Question 1

The law of diminishing marginal returns states

Accepted Answer

A) that at some point,adding more of a fixed input to a given amount of variable inputs will cause the marginal product of the variable input to decline. 
B) that at some point,adding more of a variable input to a given amount of a fixed input will cause the marginal product of the variable input to decline. 
C) that in the presence of a fixed factor,at some point average product of labor starts to fall as more and more variable inputs are added. 
D) average total costs of production initially fall and after some point starts to rise at a decreasing rate as output increases. 
A) that at some point,adding more of a fixed input to a given amount of variable inputs will cause the marginal product of the variable input to decline. 
B) that at some point,adding more of a variable input to a given amount of a fixed input will cause the marginal product of the variable input to decline. 
C) that in the presence of a fixed factor,at some point average product of labor starts to fall as more and more variable inputs are added. 
D) average total costs of production initially fall and after some point starts to rise at a decreasing rate as output increases.

Question 2

The average total cost of production

Accepted Answer

A) is the extra cost required to produce one more unit. 
B) equals the explicit cost of production. 
C) equals total cost of production divided by the level of output. 
D) equals total cost of production multiplied times the level of output. 
A) is the extra cost required to produce one more unit. 
B) equals the explicit cost of production. 
C) equals total cost of production divided by the level of output. 
D) equals total cost of production multiplied times the level of output.

Question 3

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 4

If a firm decreases its plant size and finds that its long-run average costs have decreased,then

Accepted Answer

A) its labor is more productive in a smaller plant. 
B) its diseconomies of scale are less. 
C) the firm should reduce its plant size even more. 
D) the firm is now profitable. 
A) its labor is more productive in a smaller plant. 
B) its diseconomies of scale are less. 
C) the firm should reduce its plant size even more. 
D) the firm is now profitable.

Question 5

Is it possible for average total cost to be decreasing over a range of output where marginal cost is increasing? Briefly explain.

Accepted Answer

Yes.As long as the marginal co

Question 6

Which of the following equations is correct?

Accepted Answer

A) AVC - ATC = AFC 
B) AVC + ATC = AFC 
C) AFC + AVC = ATC 
D) ATC + AVC = AFC 
A) AVC - ATC = AFC 
B) AVC + ATC = AFC 
C) AFC + AVC = ATC 
D) ATC + AVC = AFC

Question 7

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.

The law of diminishing marginal returns states

The average total cost of production

Average fixed costs of production

If a firm decreases its plant size and finds that its long-run average costs have decreased,then

Is it possible for average total cost to be decreasing over a range of output where marginal cost is increasing? Briefly explain.

Which of the following equations is correct?

The production function shows

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage,international Trade,and Exchange Rates

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Exam 8: Technology,production,and Costs

The law of diminishing marginal returns states

The average total cost of production

Average fixed costs of production

If a firm decreases its plant size and finds that its long-run average costs have decreased,then

Is it possible for average total cost to be decreasing over a range of output where marginal cost is increasing? Briefly explain.

Which of the following equations is correct?

The production function shows

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage,international Trade,and Exchange Rates

Filters