Question 1

If we have information about workers' marginal products,then total and average product can be found by

Accepted Answer

A)  dividing marginal costs by the number of workers. 
B)  multiplying the average marginal product times the number of workers. 
C)  summing the marginal values to find the total and multiplying it times the number of workers to get the average. 
D)  summing the marginal values to find the total and dividing it by the number of workers to get the average. 
A)  dividing marginal costs by the number of workers. 
B)  multiplying the average marginal product times the number of workers. 
C)  summing the marginal values to find the total and multiplying it times the number of workers to get the average. 
D)  summing the marginal values to find the total and dividing it by the number of workers to get the average.

Question 2

Figure 11-2  
-Refer to Figure 11-2.The average product of labor declines after L2 because

Accepted Answer

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

Question 3

Figure 11-2  
-Refer to Figure 11-2.The curve labeled "F" is

Accepted Answer

A)  the total product curve. 
B)  the average product curve. 
C)  the marginal product curve. 
D)  the output supply curve. 
A)  the total product curve. 
B)  the average product curve. 
C)  the marginal product curve. 
D)  the output supply curve.

Question 4

Table 11-1
   
Table 11-1 shows the technology of production at the Matsuko's Mushroom Farm for the month of May 2011.
-Refer to Table 11-1.What is the average product of labor when the farm hires 5 workers?

Accepted Answer

A)  4 pounds 
B)  10.8 bushels 
C)  38.2 pounds 
D)  54 pounds 
A)  4 pounds 
B)  10.8 bushels 
C)  38.2 pounds 
D)  54 pounds

Question 5

The president of Toyota's Georgetown plant was quoted as saying,"Demand for high volumes saps your energy.Over a period of time,it eroded our focus [and] thinned out the expertise and knowledge we painstakingly built up over the years." Based on this quote,what must be true of the plant's average cost of production curve?

Accepted Answer

A)  It is upward-sloping. 
B)  It is downward-sloping. 
C)  It is a ray from the origin. 
D)  It is U-shaped. 
A)  It is upward-sloping. 
B)  It is downward-sloping. 
C)  It is a ray from the origin. 
D)  It is U-shaped.

Question 6

Figure 11-7  
-Refer to Figure 11-7.The lines shown in the diagram are isocost lines.Which of the following shows an increase in the price of labor while the price of capital remains unchanged?

Accepted Answer

A)  the movement from AF to BD 
B)  the movement from AF to CE 
C)  the movement from BF to BD 
D)  the movement from BF to CE 
A)  the movement from AF to BD 
B)  the movement from AF to CE 
C)  the movement from BF to BD 
D)  the movement from BF to CE

Question 7

Who was the economist who first analyzed the advantages of specialization and the division of labor?
A) David Ricardo
B) Arthur C. Pigou
C) Ronald Coase
D) Adam Smith

Accepted Answer

The answer of Who was the economist who first analyzed...

Question 8

The law of diminishing marginal returns

Accepted Answer

A)  explains why the average total cost and marginal cost curves are U-shaped in the short run. 
B)  explains why the average total cost, average fixed cost and the marginal cost curves are U-shaped in the short run. 
C)  causes average total costs to rise at a decreasing rate as output increases. 
D)  causes the difference between average total cost and average variable cost to get smaller as output increases. 
A)  explains why the average total cost and marginal cost curves are U-shaped in the short run. 
B)  explains why the average total cost, average fixed cost and the marginal cost curves are U-shaped in the short run. 
C)  causes average total costs to rise at a decreasing rate as output increases. 
D)  causes the difference between average total cost and average variable cost to get smaller as output increases.

Question 9

The president of Toyota's Georgetown plant was quoted as saying,"Demand for high volumes saps your energy.Over a period of time,it eroded our focus [and] thinned out the expertise and knowledge we painstakingly built up over the years." This quote suggests that

Accepted Answer

A)  Toyota was experiencing an excess demand for its automobiles which it had difficulty keeping up with. 
B)  as Toyota expanded its capacity, it experienced diseconomies of scale. 
C)  Toyota was focused on "churning" out cars for which it did not invest sufficiently in training its workers. 
D)  high demand for Toyota's cars prevented the company from focusing on its strength: auto design. 
A)  Toyota was experiencing an excess demand for its automobiles which it had difficulty keeping up with. 
B)  as Toyota expanded its capacity, it experienced diseconomies of scale. 
C)  Toyota was focused on "churning" out cars for which it did not invest sufficiently in training its workers. 
D)  high demand for Toyota's cars prevented the company from focusing on its strength: auto design.

Question 10

If the marginal product of labor is decreasing,then marginal cost of production must be rising.

Accepted Answer

A) True 
 B)False

Question 11

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 labor

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 12

The production function shows

Accepted Answer

A)  the total cost of producing a given quantity of output. 
B)  the maximum output that can be produced from each possible quantity of inputs. 
C)  the technology used to produce output. 
D)  the incremental output gained by improving the production process. 
A)  the total cost of producing a given quantity of output. 
B)  the maximum output that can be produced from each possible quantity of inputs. 
C)  the technology used to produce output. 
D)  the incremental output gained by improving the production process.

Question 13

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)  average fixed cost 
E)  total fixed cost 
A)  marginal cost 
B)  total variable cost 
C)  average variable cost 
D)  average fixed cost 
E)  total fixed cost

Question 14

A positive technological change which decreases the price of inputs 1366 Technologies uses to produce solar wafers will cause

Accepted Answer

A)  1366 Technologies' average total cost curve and marginal cost curve to shift downward. 
B)  1366 Technologies' average total cost curve but not its marginal cost curve to shift downward. 
C)  1366 Technologies' marginal cost curve but not its average total cost curve to shift downward. 
D)  a movement downward along 1366 Technologies' current average total cost curve. 
A)  1366 Technologies' average total cost curve and marginal cost curve to shift downward. 
B)  1366 Technologies' average total cost curve but not its marginal cost curve to shift downward. 
C)  1366 Technologies' marginal cost curve but not its average total cost curve to shift downward. 
D)  a movement downward along 1366 Technologies' current average total cost curve.

Question 15

Table 11-3
  
 Table 11-3 shows cost data for Lotus Lanterns, a producer of whimsical night lights.
-Refer to Table 11-3.What is the average total cost of production when the firm produces 120 lanterns?

Accepted Answer

A)  $1,680 
B)  $72 
C)  $14 
D)  $12.3 
A)  $1,680 
B)  $72 
C)  $14 
D)  $12.3

Question 16

Implicit costs can be defined as

Accepted Answer

A)  accounting profit minus explicit cost. 
B)  the non-monetary opportunity cost of using the firm's own resources. 
C)  the deferred cost of production. 
D)  total cost minus fixed costs. 
A)  accounting profit minus explicit cost. 
B)  the non-monetary opportunity cost of using the firm's own resources. 
C)  the deferred cost of production. 
D)  total cost minus fixed costs.

Question 17

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 18

Golda Rush quit her job as a manager for Home Depot to start her own hair dressing salon,Goldilocks.She gave up a salary of $40,000 per year,invested her savings of $30,000 (which was earning 5 percent interest)and borrowed $10,000 from a close friend,agreeing to pay 5 percent interest per year.In her first year,Golda spent $18,000 to rent a salon,hired a part-time assistant for $12,000 and incurred another $15,000 on equipment and hairdressing material.Based on this information,what is the amount of her explicit costs?

Accepted Answer

A)  $45,000 
B)  $45,500 
C)  $47,000 
D)  $87,000 
A)  $45,000 
B)  $45,500 
C)  $47,000 
D)  $87,000

Question 19

Which of the following is a reason why a firm would experience diseconomies of scale?

Accepted Answer

A)  To finance an increase in the size of its plant a firm must borrow more money or sell more shares of stock. 
B)  As the size of the firm increases, it becomes more difficult to find markets where it doesn't already have operations. 
C)  As the size of the firm increases it becomes more difficult to coordinate the operations of its manufacturing plants. 
D)  As the size of the firm increases, it must operate in other countries where differences in language, customs and laws increase its average costs. 
A)  To finance an increase in the size of its plant a firm must borrow more money or sell more shares of stock. 
B)  As the size of the firm increases, it becomes more difficult to find markets where it doesn't already have operations. 
C)  As the size of the firm increases it becomes more difficult to coordinate the operations of its manufacturing plants. 
D)  As the size of the firm increases, it must operate in other countries where differences in language, customs and laws increase its average costs.

Question 20

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.

Exam 11: Technology, production, and Costs

If we have information about workers' marginal products,then total and average product can be found by

Figure 11-2 -Refer to Figure 11-2.The average product of labor declines after L2 because

Figure 11-2 -Refer to Figure 11-2.The curve labeled "F" is

Table 11-1 Table 11-1 shows the technology of production at the Matsuko's Mushroom Farm for the month of May 2011. -Refer to Table 11-1.What is the average product of labor when the farm hires 5 workers?

Figure 11-7 -Refer to Figure 11-7.The lines shown in the diagram are isocost lines.Which of the following shows an increase in the price of labor while the price of capital remains unchanged?

Who was the economist who first analyzed the advantages of specialization and the division of labor? A) David Ricardo B) Arthur C. Pigou C) Ronald Coase D) Adam Smith

The law of diminishing marginal returns

The president of Toyota's Georgetown plant was quoted as saying,"Demand for high volumes saps your energy.Over a period of time,it eroded our focus [and] thinned out the expertise and knowledge we painstakingly built up over the years." This quote suggests that

If the marginal product of labor is decreasing,then marginal cost of production must be rising.

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 labor

The production function shows

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

A positive technological change which decreases the price of inputs 1366 Technologies uses to produce solar wafers will cause

Table 11-3 Table 11-3 shows cost data for Lotus Lanterns, a producer of whimsical night lights. -Refer to Table 11-3.What is the average total cost of production when the firm produces 120 lanterns?

Implicit costs can be defined as

A characteristic of the long run is

Which of the following is a reason why a firm would experience diseconomies of scale?

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

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

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

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