Question 1

Figure 11-1  
-Refer to Figure 11-1.Diminishing marginal productivity sets in after

Accepted Answer

A)  the 2nd worker is hired. 
B)  the 3rd worker is hired. 
C)  the 4th worker is hired. 
D)  the 5th worker is hired. 
A)  the 2nd worker is hired. 
B)  the 3rd worker is hired. 
C)  the 4th worker is hired. 
D)  the 5th worker is hired.

Question 2

If the average variable cost curve is above the marginal cost curve,then

Accepted Answer

A)  marginal costs must be decreasing. 
B)  average variable costs must be increasing. 
C)  marginal costs must be increasing. 
D)  marginal costs can be either increasing or decreasing. 
A)  marginal costs must be decreasing. 
B)  average variable costs must be increasing. 
C)  marginal costs must be increasing. 
D)  marginal costs can be either increasing or decreasing.

Question 3

If an airport decides to expand by building an additional passenger terminal,and in doing so it lowers its average cost per airplane landing,it was previously operating at

Accepted Answer

A)  minimum efficient scale. 
B)  more than minimum efficient scale. 
C)  less than minimum efficient scale. 
D)  minimum capacity. 
A)  minimum efficient scale. 
B)  more than minimum efficient scale. 
C)  less than minimum efficient scale. 
D)  minimum capacity.

Question 4

A downward sloping marginal product of labor curve demonstrates the law of diminishing marginal returns.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Figure 11-3   Fancy Footwear manufactures shoes. Figure 11-3 shows Fancy Footwear's marginal product of labor and average product of labor curves in the short run.
-Refer to Figure 11-3.For what quantity of labor does production display diminishing returns?

Accepted Answer

A)  for more than 1 units of labor 
B)  for more than 4 unit of labor 
C)  for more than 5 units of labor 
D)  for more than 8 units of labor 
A)  for more than 1 units of labor 
B)  for more than 4 unit of labor 
C)  for more than 5 units of labor 
D)  for more than 8 units of labor

Question 7

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 8

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 9

Figure 11-11   Figure 11-11 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: ATCS1U1B1aS1U1B0, ATCS1U1B1bS1U1B0 and ATCS1U1B1cS1U1B0.
-Refer to Figure 11-11.For output rates greater than 20,000 picture frames per month

Accepted Answer

A)  the firm will not make a profit because the average cost of production will be too high. 
B)  the firm will experience diseconomies of scale. 
C)  the firm will experience diminishing returns. 
D)  the short-run average total cost will equal the long-run average total cost of production. 
A)  the firm will not make a profit because the average cost of production will be too high. 
B)  the firm will experience diseconomies of scale. 
C)  the firm will experience diminishing returns. 
D)  the short-run average total cost will equal the long-run average total cost of production.

Question 10

Figure 11-1  
-Refer to Figure 11-1.The marginal product of the 7th worker is

Accepted Answer

A)  66. 
B)  9.43. 
C)  2. 
D)  -2. 
A)  66. 
B)  9.43. 
C)  2. 
D)  -2.

Question 11

Figure 11-12  
-Refer to Figure 11-12.The movement from isoquant T to isoquant U depicts

Accepted Answer

A)  a change in preferences with regards to input usage. 
B)  an increase in the cost of production. 
C)  an increase in output. 
D)  an increase in labor usage holding capital and output constant. 
A)  a change in preferences with regards to input usage. 
B)  an increase in the cost of production. 
C)  an increase in output. 
D)  an increase in labor usage holding capital and output constant.

Question 12

Maximizing the level of output for a given total cost of production

Accepted Answer

A)  is equivalent to producing the profit maximizing output level. 
B)  is equivalent to minimizing cost for a given level of output. 
C)  necessitates using only relatively low-priced inputs. 
D)  will maximize total revenue. 
A)  is equivalent to producing the profit maximizing output level. 
B)  is equivalent to minimizing cost for a given level of output. 
C)  necessitates using only relatively low-priced inputs. 
D)  will maximize total revenue.

Question 13

If a firm's long-run average total curve shows that it can produce 5,000 DVDs at an average cost of $2.00 and 15,000 DVDs at an average cost of $1.50 this is evidence of

Accepted Answer

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

Question 14

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 15

Suppose the price of capital and labor remain constant but that the average educational level of workers has increased and therefore,productivity of labor increases.This would lead a firm

Accepted Answer

A)  to adopt a more capital-intensive production technology. 
B)  to adopt a more labor-intensive technology. 
C)  to keep its output and production technology unchanged, but to use fewer units of labor. 
D)  to use only labor to produce the product. 
A)  to adopt a more capital-intensive production technology. 
B)  to adopt a more labor-intensive technology. 
C)  to keep its output and production technology unchanged, but to use fewer units of labor. 
D)  to use only labor to produce the product.

Question 16

If the total cost of producing 20 units of output is $1,000 and the average variable cost is $35,what is the firm's average fixed cost at that level of output?

Accepted Answer

A)  $65 
B)  $50 
C)  $15 
D)  It is impossible to determine without additional information. 
A)  $65 
B)  $50 
C)  $15 
D)  It is impossible to determine without additional information.

Question 17

State the law of diminishing returns.How do diminishing returns differ from diseconomies of scale? Be sure to define diseconomies of scale in your answer.

Accepted Answer

The law of diminishing returns states th

Question 18

When a firm experiences a positive technological change

Accepted Answer

A)  the price of a share of the firm's stock rises. 
B)  the firm is able to produce more output using the same inputs, or the same output using fewer inputs. 
C)  the value of the firm's assets rises. 
D)  the firm will hire additional workers in order to increase production. 
A)  the price of a share of the firm's stock rises. 
B)  the firm is able to produce more output using the same inputs, or the same output using fewer inputs. 
C)  the value of the firm's assets rises. 
D)  the firm will hire additional workers in order to increase production.

Question 19

Figure 11-2  
-Refer to Figure 11-2.Short run output is maximized at

Accepted Answer

A)  L1. 
B)  L2. 
C)  L3. 
D)  insufficient information to determine 
A)  L1. 
B)  L2. 
C)  L3. 
D)  insufficient information to determine

Question 20

If the marginal product of labor is 45 units of output and the marginal product of capital is 56 units of output while the wage rate is $20 per worker and the cost of capital is $28 per machine,are these two inputs being used in the least cost combination and what should be done if they are not?

Accepted Answer

The marginal product per dollar spent on

Figure 11-1 -Refer to Figure 11-1.Diminishing marginal productivity sets in after

If the average variable cost curve is above the marginal cost curve,then

If an airport decides to expand by building an additional passenger terminal,and in doing so it lowers its average cost per airplane landing,it was previously operating at

A downward sloping marginal product of labor curve demonstrates the law of diminishing marginal returns.

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

Figure 11-3 Fancy Footwear manufactures shoes. Figure 11-3 shows Fancy Footwear's marginal product of labor and average product of labor curves in the short run. -Refer to Figure 11-3.For what quantity of labor does production display diminishing returns?

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

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

Figure 11-11 Figure 11-11 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: ATC_a, ATC_b and ATC_c. -Refer to Figure 11-11.For output rates greater than 20,000 picture frames per month

Figure 11-1 -Refer to Figure 11-1.The marginal product of the 7th worker is

Figure 11-12 -Refer to Figure 11-12.The movement from isoquant T to isoquant U depicts

Maximizing the level of output for a given total cost of production

If a firm's long-run average total curve shows that it can produce 5,000 DVDs at an average cost of $2.00 and 15,000 DVDs at an average cost of $1.50 this is evidence of

The law of diminishing marginal returns

Suppose the price of capital and labor remain constant but that the average educational level of workers has increased and therefore,productivity of labor increases.This would lead a firm

If the total cost of producing 20 units of output is $1,000 and the average variable cost is $35,what is the firm's average fixed cost at that level of output?

State the law of diminishing returns.How do diminishing returns differ from diseconomies of scale? Be sure to define diseconomies of scale in your answer.

When a firm experiences a positive technological change

Figure 11-2 -Refer to Figure 11-2.Short run output is maximized at

If the marginal product of labor is 45 units of output and the marginal product of capital is 56 units of output while the wage rate is $20 per worker and the cost of capital is $28 per machine,are these two inputs being used in the least cost combination and what should be done if they are not?

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

Figure 11-1 -Refer to Figure 11-1.Diminishing marginal productivity sets in after

If the average variable cost curve is above the marginal cost curve,then

If an airport decides to expand by building an additional passenger terminal,and in doing so it lowers its average cost per airplane landing,it was previously operating at

A downward sloping marginal product of labor curve demonstrates the law of diminishing marginal returns.

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

Figure 11-3 Fancy Footwear manufactures shoes. Figure 11-3 shows Fancy Footwear's marginal product of labor and average product of labor curves in the short run. -Refer to Figure 11-3.For what quantity of labor does production display diminishing returns?

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

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

Figure 11-11 Figure 11-11 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 11-11.For output rates greater than 20,000 picture frames per month

Figure 11-1 -Refer to Figure 11-1.The marginal product of the 7th worker is

Figure 11-12 -Refer to Figure 11-12.The movement from isoquant T to isoquant U depicts

Maximizing the level of output for a given total cost of production

If a firm's long-run average total curve shows that it can produce 5,000 DVDs at an average cost of $2.00 and 15,000 DVDs at an average cost of $1.50 this is evidence of

The law of diminishing marginal returns

Suppose the price of capital and labor remain constant but that the average educational level of workers has increased and therefore,productivity of labor increases.This would lead a firm

If the total cost of producing 20 units of output is $1,000 and the average variable cost is $35,what is the firm's average fixed cost at that level of output?

State the law of diminishing returns.How do diminishing returns differ from diseconomies of scale? Be sure to define diseconomies of scale in your answer.

When a firm experiences a positive technological change

Figure 11-2 -Refer to Figure 11-2.Short run output is maximized at

If the marginal product of labor is 45 units of output and the marginal product of capital is 56 units of output while the wage rate is $20 per worker and the cost of capital is $28 per machine,are these two inputs being used in the least cost combination and what should be done if they are not?

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

Figure 11-11 Figure 11-11 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: ATC_a, ATC_b and ATC_c. -Refer to Figure 11-11.For output rates greater than 20,000 picture frames per month