Question 1

The marginal product of labor is calculated using the formula

Accepted Answer

A)  L/Q. 
B)  ΔL/ΔQ. 
C)  ΔQ/ΔL. 
D)  Q/L. 
A)  L/Q. 
B)  ΔL/ΔQ. 
C)  ΔQ/ΔL. 
D)  Q/L.

Question 2

Which of the following statements is false?

Accepted Answer

A)  When marginal cost equals average total cost, average total cost is at its highest value. 
B)  The marginal cost curve intersects the average variable cost curve and the average total cost curve at their minimum points. 
C)  The difference between average total cost and average fixed cost is average variable cost. 
D)  Firms often refer to the process of lowering average fixed cost as "spreading the overhead." 
A)  When marginal cost equals average total cost, average total cost is at its highest value. 
B)  The marginal cost curve intersects the average variable cost curve and the average total cost curve at their minimum points. 
C)  The difference between average total cost and average fixed cost is average variable cost. 
D)  Firms often refer to the process of lowering average fixed cost as "spreading the overhead."

Question 3

In economics,what is the difference between the short run and the long run?

Accepted Answer

In economics,the short run refers to the

Question 4

The change in a firm's total cost from producing one more unit of a good or service is

Accepted Answer

A)  the result of economies of scale. 
B)  the definition of marginal product 
C)  the definition of marginal cost. 
D)  impossible to observe in large firms with many manufacturing plants. 
A)  the result of economies of scale. 
B)  the definition of marginal product 
C)  the definition of marginal cost. 
D)  impossible to observe in large firms with many manufacturing plants.

Question 5

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 6

Which of the following is an example of positive technological change?

Accepted Answer

A)  A firm offers workers a higher wage to work on weekends and at night. As a result, the firm is able to increase its weekly production of surf boards. 
B)  A firm buys an additional machine that it uses to make surf boards. As a result, the firm is able to increase its weekly production of surf boards. 
C)  A firm conducts a new advertising campaign. As a result, the demand for the firm's surf boards increases. 
D)  A firm's workers participate in a training program designed to increase the number of surf boards they can produce per day. 
A)  A firm offers workers a higher wage to work on weekends and at night. As a result, the firm is able to increase its weekly production of surf boards. 
B)  A firm buys an additional machine that it uses to make surf boards. As a result, the firm is able to increase its weekly production of surf boards. 
C)  A firm conducts a new advertising campaign. As a result, the demand for the firm's surf boards increases. 
D)  A firm's workers participate in a training program designed to increase the number of surf boards they can produce per day.

Question 7

At the minimum efficient scale

Accepted Answer

A)  all possible economies of scale have not been exhausted. 
B)  the firm has achieved the lowest possible average cost of production. 
C)  any increases in the scale of operation will encounter further economies of scale. 
D)  marginal cost is at its minimum. 
A)  all possible economies of scale have not been exhausted. 
B)  the firm has achieved the lowest possible average cost of production. 
C)  any increases in the scale of operation will encounter further economies of scale. 
D)  marginal cost is at its minimum.

Question 8

Figure 11-1  
-Refer to Figure 11-1.The marginal product of the 3rd worker is

Accepted Answer

A)  57. 
B)  19. 
C)  15. 
D)  11. 
A)  57. 
B)  19. 
C)  15. 
D)  11.

Question 9

An avocado orchard employs five full-time workers.Currently,the average product of labor is 120 pounds of avocados per day.The orchard hires a 6th full-time worker and his marginal product is 150 pounds of avocados.The average product of the six workers will now be

Accepted Answer

A)  more than 120 pounds. 
B)  less than 120 pounds. 
C)  equal to 120 pounds. 
D)  less than the marginal product of labor. 
A)  more than 120 pounds. 
B)  less than 120 pounds. 
C)  equal to 120 pounds. 
D)  less than the marginal product of labor.

Question 10

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.

Question 11

Average fixed costs of production

Accepted Answer

A)  remain constant. 
B)  will rise at a fixed rate as more is produced. 
C)  graph as a U-shaped curve. 
D)  fall as long as output is increased. 
A)  remain constant. 
B)  will rise at a fixed rate as more is produced. 
C)  graph as a U-shaped curve. 
D)  fall as long as output is increased.

Question 12

Which of the following are implicit costs for a typical firm?

Accepted Answer

A)  opportunity costs of capital owned and used by the firm 
B)  the cost of labor hired by the firm 
C)  utilities cost 
D)  a business licensing fee 
A)  opportunity costs of capital owned and used by the firm 
B)  the cost of labor hired by the firm 
C)  utilities cost 
D)  a business licensing fee

Question 13

Adam spent $10,000 on new equipment for his small business,"Adam's Fitness Studio." Membership at his fitness center is very low and at this rate,Adam needs an additional $12,000 per year to keep his studio open.Which of the following is true?

Accepted Answer

A)  The fixed cost of running the studio is $22,000. 
B)  The variable cost of running the studio is $22,000. 
C)  The $10,000 Adam spent on equipment is a fixed cost of business and the $12,000 he'll need to continue operations is a variable cost. 
D)  The $10,000 Adam spent on equipment is the total cost of starting the business and the $12,000 he'll need to continue operations is a marginal cost. 
A)  The fixed cost of running the studio is $22,000. 
B)  The variable cost of running the studio is $22,000. 
C)  The $10,000 Adam spent on equipment is a fixed cost of business and the $12,000 he'll need to continue operations is a variable cost. 
D)  The $10,000 Adam spent on equipment is the total cost of starting the business and the $12,000 he'll need to continue operations is a marginal cost.

Question 14

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 15

Which of the following statements is true?

Accepted Answer

A)  Opportunity cost = explicit cost - implicit cost. 
B)  Total cost = fixed cost + implicit cost. 
C)  Total cost = fixed cost + variable cost. 
D)  Variable cost = wages + salaries + benefits. 
A)  Opportunity cost = explicit cost - implicit cost. 
B)  Total cost = fixed cost + implicit cost. 
C)  Total cost = fixed cost + variable cost. 
D)  Variable cost = wages + salaries + benefits.

Question 16

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 17

If production displays increasing marginal returns,then

Accepted Answer

A)  total product rises by a constant amount throughout. 
B)  each new worker hired adds more to output than previous hires. 
C)  the firm must be adding new capital to keep boosting productivity. 
D)  total product reaches a maximum sooner than if production displayed decreasing returns. 
A)  total product rises by a constant amount throughout. 
B)  each new worker hired adds more to output than previous hires. 
C)  the firm must be adding new capital to keep boosting productivity. 
D)  total product reaches a maximum sooner than if production displayed decreasing returns.

Question 18

Economies of scale occur when

Accepted Answer

A)  a firm's long-run average total costs fall as it increases the quantity of output it produces. 
B)  the marginal product of labor is greater than the average product of labor. 
C)  short-run marginal cost falls. 
D)  the demand for a firm's output increases. 
A)  a firm's long-run average total costs fall as it increases the quantity of output it produces. 
B)  the marginal product of labor is greater than the average product of labor. 
C)  short-run marginal cost falls. 
D)  the demand for a firm's output increases.

Question 19

Figure 11-13  
-Refer to Figure 11-13.The lines shown in the diagram are isocost lines.A movement from CE to BD occurs when

Accepted Answer

A)  the price of capital increases while the price of labor remains unchanged. 
B)  the price of labor decreases while the price of capital remains unchanged. 
C)  the price of capital increases while the price of labor decreases. 
D)  the price of capital decreases while the price of labor increases. 
A)  the price of capital increases while the price of labor remains unchanged. 
B)  the price of labor decreases while the price of capital remains unchanged. 
C)  the price of capital increases while the price of labor decreases. 
D)  the price of capital decreases while the price of labor increases.

Question 20

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

The marginal product of labor is calculated using the formula

Which of the following statements is false?

In economics,what is the difference between the short run and the long run?

The change in a firm's total cost from producing one more unit of a good or service is

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

Which of the following is an example of positive technological change?

At the minimum efficient scale

Figure 11-1 -Refer to Figure 11-1.The marginal product of the 3rd worker is

An avocado orchard employs five full-time workers.Currently,the average product of labor is 120 pounds of avocados per day.The orchard hires a 6th full-time worker and his marginal product is 150 pounds of avocados.The average product of the six workers will now be

A "stockout" occurs when

Average fixed costs of production

Which of the following are implicit costs for a typical firm?

Adam spent $10,000 on new equipment for his small business,"Adam's Fitness Studio." Membership at his fitness center is very low and at this rate,Adam needs an additional $12,000 per year to keep his studio open.Which of the following is true?

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

Which of the following statements is true?

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.

If production displays increasing marginal returns,then

Economies of scale occur when

Figure 11-13 -Refer to Figure 11-13.The lines shown in the diagram are isocost lines.A movement from CE to BD occurs when

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

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

Filters

Exam 11: Technology, production, and Costs

The marginal product of labor is calculated using the formula

Which of the following statements is false?

In economics,what is the difference between the short run and the long run?

The change in a firm's total cost from producing one more unit of a good or service is

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

Which of the following is an example of positive technological change?

At the minimum efficient scale

Figure 11-1 -Refer to Figure 11-1.The marginal product of the 3rd worker is

An avocado orchard employs five full-time workers.Currently,the average product of labor is 120 pounds of avocados per day.The orchard hires a 6th full-time worker and his marginal product is 150 pounds of avocados.The average product of the six workers will now be

A "stockout" occurs when

Average fixed costs of production

Which of the following are implicit costs for a typical firm?

Adam spent $10,000 on new equipment for his small business,"Adam's Fitness Studio." Membership at his fitness center is very low and at this rate,Adam needs an additional $12,000 per year to keep his studio open.Which of the following is true?

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

Which of the following statements is true?

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.

If production displays increasing marginal returns,then

Economies of scale occur when

Figure 11-13 -Refer to Figure 11-13.The lines shown in the diagram are isocost lines.A movement from CE to BD occurs when

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

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

Filters