Question 1

-What could have caused the marginal cost curve to increase from MC1 to MC2?

Accepted Answer

A)  Total costs have decreased
B)  Average product has increased.
C)  The price of the product has decreased.
D)  The price of a variable input has increased.
E)  The price of a fixed input has increased. D

Question 2

What is the sum of the marginal costs of all of the units produced?

Accepted Answer

A)  Total cost.
B)  Average cost.
C)  Total variable cost.
D)  Total fixed costs. C

Question 3

What is true at the point of maximum productivity?

Accepted Answer

A)  The marginal product of labour is at a maximum.
B)  The marginal cost of production is at a minimum.
C)  The average product of labour is at a maximum.
D)  The average total cost of production is at a minimum. C

Question 4

Below are some financial data for the Do Drop In convenience store.
  The owners have put $40,000 into the business and they worked a total of 80 hours during the week.Savings accounts are currently paying 5.2% interest and the going wage rate is $8 per hour.
-Refer to the information above to answer this question.According to an accountant,what is the week's profit for the Do Drop In?

Accepted Answer

A)  -$230.
B)  $230.
C)  $360.
D)  $450.
E)  $960.

Question 5

Why would a firm not produce above economic capacity indefinitely?

Accepted Answer

The answer of Why would a firm not produce above...

Question 6

What is the term for dividing up the production process into specialized tasks?

Accepted Answer

A)  Units of labour.
B)  Separation of labour.
C)  Division of labour.
D)  Distinction of labour.

Question 7

Marginal cost equals average variable cost when the latter is at a minimum.

Accepted Answer

A) True 
 B)False

Question 8

The table below gives data for the Grow'em Right Tree Company.Fill in the blanks.

Accepted Answer

The answer of The table below gives data for the...

Question 9

The data in the table is for a firm in which labour is the only variable cost and each unit of labour costs the same regardless of how many units are bought.
 
-Refer to the information above to answer this question.As one reads down the AVC column,what is the pattern in the numbers?

Accepted Answer

A)  They continuously rise.
B)  They continuously fall.
C)  They fall until the fifth unit of labour used and then remain unchanged.
D)  They rise until the fifth unit of labour used and then remain unchanged.
E)  They fall until the fifth unit of labour used and then rise with the seventh unit of labour used.

Question 10

Which of the following statements is true about the marginal product of labour?

Accepted Answer

A)  It is total output divided by the quantity of labour inputs used.
B)  It is the increase in total output resulting from the use of one more unit of labour.
C)  It is the increase in total output divided by the quantity of labour inputs used.
D)  It is total output multiplied by the quantity of labour inputs used.

Question 11

Fill in the missing values in the table below.

Accepted Answer

The answer of Fill in the missing values in the...

Question 12

The data below is for the Duffy's Duck Company. a)What is the MC of the 6^th unit produced? b)Diminishing returns begin with the production of which unit of output? c)What is the AVC of the 3^rd unit produced? d)What is the ATC of the 8^th unit produced? e)What is the AFC of the 5^th unit produced?

Accepted Answer

The answer of The data below is for the Duffy's...

Question 13

-Refer to the graph above to answer this question.What is true at maximum total output?

Accepted Answer

A)  It is the most productive output.
B)  It is where diminishing returns begin.
C)  It is where marginal product is at a maximum.
D)  It is where marginal product is zero.

Question 14

The data in the table is for a firm in which labour is the only variable cost and each unit of labour costs the same regardless of how many units are bought.
 
-Refer to the information above to answer this question.What are the missing numbers for MP in the third column?

Accepted Answer

A)  12,20,10,5 and 0.
B)  12,25,5,0 and -5.
C)  28,50,28.6,42.6 and 58.6.
D)  12,50,28.6,43.6 and 58.6.
E)  28,25,10,5,and 0.

Question 15

The short run is any period of time in which at least two inputs are fixed.

Accepted Answer

A) True 
 B)False

Question 16

What are normal profits?

Accepted Answer

A)  The minimum profit that must be earned to keep the entrepreneur in that type of business.
B)  The explicit cost of doing business.
C)  Profits made by the typical firm in an industry.
D)  Total revenue over and above all costs.

Question 17

-What is the term for the total of all costs that vary with the level of output?

Accepted Answer

A)  Average variable cost.
B)  Marginal cost.
C)  Variable cost.
D)  Total variable cost.
E)  Total cost.

Question 18

-Refer to the graph above to answer this question.At what output do diminishing returns set in?

Accepted Answer

A)  80.
B)  160.
C)  180.
D)  200.
E)  120.

Question 19

Which of the statements below is true about the marginal product of labour?

Accepted Answer

A)  It is total output divided by the quantity of labour used.
B)  It is the increase in total output resulting from the use of one more unit of labour.
C)  It is the increase in total output divided by the quantity of labour used.
D)  It is always constant.

Question 20

Sunk costs are the historical costs of an asset that has no current resale value.

Accepted Answer

A) True 
 B)False

Exam 6: A Firms Production Decisions and Costs in the Short Run

-What could have caused the marginal cost curve to increase from MC₁ to MC₂?

What is the sum of the marginal costs of all of the units produced?

What is true at the point of maximum productivity?

Why would a firm not produce above economic capacity indefinitely?

What is the term for dividing up the production process into specialized tasks?

Marginal cost equals average variable cost when the latter is at a minimum.

The table below gives data for the Grow'em Right Tree Company.Fill in the blanks.

The data in the table is for a firm in which labour is the only variable cost and each unit of labour costs the same regardless of how many units are bought. -Refer to the information above to answer this question.As one reads down the AVC column,what is the pattern in the numbers?

Which of the following statements is true about the marginal product of labour?

Fill in the missing values in the table below.

The data below is for the Duffy's Duck Company. a)What is the MC of the 6^th unit produced? b)Diminishing returns begin with the production of which unit of output? c)What is the AVC of the 3^rd unit produced? d)What is the ATC of the 8^th unit produced? e)What is the AFC of the 5^th unit produced?

-Refer to the graph above to answer this question.What is true at maximum total output?

The data in the table is for a firm in which labour is the only variable cost and each unit of labour costs the same regardless of how many units are bought. -Refer to the information above to answer this question.What are the missing numbers for MP in the third column?

The short run is any period of time in which at least two inputs are fixed.

What are normal profits?

-What is the term for the total of all costs that vary with the level of output?

-Refer to the graph above to answer this question.At what output do diminishing returns set in?

Which of the statements below is true about the marginal product of labour?

Sunk costs are the historical costs of an asset that has no current resale value.

Exam 6: A Firms Production Decisions and Costs in the Short Run

-What could have caused the marginal cost curve to increase from MC1 to MC2?

What is the sum of the marginal costs of all of the units produced?

What is true at the point of maximum productivity?

Why would a firm not produce above economic capacity indefinitely?

What is the term for dividing up the production process into specialized tasks?

Marginal cost equals average variable cost when the latter is at a minimum.

The table below gives data for the Grow'em Right Tree Company.Fill in the blanks.

The data in the table is for a firm in which labour is the only variable cost and each unit of labour costs the same regardless of how many units are bought. -Refer to the information above to answer this question.As one reads down the AVC column,what is the pattern in the numbers?

Which of the following statements is true about the marginal product of labour?

Fill in the missing values in the table below.

The data below is for the Duffy's Duck Company. a)What is the MC of the 6th unit produced? b)Diminishing returns begin with the production of which unit of output? c)What is the AVC of the 3rd unit produced? d)What is the ATC of the 8th unit produced? e)What is the AFC of the 5th unit produced?

-Refer to the graph above to answer this question.What is true at maximum total output?

The data in the table is for a firm in which labour is the only variable cost and each unit of labour costs the same regardless of how many units are bought. -Refer to the information above to answer this question.What are the missing numbers for MP in the third column?

The short run is any period of time in which at least two inputs are fixed.

What are normal profits?

-What is the term for the total of all costs that vary with the level of output?

-Refer to the graph above to answer this question.At what output do diminishing returns set in?

Which of the statements below is true about the marginal product of labour?

Sunk costs are the historical costs of an asset that has no current resale value.

-What could have caused the marginal cost curve to increase from MC₁ to MC₂?

The data below is for the Duffy's Duck Company. a)What is the MC of the 6^th unit produced? b)Diminishing returns begin with the production of which unit of output? c)What is the AVC of the 3^rd unit produced? d)What is the ATC of the 8^th unit produced? e)What is the AFC of the 5^th unit produced?