Question 1

If another worker adds 9 units of output to a group of workers who had an average product of 7 units,then the average product of labour

Accepted Answer

A)  will remain the same. 
B)  will increase. 
C)  will decrease. 
D)  and what will happen to it cannot be determined. 
A)  will remain the same. 
B)  will increase. 
C)  will decrease. 
D)  and what will happen to it cannot be determined.

Question 2

Table 6-1
   Table 6-1 shows the technology of production at the Matsuko's Mushroom Farm for the month of May.
-Refer to Table 6-1.What is the marginal product of the 4th worker?

Accepted Answer

A)  137 kilograms 
B)  50 kilograms 
C)  12.5 kilograms 
D)  5 kilograms 
A)  137 kilograms 
B)  50 kilograms 
C)  12.5 kilograms 
D)  5 kilograms

Question 3

If fixed costs do not change,then marginal cost

Accepted Answer

A)  also remains constant. 
B)  equals the change in variable cost divided by the change in output. 
C)  equals the change in average variable cost divided by the change in output. 
D)  equals the change in average fixed cost divided by the change in output. 
A)  also remains constant. 
B)  equals the change in variable cost divided by the change in output. 
C)  equals the change in average variable cost divided by the change in output. 
D)  equals the change in average fixed cost divided by the change in output.

Question 4

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 5

Damian owns a tattoo parlour and has hired three tattoo artists to work for him.The marginal product of labour is 8 for the first artist,12 for the second artist,and 7 for the third artist.What is Damian's average product of labour for these three tattoo artists?

Accepted Answer

The average product of labour

Question 6

If,when a firm doubles all its inputs,its average cost of production decreases,then production displays

Accepted Answer

A)  diminishing returns. 
B)  economies of scale. 
C)  diseconomies of scale. 
D)  declining fixed costs. 
A)  diminishing returns. 
B)  economies of scale. 
C)  diseconomies of scale. 
D)  declining fixed costs.

Question 7

Jill Johnson owns a pizzeria.She currently produces 10 000 pizzas per month at a total cost of $500.If she produces one more pizza her total cost rises to $500.11.What does this tell us about Jill's marginal cost of producing pizzas?

Accepted Answer

A)  The marginal cost of producing pizzas is constant. 
B)  The marginal cost of producing pizzas is falling. 
C)  The marginal cost of producing pizzas cannot be determined without more information. 
D)  The marginal cost of producing pizzas is rising. 
A)  The marginal cost of producing pizzas is constant. 
B)  The marginal cost of producing pizzas is falling. 
C)  The marginal cost of producing pizzas cannot be determined without more information. 
D)  The marginal cost of producing pizzas is rising.

Question 8

A characteristic of the long run is

Accepted Answer

A)  there are fixed inputs. 
B)  all inputs can be varied. 
C)  plant capacity cannot be increased or decreased. 
D)  there are both fixed and variable inputs. 
A)  there are fixed inputs. 
B)  all inputs can be varied. 
C)  plant capacity cannot be increased or decreased. 
D)  there are both fixed and variable inputs.

Question 9

Which of the following costs will not change as output changes?

Accepted Answer

A)  Marginal cost 
B)  Total variable cost 
C)  Average variable cost 
D)  Total fixed cost 
A)  Marginal cost 
B)  Total variable cost 
C)  Average variable cost 
D)  Total fixed cost

Question 10

If a firm produces 20 units of output and incurs a total cost of $1000,and the variable cost is $700,calculate the firm's average fixed cost of production if it expands output to 25 units.

Accepted Answer

A)  $300 
B)  $15 
C)  $12 
D)  It is impossible to determine without additional information. 
A)  $300 
B)  $15 
C)  $12 
D)  It is impossible to determine without additional information.

Question 11

Which of the following equations is correct?

Accepted Answer

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

Question 12

The law of diminishing marginal returns

Accepted Answer

A)  sets in because not all workers are equally productive. 
B)  applies only in the short run. 
C)  holds even when there are no fixed factors. 
D)  ultimately explains why production displays diseconomies of scale. 
A)  sets in because not all workers are equally productive. 
B)  applies only in the short run. 
C)  holds even when there are no fixed factors. 
D)  ultimately explains why production displays diseconomies of scale.

Question 13

If,when a firm doubles all its inputs,its average cost of production increases,then production displays

Accepted Answer

A)  diminishing returns. 
B)  economies of scale. 
C)  diseconomies of scale. 
D)  declining fixed costs. 
A)  diminishing returns. 
B)  economies of scale. 
C)  diseconomies of scale. 
D)  declining fixed costs.

Question 14

Which of the following is not a reason why firms experience economies of scale?

Accepted Answer

A)  Technology can make it possible to increase production with a smaller increase in at least one input. 
B)  Workers and managers can become more specialised, enabling them to be more productive. 
C)  Larger firms may be able to purchase inputs at lower costs than smaller competitors. 
D)  As output increases, the managers can begin to have difficulty coordinating the operations of their firms. 
A)  Technology can make it possible to increase production with a smaller increase in at least one input. 
B)  Workers and managers can become more specialised, enabling them to be more productive. 
C)  Larger firms may be able to purchase inputs at lower costs than smaller competitors. 
D)  As output increases, the managers can begin to have difficulty coordinating the operations of their firms.

Question 15

Consider a manufacturing operation that uses specialised machinery and labour to produce its output.In this case,the input that is not fixed in the short run is labour.

Accepted Answer

A) True 
 B)False

Question 16

Is it possible for technological change to be negative? If so,give an example.

Accepted Answer

Technological change could be negative,f

Question 17

Economies of scale exist as a firm increases its size in the long run because of all of the following except

Accepted Answer

A)  the firm can afford more sophisticated technology in production. 
B)  labour and management can specialise even further in their tasks. 
C)  as a larger input buyer, the firm can purchase inputs at a lower per unit cost. 
D)  as a firm expands its production, its profit margin per unit of output increases. 
A)  the firm can afford more sophisticated technology in production. 
B)  labour and management can specialise even further in their tasks. 
C)  as a larger input buyer, the firm can purchase inputs at a lower per unit cost. 
D)  as a firm expands its production, its profit margin per unit of output increases.

Question 18

Use the general relationship between marginal and average values to explain why a marginal cost curve must intersect an average total cost curve and an average variable cost curve at their minimum points.

Accepted Answer

The relationship between marginal and av

Question 19

Average total cost is equal to

Accepted Answer

A)  average fixed cost minus average variable cost. 
B)  total cost divided by the level of output. 
C)  marginal cost plus variable cost. 
D)  total cost divided by the number of workers. 
A)  average fixed cost minus average variable cost. 
B)  total cost divided by the level of output. 
C)  marginal cost plus variable cost. 
D)  total cost divided by the number of workers.

Question 20

Table 6-6
  
-Refer to Table 6-6.Alicia Gregory owns a foot massage business.She leases 4 computer-controlled massage booths,for which she pays $125 per day.She cannot increase the number of machines she leases without giving the manufacturer 3 months' notice.She can hire as many workers as she wants at a cost of $75 per day per worker.These are the only two inputs she uses in her business.Use this information to fill in the columns in the above table.

Accepted Answer

The answer of Table 6-6
  
-Refer to Table 6-6.Alicia...

If another worker adds 9 units of output to a group of workers who had an average product of 7 units,then the average product of labour

Table 6-1 Table 6-1 shows the technology of production at the Matsuko's Mushroom Farm for the month of May. -Refer to Table 6-1.What is the marginal product of the 4th worker?

If fixed costs do not change,then marginal cost

The marginal product of labour is defined as

Damian owns a tattoo parlour and has hired three tattoo artists to work for him.The marginal product of labour is 8 for the first artist,12 for the second artist,and 7 for the third artist.What is Damian's average product of labour for these three tattoo artists?

If,when a firm doubles all its inputs,its average cost of production decreases,then production displays

Jill Johnson owns a pizzeria.She currently produces 10 000 pizzas per month at a total cost of $500.If she produces one more pizza her total cost rises to $500.11.What does this tell us about Jill's marginal cost of producing pizzas?

A characteristic of the long run is

Which of the following costs will not change as output changes?

If a firm produces 20 units of output and incurs a total cost of $1000,and the variable cost is $700,calculate the firm's average fixed cost of production if it expands output to 25 units.

Which of the following equations is correct?

The law of diminishing marginal returns

If,when a firm doubles all its inputs,its average cost of production increases,then production displays

Which of the following is not a reason why firms experience economies of scale?

Consider a manufacturing operation that uses specialised machinery and labour to produce its output.In this case,the input that is not fixed in the short run is labour.

Is it possible for technological change to be negative? If so,give an example.

Economies of scale exist as a firm increases its size in the long run because of all of the following except

Use the general relationship between marginal and average values to explain why a marginal cost curve must intersect an average total cost curve and an average variable cost curve at their minimum points.

Average total cost is equal to

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Healthcare

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

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Exam 6: Firms,the Stock Market,and Corporate Governance

If another worker adds 9 units of output to a group of workers who had an average product of 7 units,then the average product of labour

Table 6-1 Table 6-1 shows the technology of production at the Matsuko's Mushroom Farm for the month of May. -Refer to Table 6-1.What is the marginal product of the 4th worker?

If fixed costs do not change,then marginal cost

The marginal product of labour is defined as

Damian owns a tattoo parlour and has hired three tattoo artists to work for him.The marginal product of labour is 8 for the first artist,12 for the second artist,and 7 for the third artist.What is Damian's average product of labour for these three tattoo artists?

If,when a firm doubles all its inputs,its average cost of production decreases,then production displays

Jill Johnson owns a pizzeria.She currently produces 10 000 pizzas per month at a total cost of $500.If she produces one more pizza her total cost rises to $500.11.What does this tell us about Jill's marginal cost of producing pizzas?

A characteristic of the long run is

Which of the following costs will not change as output changes?

If a firm produces 20 units of output and incurs a total cost of $1000,and the variable cost is $700,calculate the firm's average fixed cost of production if it expands output to 25 units.

Which of the following equations is correct?

The law of diminishing marginal returns

If,when a firm doubles all its inputs,its average cost of production increases,then production displays

Which of the following is not a reason why firms experience economies of scale?

Consider a manufacturing operation that uses specialised machinery and labour to produce its output.In this case,the input that is not fixed in the short run is labour.

Is it possible for technological change to be negative? If so,give an example.

Economies of scale exist as a firm increases its size in the long run because of all of the following except

Use the general relationship between marginal and average values to explain why a marginal cost curve must intersect an average total cost curve and an average variable cost curve at their minimum points.

Average total cost is equal to

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Healthcare

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters