Question 1

The range in which there is diminishing marginal productivity starts at the point where:

Accepted Answer

A) marginal product reaches its maximum. 
B) average product reaches its maximum. 
C) total product reaches its maximum. 
D) marginal product begins to decrease at an increasing rate. 
A) marginal product reaches its maximum. 
B) average product reaches its maximum. 
C) total product reaches its maximum. 
D) marginal product begins to decrease at an increasing rate.

Question 2

Which of the following is consistent with diminishing marginal product?

Accepted Answer

A) The more you study each day, the more you learn from each added hour of study. 
B) The more you study each day, the less you know. 
C) Beyond some point, each added hour studying each day adds less to what you know than the previous hour's study. 
D) None of the above. 
A) The more you study each day, the more you learn from each added hour of study. 
B) The more you study each day, the less you know. 
C) Beyond some point, each added hour studying each day adds less to what you know than the previous hour's study. 
D) None of the above.

Question 3

The vertical distance between the average total cost curve and the average variable cost curve equals:

Accepted Answer

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

Question 4

The marginal cost of a good is:

Accepted Answer

A) the difference between average total cost and average variable cost. 
B) the addition to total cost from producing one more unit of output. 
C) decreasing whenever average total cost is decreasing. 
D) always equal to average variable cost when the firm is maximizing profit. 
A) the difference between average total cost and average variable cost. 
B) the addition to total cost from producing one more unit of output. 
C) decreasing whenever average total cost is decreasing. 
D) always equal to average variable cost when the firm is maximizing profit.

Question 5

Figure 7-H  
-In the long run, firms can vary all inputs in the production process.

Accepted Answer

A) True 
 B)False

Question 6

The short run is not the same length of time for all firms and industries because:

Accepted Answer

A) entrepreneurs have different tastes and preferences. 
B) the average product of labor varies across industries. 
C) the life span of capital and the extent of capital specialization will vary across firms and industries. 
D) The marginal product of capital begins to diminish at different levels of capital utilization across firms. 
A) entrepreneurs have different tastes and preferences. 
B) the average product of labor varies across industries. 
C) the life span of capital and the extent of capital specialization will vary across firms and industries. 
D) The marginal product of capital begins to diminish at different levels of capital utilization across firms.

Question 7

Table 6-C
A factory producing CD players finds that its output varies with the number of workers employed each week in the following way:
 $$\begin{array} { c c } 
\text { Number af Warkers } & \text { Output (CD Players) } \
\text { Emplayed Per Week } \1& 16 \
2 & 38 \
3 & 68 \
4 & 94 \
5 & 112 \
6 & 122
\end{array}$$
-Refer to Table 6-C.Marginal product begins to diminish with the ____ worker employed.

Accepted Answer

A) first 
B) second 
C) third 
D) fourth 
E) fifth 
A) first 
B) second 
C) third 
D) fourth 
E) fifth

Question 8

Figure 6-F  
-Refer to Figure 6-F.The region 'z,' where the long-run ATC rises at the higher levels of output, refers to:

Accepted Answer

A) diseconomies of scale. 
B) constant returns to scale. 
C) minimum efficient scale. 
D) economies of scale. 
A) diseconomies of scale. 
B) constant returns to scale. 
C) minimum efficient scale. 
D) economies of scale.

Question 9

There are two types of costs associated with production: ____ costs that require monetary payments, and ____ costs that do not.

Accepted Answer

A) implicit; accounting 
B) accounting; explicit 
C) implicit; explicit 
D) explicit; implicit 
E) accounting; economic 
A) implicit; accounting 
B) accounting; explicit 
C) implicit; explicit 
D) explicit; implicit 
E) accounting; economic

Question 10

The marginal cost curve:

Accepted Answer

A) is a vertical line. 
B) generally rises at first and then declines as output expands. 
C) generally falls at first and then rises as output expands. 
D) intersects the average variable cost curve from below at its maximum point. 
E) decreases when marginal product begins to diminish. 
A) is a vertical line. 
B) generally rises at first and then declines as output expands. 
C) generally falls at first and then rises as output expands. 
D) intersects the average variable cost curve from below at its maximum point. 
E) decreases when marginal product begins to diminish.

Question 11

Figure 6-C  
-Refer to Figure 6-C.The marginal cost curve is the curve labeled:

Accepted Answer

A) A 
B) B 
C) C 
D) D 
A) A 
B) B 
C) C 
D) D

Question 12

Figure 6-B  
-Refer to Figure 6-B.The distance Y between the two curves in the diagram is:

Accepted Answer

A) the total cost of producing five units of output. 
B) the total variable cost of producing five units of output. 
C) the total fixed cost of producing five units of output. 
D) the average variable cost of producing five units of output. 
E) the average fixed cost of producing five units of output. 
A) the total cost of producing five units of output. 
B) the total variable cost of producing five units of output. 
C) the total fixed cost of producing five units of output. 
D) the average variable cost of producing five units of output. 
E) the average fixed cost of producing five units of output.

Question 13

Figure 6-A  
-Refer to Figure 6-A.What is the marginal product of the second worker hired each week?

Accepted Answer

A) 10 bicycles 
B) 15 bicycles 
C) 20 bicycles 
D) 30 bicycles 
E) none of the above 
A) 10 bicycles 
B) 15 bicycles 
C) 20 bicycles 
D) 30 bicycles 
E) none of the above

Question 14

Figure 6-A  
-Refer to Figure 6-A.Marginal product begins to diminish:

Accepted Answer

A) with the first worker hired. 
B) with the second worker hired. 
C) with the third worker hired. 
D) with the fourth worker hired. 
E) with the fifth worker hired. 
A) with the first worker hired. 
B) with the second worker hired. 
C) with the third worker hired. 
D) with the fourth worker hired. 
E) with the fifth worker hired.

Question 15

The region of economies of scale is that in which:

Accepted Answer

A) short-run marginal cost is falling as output expands. 
B) short-run average total cost is falling as output expands. 
C) long-run marginal cost is falling as output expands. 
D) long-run average total cost is falling as output expands. 
A) short-run marginal cost is falling as output expands. 
B) short-run average total cost is falling as output expands. 
C) long-run marginal cost is falling as output expands. 
D) long-run average total cost is falling as output expands.

Question 16

Figure 6-D  
-Refer to Figure 6-D.At output level 0Q, total cost equals:

Accepted Answer

A) area ADQ0. 
B) area ADEB. 
C) area ADFC. 
D) area BEQ0. 
A) area ADQ0. 
B) area ADEB. 
C) area ADFC. 
D) area BEQ0.

Question 17

If total cost increases as output increases, then:

Accepted Answer

A) marginal cost must be equal to zero. 
B) marginal cost must be positive. 
C) marginal cost must be negative. 
D) marginal cost must be increasing. 
E) marginal cost must be decreasing. 
A) marginal cost must be equal to zero. 
B) marginal cost must be positive. 
C) marginal cost must be negative. 
D) marginal cost must be increasing. 
E) marginal cost must be decreasing.

Question 18

Which of the following is true in the short run?

Accepted Answer

A) MC = ATC at the lowest point of ATC. 
B) MC = AVC at the lowest point of AVC. 
C) When AVC is at its minimum point, ATC is falling. 
D) When ATC is at its minimum point, AVC is rising. 
E) All of the above are true. 
A) MC = ATC at the lowest point of ATC. 
B) MC = AVC at the lowest point of AVC. 
C) When AVC is at its minimum point, ATC is falling. 
D) When ATC is at its minimum point, AVC is rising. 
E) All of the above are true.

Question 19

What denotes the output level where economies of scale are exhausted and constant returns to scale begin?

Accepted Answer

A) minimum efficient scale 
B) break-even point 
C) efficient equilibrium 
D) zero economic profit 
A) minimum efficient scale 
B) break-even point 
C) efficient equilibrium 
D) zero economic profit

Question 20

Which of the following is true?

Accepted Answer

A) If average total cost is less than marginal cost, then average total cost is decreasing. 
B) If average total cost exceeds marginal cost, then average total cost is decreasing. 
C) If average total cost exceeds marginal cost, then average total cost is increasing. 
D) If average total cost is less than marginal cost, then average total cost is constant. 
A) If average total cost is less than marginal cost, then average total cost is decreasing. 
B) If average total cost exceeds marginal cost, then average total cost is decreasing. 
C) If average total cost exceeds marginal cost, then average total cost is increasing. 
D) If average total cost is less than marginal cost, then average total cost is constant.

The range in which there is diminishing marginal productivity starts at the point where:

Which of the following is consistent with diminishing marginal product?

The vertical distance between the average total cost curve and the average variable cost curve equals:

The marginal cost of a good is:

Figure 7-H -In the long run, firms can vary all inputs in the production process.

The short run is not the same length of time for all firms and industries because:

Figure 6-F -Refer to Figure 6-F.The region 'z,' where the long-run ATC rises at the higher levels of output, refers to:

There are two types of costs associated with production: costs that require monetary payments, and costs that do not.

The marginal cost curve:

Figure 6-C -Refer to Figure 6-C.The marginal cost curve is the curve labeled:

Figure 6-B -Refer to Figure 6-B.The distance Y between the two curves in the diagram is:

Figure 6-A -Refer to Figure 6-A.What is the marginal product of the second worker hired each week?

Figure 6-A -Refer to Figure 6-A.Marginal product begins to diminish:

The region of economies of scale is that in which:

Figure 6-D -Refer to Figure 6-D.At output level 0Q, total cost equals:

If total cost increases as output increases, then:

Which of the following is true in the short run?

What denotes the output level where economies of scale are exhausted and constant returns to scale begin?

Which of the following is true?

The Role and Method of Economics

The Economic Way of Thinking

Supply and Demand

Using Supply and Demand

Market Failure and Public Choice

Firms in Competitive Markets

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets, Income Distribution, and Poverty

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Economic Growth

Aggregate Demand and Aggregate Supply

Fiscal Policy

Monetary Institutions

The Federal Reserve System and Monetary Policy

Issues in Macroeconomic Theory and Policy

International Economics

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Exam 6: Production and Costs

The range in which there is diminishing marginal productivity starts at the point where:

Which of the following is consistent with diminishing marginal product?

The vertical distance between the average total cost curve and the average variable cost curve equals:

The marginal cost of a good is:

Figure 7-H -In the long run, firms can vary all inputs in the production process.

The short run is not the same length of time for all firms and industries because:

Figure 6-F -Refer to Figure 6-F.The region 'z,' where the long-run ATC rises at the higher levels of output, refers to:

There are two types of costs associated with production: ____ costs that require monetary payments, and ____ costs that do not.

The marginal cost curve:

Figure 6-C -Refer to Figure 6-C.The marginal cost curve is the curve labeled:

Figure 6-B -Refer to Figure 6-B.The distance Y between the two curves in the diagram is:

Figure 6-A -Refer to Figure 6-A.What is the marginal product of the second worker hired each week?

Figure 6-A -Refer to Figure 6-A.Marginal product begins to diminish:

The region of economies of scale is that in which:

Figure 6-D -Refer to Figure 6-D.At output level 0Q, total cost equals:

If total cost increases as output increases, then:

Which of the following is true in the short run?

What denotes the output level where economies of scale are exhausted and constant returns to scale begin?

Which of the following is true?

The Role and Method of Economics

The Economic Way of Thinking

Supply and Demand

Using Supply and Demand

Market Failure and Public Choice

Firms in Competitive Markets

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets, Income Distribution, and Poverty

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Economic Growth

Aggregate Demand and Aggregate Supply

Fiscal Policy

Monetary Institutions

The Federal Reserve System and Monetary Policy

Issues in Macroeconomic Theory and Policy

International Economics

Filters

There are two types of costs associated with production: costs that require monetary payments, and costs that do not.