Question 1

A curve that shows all the combinations of two inputs,such as labor and capital,that will produce the same level of output is called

Accepted Answer

A) an isoquant. 
B) an isocost line 
C) a budget line. 
D) an optimal input combination curve. 
A) an isoquant. 
B) an isocost line 
C) a budget line. 
D) an optimal input combination curve.

Question 2

In the long run,all of a firm's inputs are variable.

Accepted Answer

A) True 
 B)False

Question 3

In 1955,the chairman of the Sony corporation offered to sell transistor radios through department stores in the United States.Sony based its selling price on its average total cost of production.If a store bought 5,000 radios,Sony would sell them at $29.95 each.For 10,000 there would be a discount,and for more than 10,000 the price would begin to climb.Based on this information,Sony began experiencing diseconomies of scale

Accepted Answer

A) at a quantity of less than 5,000 radios. 
B) at a quantity between 5,000 and 10,000 radios. 
C) at a quantity of 10,000 radios. 
D) at a quantity just greater than 10,000 radios. 
A) at a quantity of less than 5,000 radios. 
B) at a quantity between 5,000 and 10,000 radios. 
C) at a quantity of 10,000 radios. 
D) at a quantity just greater than 10,000 radios.

Question 4

What is an isocost line? What is the slope of an isocost line?

Accepted Answer

The isocost line shows all the combinati

Question 5

The processes a firm uses to turn inputs into outputs of goods and services is called

Accepted Answer

A) technology. 
B) technological change. 
C) marginal analysis. 
D) positive economic analysis. 
A) technology. 
B) technological change. 
C) marginal analysis. 
D) positive economic analysis.

Question 6

The level of output at which all economies of scale have been exhausted is known as

Accepted Answer

A) constant returns to scale. 
B) minimum efficient scale. 
C) the economically efficient output level. 
D) optimal economic size. 
A) constant returns to scale. 
B) minimum efficient scale. 
C) the economically efficient output level. 
D) optimal economic size.

Question 7

Which of the following can a firm do in the long run but not in the short run?

Accepted Answer

A) decrease the size of its physical plant 
B) reduce its rate of output by laying off workers 
C) increase its variable costs 
D) increase its use of raw materials 
A) decrease the size of its physical plant 
B) reduce its rate of output by laying off workers 
C) increase its variable costs 
D) increase its use of raw materials

Question 8

What is the difference between between total costs,variable costs,and fixed costs?

Accepted Answer

Total costs are the costs of all inputs

Question 9

Figure 11-6   Figure 11-6 illustrates the long-run average cost curve for a firm that produces picture frames.The graph also includes short-run average cost curves for three firm sizes: ATCa,ATCb and ATCc.
-Refer to Figure 11-6.Constant returns to scale

Accepted Answer

A) occur for output rates greater than 5,000 picture frames. 
B) occur between 5,000 and 20,000 picture frames per month. 
C) occur between 10,000 and 20,000 pictures frames per month. 
D) will shift the long-run average cost curve downward. 
A) occur for output rates greater than 5,000 picture frames. 
B) occur between 5,000 and 20,000 picture frames per month. 
C) occur between 10,000 and 20,000 pictures frames per month. 
D) will shift the long-run average cost curve downward.

Question 10

Which of the following equations is incorrect?

Accepted Answer

A) ATC - AFC = AVC 
B) AVC + AFC = ATC 
C) AFC = ATC - AVC 
D) ATC = AVC - AFC 
A) ATC - AFC = AVC 
B) AVC + AFC = ATC 
C) AFC = ATC - AVC 
D) ATC = AVC - AFC

Question 11

Increases in the marginal product of labor result from

Accepted Answer

A) the use of new technology. 
B) hiring more efficient workers. 
C) the division of labor and specialization. 
D) increasing the usage of all inputs. 
A) the use of new technology. 
B) hiring more efficient workers. 
C) the division of labor and specialization. 
D) increasing the usage of all inputs.

Question 12

Table 11-1
   Table 11-1 summarizes production at the Crunchy Apple Orchard for the month of April 2005.
-Refer to Table 11-1.What is the average product of labor when the orchard employs 5 workers?

Accepted Answer

A) 270 bushels 
B) 54 bushels 
C) 40 bushels 
D) 8 bushels 
A) 270 bushels 
B) 54 bushels 
C) 40 bushels 
D) 8 bushels

Question 13

Jennifer Borts moves her office from the premises she rents at a local mall to her home.As a result of this move

Accepted Answer

A) Jennifer's explicit costs fall and her implicit costs rise. 
B) Jennifer's total costs fall. 
C) Jennifer's implicit costs fall. 
D) Jennifer's opportunity costs fall. 
A) Jennifer's explicit costs fall and her implicit costs rise. 
B) Jennifer's total costs fall. 
C) Jennifer's implicit costs fall. 
D) Jennifer's opportunity costs fall.

Question 14

What is minimum efficient scale? What is likely to happen in the long run to firms that do not reach minimum efficient scale?

Accepted Answer

Minimum efficient scale is the lowest le

Question 15

Figure 11-3   Figure 11-3 shows the cost structure for a firm.
-Refer to Figure 11-3.If output is 100 units what is the fixed cost of production?

Accepted Answer

A) $8 
B) $800 
C) $1,000 
D) This cannot be determined from the diagram. 
A) $8 
B) $800 
C) $1,000 
D) This cannot be determined from the diagram.

Question 16

A change in the slope of an isocost line is due to a change in

Accepted Answer

A) the output price. 
B) the price of one or both inputs. 
C) total cost. 
D) quantity of output. 
A) the output price. 
B) the price of one or both inputs. 
C) total cost. 
D) quantity of output.

Question 17

Figure 11-2   Figure 11-2 contains information about the short run cost structure of a firm.
-Refer to Figure 11-2.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 18

Costs that change as output changes are called incremental costs.

Accepted Answer

A) True 
 B)False

Question 19

Suppose two countries use different combinations of inputs,such as labor and capital,to produce the same product.This implies all of the following except that

Accepted Answer

A) the two countries use different technologies to produce the product. 
B) the inputs are not equally productive in the two countries. 
C) the prices of the inputs are not the same in the countries. 
D) one country is more efficient in the production of the good than the other. 
A) the two countries use different technologies to produce the product. 
B) the inputs are not equally productive in the two countries. 
C) the prices of the inputs are not the same in the countries. 
D) one country is more efficient in the production of the good than the other.

Question 20

In 1955,the chairman of the Sony corporation offered to sell transistor radios through department stores in the United States.Sony based its selling price on its average total cost of production.If a store bought 5,000 radios,Sony would sell them at $29.95 each.For 10,000 there would be a discount,and for more than 10,000 the price would begin to climb.Based on this information,Sony experienced economies of scale

Accepted Answer

A) only at quantities up to 5,000 radios. 
B) only at quantities between 5,000 and 10,000 radios. 
C) only at quantities between 0 and 10,000 radios. 
D) only at quantities above 10,000 radios. 
A) only at quantities up to 5,000 radios. 
B) only at quantities between 5,000 and 10,000 radios. 
C) only at quantities between 0 and 10,000 radios. 
D) only at quantities above 10,000 radios.

A curve that shows all the combinations of two inputs,such as labor and capital,that will produce the same level of output is called

In the long run,all of a firm's inputs are variable.

What is an isocost line? What is the slope of an isocost line?

The processes a firm uses to turn inputs into outputs of goods and services is called

The level of output at which all economies of scale have been exhausted is known as

Which of the following can a firm do in the long run but not in the short run?

What is the difference between between total costs,variable costs,and fixed costs?

Figure 11-6 Figure 11-6 illustrates the long-run average cost curve for a firm that produces picture frames.The graph also includes short-run average cost curves for three firm sizes: ATCa,ATCb and ATCc. -Refer to Figure 11-6.Constant returns to scale

Which of the following equations is incorrect?

Increases in the marginal product of labor result from

Table 11-1 Table 11-1 summarizes production at the Crunchy Apple Orchard for the month of April 2005. -Refer to Table 11-1.What is the average product of labor when the orchard employs 5 workers?

Jennifer Borts moves her office from the premises she rents at a local mall to her home.As a result of this move

What is minimum efficient scale? What is likely to happen in the long run to firms that do not reach minimum efficient scale?

Figure 11-3 Figure 11-3 shows the cost structure for a firm. -Refer to Figure 11-3.If output is 100 units what is the fixed cost of production?

A change in the slope of an isocost line is due to a change in

Figure 11-2 Figure 11-2 contains information about the short run cost structure of a firm. -Refer to Figure 11-2.In the figure above which letter represents the average variable cost curve?

Costs that change as output changes are called incremental costs.

Suppose two countries use different combinations of inputs,such as labor and capital,to produce the same product.This implies all of the following except that

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

Externalities, environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, taxes, and the Distribution of Income

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Exam 11: Technology, production, and Costs

A curve that shows all the combinations of two inputs,such as labor and capital,that will produce the same level of output is called

In the long run,all of a firm's inputs are variable.

What is an isocost line? What is the slope of an isocost line?

The processes a firm uses to turn inputs into outputs of goods and services is called

The level of output at which all economies of scale have been exhausted is known as

Which of the following can a firm do in the long run but not in the short run?

What is the difference between between total costs,variable costs,and fixed costs?

Figure 11-6 Figure 11-6 illustrates the long-run average cost curve for a firm that produces picture frames.The graph also includes short-run average cost curves for three firm sizes: ATCa,ATCb and ATCc. -Refer to Figure 11-6.Constant returns to scale

Which of the following equations is incorrect?

Increases in the marginal product of labor result from

Table 11-1 Table 11-1 summarizes production at the Crunchy Apple Orchard for the month of April 2005. -Refer to Table 11-1.What is the average product of labor when the orchard employs 5 workers?

Jennifer Borts moves her office from the premises she rents at a local mall to her home.As a result of this move

What is minimum efficient scale? What is likely to happen in the long run to firms that do not reach minimum efficient scale?

Figure 11-3 Figure 11-3 shows the cost structure for a firm. -Refer to Figure 11-3.If output is 100 units what is the fixed cost of production?

A change in the slope of an isocost line is due to a change in

Figure 11-2 Figure 11-2 contains information about the short run cost structure of a firm. -Refer to Figure 11-2.In the figure above which letter represents the average variable cost curve?

Costs that change as output changes are called incremental costs.

Suppose two countries use different combinations of inputs,such as labor and capital,to produce the same product.This implies all of the following except that

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

Externalities, environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, taxes, and the Distribution of Income

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