 
C)  will hire more workers in order to produce more output. 
D)  is operating in the short run.

Question 12

The ABC Company manufactures routers that are used to provide high-speed Internet service. ABC sells an average of 1000 routers each month, but to exhaust economies of scale in its industry, ABC would have to sell 3000 routers each month. Therefore,

Accepted Answer

A)  ABC is experiencing diseconomies of scale. 
B)  ABC is experiencing diminishing returns. 
C)  to reach minimum efficient scale, ABC would have to sell at least 3000 routers each month. 
D)  ABC will soon go out of business. 
A)  ABC is experiencing diseconomies of scale. 
B)  ABC is experiencing diminishing returns. 
C)  to reach minimum efficient scale, ABC would have to sell at least 3000 routers each month. 
D)  ABC will soon go out of business.

Question 13

A firm's short-run average total cost curve is parallel to its short-run average variable cost curve.

Accepted Answer

A) True 
 B)False

Question 14

When a firm experiences a positive technological change

Accepted Answer

A)  the price of a share of the firm's stock rises. 
B)  the firm is able to produce more output using the same inputs, or the same output using fewer inputs. 
C)  the value of the firm's assets rises. 
D)  the firm will hire additional workers in order to increase production. 
A)  the price of a share of the firm's stock rises. 
B)  the firm is able to produce more output using the same inputs, or the same output using fewer inputs. 
C)  the value of the firm's assets rises. 
D)  the firm will hire additional workers in order to increase production.

Question 15

Which of the following is not a source of technological advancement for a producer?

Accepted Answer

A)  better trained workers 
B)  more efficient physical capital 
C)  higher skill level of managers 
D)  outsourcing some aspect of production 
A)  better trained workers 
B)  more efficient physical capital 
C)  higher skill level of managers 
D)  outsourcing some aspect of production

Question 16

Are the costs of utilities always fixed, always variable, or can they be both? Briefly explain.

Accepted Answer

For many firms, the cost of utilities ca

Question 17

Minimum efficient scale is defined as the level of output at which the short-run average total cost stops decreasing.

Accepted Answer

A) True 
 B)False

Question 18

-Refer to Figure 7-6. In the figure above, which letter represents the average variable cost curve?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
A)  A 
B)  B 
C)  C 
D)  D

Question 19

All of the following statements are true of the minimum efficient scale except one. Which one?

Accepted Answer

A)  All possible economies of scale have been exhausted. 
B)  The short-run average total cost curve's minimum point is equal to the long-run average cost curve's minimum point. 
C)  Any increase in the scale of operation will encounter diseconomies of scale. 
D)  An increase in the output level will increase profit. 
A)  All possible economies of scale have been exhausted. 
B)  The short-run average total cost curve's minimum point is equal to the long-run average cost curve's minimum point. 
C)  Any increase in the scale of operation will encounter diseconomies of scale. 
D)  An increase in the output level will increase profit.

Question 20

A 'stockout' occurs when

Accepted Answer

A)  brokers run out of shares of stock to sell of a particular company. 
B)  a disruption due to a power outage, etc., causes a temporary production shutdown. 
C)  a company holds too many goods in inventories. 
D)  a firm loses sales because goods consumers want are not available. 
A)  brokers run out of shares of stock to sell of a particular company. 
B)  a disruption due to a power outage, etc., causes a temporary production shutdown. 
C)  a company holds too many goods in inventories. 
D)  a firm loses sales because goods consumers want are not available.

A firm has successfully adopted a positive technological change when

The marginal product of labour is defined as

Average fixed cost is equal to

-Refer to Figure 7-14. Suppose Hilda hires labour at $8 per hour and capital costs $10 per unit. What is the minimum cost of producing 200 gooseberry pies?

-Refer to Figure 7-2. The average product of labour declines after L₂ because

Fill in the missing values in the following table. Draw one graph showing how total output increases with the quantity of workers hired, and another graph showing the marginal product of labour and the average product of labour.

All of the following cost curves are U-shaped except one. Which curve is not U-shaped?

If production displays diseconomies of scale, the long-run average cost curve is

If the average variable cost curve is above the marginal cost curve, then

If a firm decreases its plant size and finds that its long-run average costs have decreased, then

When a firm produces more output using the same inputs or the same output using fewer inputs we say that the firm

The ABC Company manufactures routers that are used to provide high-speed Internet service. ABC sells an average of 1000 routers each month, but to exhaust economies of scale in its industry, ABC would have to sell 3000 routers each month. Therefore,

A firm's short-run average total cost curve is parallel to its short-run average variable cost curve.

When a firm experiences a positive technological change

Which of the following is not a source of technological advancement for a producer?

Are the costs of utilities always fixed, always variable, or can they be both? Briefly explain.

Minimum efficient scale is defined as the level of output at which the short-run average total cost stops decreasing.

-Refer to Figure 7-6. In the figure above, which letter represents the average variable cost curve?

All of the following statements are true of the minimum efficient scale except one. Which one?

A 'stockout' occurs when

Economics Foundations and Models

Choices and Trade - Offs in the Market

Where Prices Come Frome : The Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency , Government Price Setting and Taxes

Concumer Choice and Behavioural Economics

Firms in Perfectly Compitive Markets

Monopoly Markets

Monopolistic Competition : The Competitive Model in More Realistic Setting

Oligopoly : Firms in Less Competitve Markets

The Market for Labour and Other Factors of Production

International Trade

Government Intervention in the Market

Externalities , Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters

Exam 7: Technology , Production and Costs

A firm has successfully adopted a positive technological change when

The marginal product of labour is defined as

Average fixed cost is equal to

-Refer to Figure 7-14. Suppose Hilda hires labour at $8 per hour and capital costs $10 per unit. What is the minimum cost of producing 200 gooseberry pies?

-Refer to Figure 7-2. The average product of labour declines after L2 because

Fill in the missing values in the following table. Draw one graph showing how total output increases with the quantity of workers hired, and another graph showing the marginal product of labour and the average product of labour.

All of the following cost curves are U-shaped except one. Which curve is not U-shaped?

If production displays diseconomies of scale, the long-run average cost curve is

If the average variable cost curve is above the marginal cost curve, then

If a firm decreases its plant size and finds that its long-run average costs have decreased, then

When a firm produces more output using the same inputs or the same output using fewer inputs we say that the firm

The ABC Company manufactures routers that are used to provide high-speed Internet service. ABC sells an average of 1000 routers each month, but to exhaust economies of scale in its industry, ABC would have to sell 3000 routers each month. Therefore,

A firm's short-run average total cost curve is parallel to its short-run average variable cost curve.

When a firm experiences a positive technological change

Which of the following is not a source of technological advancement for a producer?

Are the costs of utilities always fixed, always variable, or can they be both? Briefly explain.

Minimum efficient scale is defined as the level of output at which the short-run average total cost stops decreasing.

-Refer to Figure 7-6. In the figure above, which letter represents the average variable cost curve?

All of the following statements are true of the minimum efficient scale except one. Which one?

A 'stockout' occurs when

Economics Foundations and Models

Choices and Trade - Offs in the Market

Where Prices Come Frome : The Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency , Government Price Setting and Taxes

Concumer Choice and Behavioural Economics

Firms in Perfectly Compitive Markets

Monopoly Markets

Monopolistic Competition : The Competitive Model in More Realistic Setting

Oligopoly : Firms in Less Competitve Markets

The Market for Labour and Other Factors of Production

International Trade

Government Intervention in the Market

Externalities , Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters

-Refer to Figure 7-2. The average product of labour declines after L₂ because