Question 1

The marginal cost curve has a U shape because _________

Accepted Answer

A)  initially, the marginal product of labour falls, then rises 
B)  initially, the average product of labour rises, then falls 
C)  initially, the marginal product of labour rises, then falls 
D)  initially, the average cost of production rises, then falls 
A)  initially, the marginal product of labour falls, then rises 
B)  initially, the average product of labour rises, then falls 
C)  initially, the marginal product of labour rises, then falls 
D)  initially, the average cost of production rises, then falls

Question 2

Costs that change as output changes are called incremental costs.

Accepted Answer

A) True 
 B)False

Question 3

In the world oil market,oil is supplied up to the point where ________.

Accepted Answer

A)  the marginal cost of the last barrel is just equal to the price buyers are willing to pay for that last barrel 
B)  the marginal cost of the last barrel is zero 
C)  the marginal cost of the last barrel is the greatest distance from the price buyers are willing to pay for that last barrel 
D)  the marginal cost of the last barrel is at a maximum 
A)  the marginal cost of the last barrel is just equal to the price buyers are willing to pay for that last barrel 
B)  the marginal cost of the last barrel is zero 
C)  the marginal cost of the last barrel is the greatest distance from the price buyers are willing to pay for that last barrel 
D)  the marginal cost of the last barrel is at a maximum

Question 4

Which of the following are examples of a firm experiencing a positive technological change?
a.A firm is able to reduce its inputs by 15 per cent and still produce the same level of output.
b.A seminar attended by the firm's workers makes them more productive.
c.A firm adds 5 per cent to its workforce and is able to maintain its initial level of output.
d.A firm restructures its distribution system and is able to save on its shipping times.
e.A firm rearranges its warehouse and finds that it can use fewer workers to maintain its productivity level.
__________________________________________________________________________________________________________________________________________________________________________________________

Accepted Answer

Examples a,b,d,and e are examples of pos

Question 5

Figure 6.3   Fancy Footwear manufactures shoes. Figure 6.3 shows Fancy Footwear's marginal product of labour and average product of labour curves in the short run.
-Refer to Figure 6.3.Which of the following statements correctly describes the curves in the figure?

Accepted Answer

A)  The marginal product of labour curve is represented by curve A and the average product of labour curve is represented by curve B. 
B)  The marginal product of labour curve is represented by curve B and the average product of labour curve is represented by curve A. 
C)  Curve A could represent either the average product curve or the marginal product curve. Curve B represents the total product curve. 
D)  Curve B could represent either the average product curve or the marginal product curve. Curve A represents the total product curve. 
A)  The marginal product of labour curve is represented by curve A and the average product of labour curve is represented by curve B. 
B)  The marginal product of labour curve is represented by curve B and the average product of labour curve is represented by curve A. 
C)  Curve A could represent either the average product curve or the marginal product curve. Curve B represents the total product curve. 
D)  Curve B could represent either the average product curve or the marginal product curve. Curve A represents the total product curve.

Question 6

Which of the following is an example of market 'production',as used by economists?

Accepted Answer

A)  Garvey takes out a low-cost government loan to start his pet-sitting business. 
B)  Heidi makes a pizza for her family's dinner. 
C)  Katrina works as a cashier at the local produce stand. 
D)  The theatre and film studies department in Fine Arts University stages a play at the local theatre. 
A)  Garvey takes out a low-cost government loan to start his pet-sitting business. 
B)  Heidi makes a pizza for her family's dinner. 
C)  Katrina works as a cashier at the local produce stand. 
D)  The theatre and film studies department in Fine Arts University stages a play at the local theatre.

Question 7

Long-run cost curves are U shaped because _________.

Accepted Answer

A)  of the law of demand 
B)  of the law of diminishing returns 
C)  of economies and diseconomies of scale 
D)  of the law of supply 
A)  of the law of demand 
B)  of the law of diminishing returns 
C)  of economies and diseconomies of scale 
D)  of the law of supply

Question 8

Stan owns a software design business.He does not have time to expand his office space or redesign the layout of his office.He can increase the amount of work he does by working more hours,asking his current employees to work more hours,or hiring more employees.The relationship between Stan's inputs and the maximum output his firm can produce is called his ________.

Accepted Answer

A)  long-run production function 
B)  production possibility frontier 
C)  short-run production function 
D)  cost function 
A)  long-run production function 
B)  production possibility frontier 
C)  short-run production function 
D)  cost function

Question 9

If production displays constant returns to scale,then all economies of scale have been exhausted.

Accepted Answer

A) True 
 B)False

Question 10

A U-shaped long run average cost curve implies that a firm experiences economies of scale at low levels of production and diseconomies of scale at high levels of production.

Accepted Answer

A) True 
 B)False

Question 11

Describe the difference between technology and positive technological change.
__________________________________________________________________________________________________________________________________________________________________________________________

Accepted Answer

A firm's technology refers to the proces

Question 12

What is the formula for total fixed cost?

Accepted Answer

A)  TFC = TC + TVC. 
B)  TFC = TVC − TC. 
C)  TFC = TC/TVC. 
D)  TFC = TC − TVC. 
A)  TFC = TC + TVC. 
B)  TFC = TVC − TC. 
C)  TFC = TC/TVC. 
D)  TFC = TC − TVC.

Question 13

Which of the following is true at the output level where average total cost is at its minimum?

Accepted Answer

A)  Marginal cost equals average total cost. 
B)  Average variable cost equals fixed cost. 
C)  Marginal cost equals average variable cost. 
D)  Average total cost equals average fixed cost. 
A)  Marginal cost equals average total cost. 
B)  Average variable cost equals fixed cost. 
C)  Marginal cost equals average variable cost. 
D)  Average total cost equals average fixed cost.

Question 14

Average total cost is equal to average variable cost minus average fixed cost.

Accepted Answer

A) True 
 B)False

Question 15

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 16

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 17

As the level of output increases,what happens to the value of average fixed cost,and what happens to the difference between the value of average total cost and average variable cost?
__________________________________________________________________________________________________________________________________________________________________________________________

Accepted Answer

As the level of output increases,the val

Question 18

When a firm produces 50 000 units of output,its total cost equals $6.5 million.When it increases its production to 70 000 units of output,its total cost increases to $9.4 million.Within this range,the marginal cost of an additional unit of output is ________.

Accepted Answer

A)  $41.43 
B)  $134.29 
C)  $135 
D)  $145 
A)  $41.43 
B)  $134.29 
C)  $135 
D)  $145

Question 19

Which of the following statements is true?

Accepted Answer

A)  The average product of labour is at its maximum when the average product of labour equals the marginal product of labour. 
B)  The average product of labour is at its minimum when the average product of labour equals the marginal product of labour. 
C)  The average product of labour tells us how much output changes as the quantity of workers hired changes. 
D)  Whenever the marginal product of labour is greater than the average product of labour the average product of labour must be decreasing. 
A)  The average product of labour is at its maximum when the average product of labour equals the marginal product of labour. 
B)  The average product of labour is at its minimum when the average product of labour equals the marginal product of labour. 
C)  The average product of labour tells us how much output changes as the quantity of workers hired changes. 
D)  Whenever the marginal product of labour is greater than the average product of labour the average product of labour must be decreasing.

Question 20

Which of the following is a fixed cost?

Accepted Answer

A)  Payment to hire a security worker to guard the gate to the factory around the clock 
B)  Wages to hire assembly line workers 
C)  Payments to an electric utility 
D)  Costs of raw materials 
A)  Payment to hire a security worker to guard the gate to the factory around the clock 
B)  Wages to hire assembly line workers 
C)  Payments to an electric utility 
D)  Costs of raw materials

The marginal cost curve has a U shape because _________

Costs that change as output changes are called incremental costs.

In the world oil market,oil is supplied up to the point where ________.

Figure 6.3 Fancy Footwear manufactures shoes. Figure 6.3 shows Fancy Footwear's marginal product of labour and average product of labour curves in the short run. -Refer to Figure 6.3.Which of the following statements correctly describes the curves in the figure?

Which of the following is an example of market 'production',as used by economists?

Long-run cost curves are U shaped because _________.

If production displays constant returns to scale,then all economies of scale have been exhausted.

A U-shaped long run average cost curve implies that a firm experiences economies of scale at low levels of production and diseconomies of scale at high levels of production.

Describe the difference between technology and positive technological change. __________________________________________________________________________________________________________________________________________________________________________________________

What is the formula for total fixed cost?

Which of the following is true at the output level where average total cost is at its minimum?

Average total cost is equal to average variable cost minus average fixed cost.

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

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

When a firm produces 50 000 units of output,its total cost equals $6.5 million.When it increases its production to 70 000 units of output,its total cost increases to $9.4 million.Within this range,the marginal cost of an additional unit of output is ________.

Which of the following statements is true?

Which of the following is a fixed cost?

Economics: Foundations and Models

Choices and Trade-Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency,government Price Setting and Taxes

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition and Oligopoly

The Markets for Labour and Other Factors of Production

Government Intervention in the Market

Social Policy and Inequality

Gdp: Measuring Total Production, income and Economic Growth

Unemployment and Inflation

Aggregate Demand and Aggregate Supply Analysis

Money,banks and the Reserve Bank of Australia

Monetary Policy

Fiscal Policy

Comparative Advantage and the Gains From International Trade

Macroeconomics in an Open Economy

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Exam 6: Technology,production and Costs

The marginal cost curve has a U shape because _________

Costs that change as output changes are called incremental costs.

In the world oil market,oil is supplied up to the point where ________.

Figure 6.3 Fancy Footwear manufactures shoes. Figure 6.3 shows Fancy Footwear's marginal product of labour and average product of labour curves in the short run. -Refer to Figure 6.3.Which of the following statements correctly describes the curves in the figure?

Which of the following is an example of market 'production',as used by economists?

Long-run cost curves are U shaped because _________.

If production displays constant returns to scale,then all economies of scale have been exhausted.

A U-shaped long run average cost curve implies that a firm experiences economies of scale at low levels of production and diseconomies of scale at high levels of production.

Describe the difference between technology and positive technological change. __________________________________________________________________________________________________________________________________________________________________________________________

What is the formula for total fixed cost?

Which of the following is true at the output level where average total cost is at its minimum?

Average total cost is equal to average variable cost minus average fixed cost.

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

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

When a firm produces 50 000 units of output,its total cost equals $6.5 million.When it increases its production to 70 000 units of output,its total cost increases to $9.4 million.Within this range,the marginal cost of an additional unit of output is ________.

Which of the following statements is true?

Which of the following is a fixed cost?

Economics: Foundations and Models

Choices and Trade-Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency,government Price Setting and Taxes

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition and Oligopoly

The Markets for Labour and Other Factors of Production

Government Intervention in the Market

Social Policy and Inequality

Gdp: Measuring Total Production, income and Economic Growth

Unemployment and Inflation

Aggregate Demand and Aggregate Supply Analysis

Money,banks and the Reserve Bank of Australia

Monetary Policy

Fiscal Policy

Comparative Advantage and the Gains From International Trade

Macroeconomics in an Open Economy

Filters