Question 1

-In the above table, marginal product becomes negative after employing the

Accepted Answer

A)  second worker. 
B)  third worker. 
C)  fourth worker. 
D)  fifth worker. 
A)  second worker. 
B)  third worker. 
C)  fourth worker. 
D)  fifth worker. C

Question 2

-In the above table, the average product for 3 units of labor is

Accepted Answer

A)  30.0. 
B)  26.7. 
C)  26.3. 
D)  25.0. 
A)  30.0. 
B)  26.7. 
C)  26.3. 
D)  25.0. B

Question 3

-Refer to the above table. When the quantity of labor equals 2, what does the average product equal?

Accepted Answer

A)  46 
B)  23 
C)  26 
D)  92 
A)  46 
B)  23 
C)  26 
D)  92 B

Question 4

The concept of the production function implies that a firm using resources inefficiently will

Accepted Answer

A)  obtain less output than the theoretical production function shows. 
B)  obtain more output than the theoretical production function shows. 
C)  obtain exactly the amount that the theoretical production function shows. 
D)  not be subject to diminishing marginal product. 
A)  obtain less output than the theoretical production function shows. 
B)  obtain more output than the theoretical production function shows. 
C)  obtain exactly the amount that the theoretical production function shows. 
D)  not be subject to diminishing marginal product.

Question 5

-In the above table, what is the average variable cost to produce 2 units of output?

Accepted Answer

A)  $25 
B)  $60 
C)  $55 
D)  $20 
A)  $25 
B)  $60 
C)  $55 
D)  $20

Question 6

When total product is increasing at a decreasing rate, marginal product is

Accepted Answer

A)  positive and increasing. 
B)  positive and decreasing. 
C)  constant. 
D)  negative. 
A)  positive and increasing. 
B)  positive and decreasing. 
C)  constant. 
D)  negative.

Question 7

-Use the above figure. The AVC at output 5 is

Accepted Answer

A)  $35.00. 
B)  $2.00. 
C)  $3.00. 
D)  $5.00. 
A)  $35.00. 
B)  $2.00. 
C)  $3.00. 
D)  $5.00.

Question 8

-In the above table, what is the marginal cost to produce the 5th unit of output?

Accepted Answer

A)  $80 
B)  $60 
C)  $55 
D)  $20 
A)  $80 
B)  $60 
C)  $55 
D)  $20

Question 9

-In the above figure, point B is called

Accepted Answer

A)  the maximum efficient scale. 
B)  the minimum efficient scale. 
C)  the planning horizon. 
D)  the point of diminishing marginal product. 
A)  the maximum efficient scale. 
B)  the minimum efficient scale. 
C)  the planning horizon. 
D)  the point of diminishing marginal product.

Question 10

Which of the following is NOT a reason a firm might experience economies of scale?

Accepted Answer

A)  specialization 
B)  dimensional factors 
C)  increasing long-run average costs 
D)  more productive equipment 
A)  specialization 
B)  dimensional factors 
C)  increasing long-run average costs 
D)  more productive equipment

Question 11

As long as output increases

Accepted Answer

A)  average total costs decrease. 
B)  average variable costs decrease. 
C)  average fixed costs decrease. 
D)  marginal costs decrease. 
A)  average total costs decrease. 
B)  average variable costs decrease. 
C)  average fixed costs decrease. 
D)  marginal costs decrease.

Question 12

The ratio of total costs to the quantity produced is referred to as

Accepted Answer

A)  average fixed costs. 
B)  average variable costs. 
C)  marginal costs. 
D)  average total costs. 
A)  average fixed costs. 
B)  average variable costs. 
C)  marginal costs. 
D)  average total costs.

Question 13

-Refer to the above table. What does total product equal when 4 units of labor are used?

Accepted Answer

A)  1328 
B)  332 
C)  320 
D)  960 
A)  1328 
B)  332 
C)  320 
D)  960

Question 14

-Use the above figure. At an output equal to "Q" the average fixed cost for the firm will be the line segment

Accepted Answer

A)  DE. 
B)  AB. 
C)  BE. 
D)  CD. 
A)  DE. 
B)  AB. 
C)  BE. 
D)  CD.

Question 15

When El Torito Restaurant is deciding how many waiters to hire for a holiday weekend, it is making a ________ decision.

Accepted Answer

A)  plant-size 
B)  long-run 
C)  short-run 
D)  fixed-input 
A)  plant-size 
B)  long-run 
C)  short-run 
D)  fixed-input

Question 16

Which of the following is NOT one of the reasons a firm might be expected to experience economies of scale?

Accepted Answer

A)  specialization 
B)  the dimensional factor 
C)  improved productive equipment 
D)  depreciation 
A)  specialization 
B)  the dimensional factor 
C)  improved productive equipment 
D)  depreciation

Question 17

-Refer to the above figure. The firm that produces an output between Q1 to Q2 is experiencing

Accepted Answer

A)  constant returns to scale. 
B)  diseconomies of scale. 
C)  diminishing marginal product. 
D)  economies of scale. 
A)  constant returns to scale. 
B)  diseconomies of scale. 
C)  diminishing marginal product. 
D)  economies of scale.

Question 18

As a firm's production increases in the short run, the average total cost curve eventually slopes upward because

Accepted Answer

A)  marginal physical product eventually declines as output increases. 
B)  marginal cost eventually declines as output increases. 
C)  average fixed cost declines with increases in output. 
D)  average physical product rises with increases in output. 
A)  marginal physical product eventually declines as output increases. 
B)  marginal cost eventually declines as output increases. 
C)  average fixed cost declines with increases in output. 
D)  average physical product rises with increases in output.

Question 19

-In the above table, what is the average variable cost to produce 3 units of output?

Accepted Answer

A)  $30 
B)  $60 
C)  $10 
D)  $20 
A)  $30 
B)  $60 
C)  $10 
D)  $20

Question 20

McDonald's is a fast-food restaurant chain. Which of the following would be a long-run decision for McDonald's?

Accepted Answer

A)  open a new restaurant in a city 
B)  hire one more worker in a restaurant location 
C)  supply more hamburgers in one restaurant 
D)  replace the manager of a restaurant 
A)  open a new restaurant in a city 
B)  hire one more worker in a restaurant location 
C)  supply more hamburgers in one restaurant 
D)  replace the manager of a restaurant

Exam 22: The Firm: Cost and Output Determination

-In the above table, marginal product becomes negative after employing the

-In the above table, the average product for 3 units of labor is

-Refer to the above table. When the quantity of labor equals 2, what does the average product equal?

The concept of the production function implies that a firm using resources inefficiently will

-In the above table, what is the average variable cost to produce 2 units of output?

When total product is increasing at a decreasing rate, marginal product is

-Use the above figure. The AVC at output 5 is

-In the above table, what is the marginal cost to produce the 5th unit of output?

-In the above figure, point B is called

Which of the following is NOT a reason a firm might experience economies of scale?

As long as output increases

The ratio of total costs to the quantity produced is referred to as

-Refer to the above table. What does total product equal when 4 units of labor are used?

-Use the above figure. At an output equal to "Q" the average fixed cost for the firm will be the line segment

When El Torito Restaurant is deciding how many waiters to hire for a holiday weekend, it is making a ________ decision.

Which of the following is NOT one of the reasons a firm might be expected to experience economies of scale?

-Refer to the above figure. The firm that produces an output between Q1 to Q2 is experiencing

As a firm's production increases in the short run, the average total cost curve eventually slopes upward because

-In the above table, what is the average variable cost to produce 3 units of output?

McDonald's is a fast-food restaurant chain. Which of the following would be a long-run decision for McDonald's?

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, Banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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