Question 1

Explain why average total costs initially decrease and then increase as output increases.

Accepted Answer

Initially, as output increases, both ave...

Question 2

Total Product, Marginal Product, Average Product
 
-In the above table, the average product of three workers is

Accepted Answer

A)   1.
B)   2.
C)   3.
D)   4.

Question 3

A period of time in which the quantity of all factors of production used by a firm can be varied is called the

Accepted Answer

A)   market period.
B)   variable run.
C)   short run.
D)   long run.

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

When the marginal product equals the average product, the

Accepted Answer

A)   average product curve is downward sloping.
B)   average product curve is upward sloping.
C)   marginal product is at its maximum.
D)   average product is at its maximum.

Question 6

The law of diminishing returns states that as a firm increases

Accepted Answer

A)   all the inputs is uses, the marginal product of each of these inputs always decreases.
B)   a variable input, with a given quantity of fixed inputs, the firm's marginal cost eventually decreases.
C)   a variable input, with a given quantity of fixed inputs, the marginal product of the variable input eventually decreases.
D)   a variable input, given the quantity of fixed inputs, the firm's average total cost will eventually decrease.

Question 7

-The above (incomplete)  table provides information about the relationships between labor and various product measures. The total product that can be produced with 6 units of labor is

Accepted Answer

A)   20.
B)   19.
C)   More information is needed to answer the question.
D)   None of the above answers is correct.

Question 8

-Cindy's Sweaters' production function is shown in the above table. Cindy rents two knitting machines for $30 a day each and hires workers at a wage rate of $40 a day. What is the marginal cost of the 19th sweater?

Accepted Answer

A)   $40.00
B)   $20.00
C)   $10.00
D)   $8.00

Question 9

The marginal cost curve intersects the average fixed, average variable, and average total cost curves all at their minimum points.

Accepted Answer

A) True 
 B)False

Question 10

A firm experiences ________ when its ________ downward as output increases.

Accepted Answer

A)   diseconomies of scale; average total cost curve slopes
B)   economies of scale; long-run average cost curve slopes
C)   diminishing marginal returns; long-run average cost curve slopes
D)   diminishing marginal returns; average total cost curve shifts

Question 11

-The table shows some data that describes Tom's T-Shirts' total product when Tom's has 1 sewing machine. When 4 workers are employed

Accepted Answer

A)   average product of labor is a maximum.
B)   marginal product of labor is less than average product of labor.
C)   marginal product of labor exceeds average product of labor.
D)   marginal product of labor equals average product of labor.

Question 12

-In the above figure, the total cost curve is curve

Accepted Answer

A)   A.
B)   B.
C)   C.
D)   none of the curves in the figure.

Question 13

If the ATC curve has a positive slope, then the MC curve must be

Accepted Answer

A)   horizontal.
B)   vertical.
C)   above the ATC curve.
D)   below the ATC curve.

Question 14

When long-run average cost increases as output increases there are

Accepted Answer

A)   economies of scale.
B)   diseconomies of scale.
C)   constant returns to scale.
D)   none of the above.

Question 15

When there are diminishing marginal returns to labor, the marginal product of the last worker hired must be negative.

Accepted Answer

A) True 
 B)False

Question 16

The marginal product and average product curves

Accepted Answer

A)   never intersect.
B)   intersect at the maximum point of the marginal product curve.
C)   intersect at the maximum point of the average product curve.
D)   do not intersect at any predictable point.

Question 17

Tony's Pizza's production function is shown in the table above. Tony currently operates Plant 2. He hires workers at a wage rate of $50 a day and his total fixed cost is $150.
a) Calculate Tony's Pizza's total variable cost and total cost for each output level.
b) Calculate the marginal costs.
c) Calculate the average fixed costs, average variable costs, and average total costs.
d) Suppose that total fixed cost increases to $200. Explain what changes occur in the costs.

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> a) The total variable cost and total co...

Question 18

A firm has fixed costs

Accepted Answer

A)   in the short run and in the long run.
B)   in the short run but not in the long run.
C)   in the long run but not in the short run.
D)   neither in the long run nor in the short run.

Question 19

Minneapolis business Rogue Chocolatier sells specialty chocolate bars with a high cocoa content. Rogue can produce 15 chocolate bars per day with one employee, 35 with 2, 50 with 3 and 55 with 4 employees. Which statement is TRUE?

Accepted Answer

A)   Rogue's marginal product curve initially increases and then decreases.
B)   Rogue's marginal product curve decreases continually.
C)   Rogue's total product curve increases at an increasing rate.
D)   Rogue's marginal product curve decreases initially and then increases.

Question 20

-Are the curves in the figure above drawn CORRECTLY? If not, what's wrong?

Accepted Answer

The curves are not drawn correctly. Firs...

Exam 11: Output and Costs

-In the above figure, the total cost curve is curve

Correct Answer
verified

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

Correct Answer
verified

-The above (incomplete) table provides information about the relationships between labor and various product measures. The total product that can be produced with 6 units of labor is

Correct Answer
verified

Total Product, Marginal Product, Average Product -In the above table, the average product of three workers is

Correct Answer
verified

A firm has fixed costs

Correct Answer
verified

Explain why average total costs initially decrease and then increase as output increases.

Correct Answer
verified
Initially, as output increases, both ave...
View Answer

-Cindy's Sweaters' production function is shown in the above table. Cindy rents two knitting machines for $30 a day each and hires workers at a wage rate of $40 a day. What is the marginal cost of the 19th sweater?

Correct Answer
verified

-Are the curves in the figure above drawn CORRECTLY? If not, what's wrong?

Correct Answer
verified
The curves are not drawn correctly. Firs...
View Answer

The marginal product and average product curves

Correct Answer
verified

A period of time in which the quantity of all factors of production used by a firm can be varied is called the

Correct Answer
verified

The marginal cost curve intersects the average fixed, average variable, and average total cost curves all at their minimum points.

Correct Answer
verified

Minneapolis business Rogue Chocolatier sells specialty chocolate bars with a high cocoa content. Rogue can produce 15 chocolate bars per day with one employee, 35 with 2, 50 with 3 and 55 with 4 employees. Which statement is TRUE?

Correct Answer
verified

If the ATC curve has a positive slope, then the MC curve must be

Correct Answer
verified

When the marginal product equals the average product, the

Correct Answer
verified

-The table shows some data that describes Tom's T-Shirts' total product when Tom's has 1 sewing machine. When 4 workers are employed

Correct Answer
verified

Correct Answer
verified
a) The total variable cost and total co...
View Answer

When long-run average cost increases as output increases there are

Correct Answer
verified

When there are diminishing marginal returns to labor, the marginal product of the last worker hired must be negative.

Correct Answer
verified

A firm experiences when its downward as output increases.

Correct Answer
verified

The law of diminishing returns states that as a firm increases

Correct Answer
verified

Exam 11: Output and Costs

-In the above figure, the total cost curve is curve

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

-The above (incomplete) table provides information about the relationships between labor and various product measures. The total product that can be produced with 6 units of labor is

Correct AnswerverifiedShow Answer

Total Product, Marginal Product, Average Product -In the above table, the average product of three workers is

Correct AnswerverifiedShow Answer

A firm has fixed costs

Correct AnswerverifiedShow Answer

Explain why average total costs initially decrease and then increase as output increases.

Correct AnswerverifiedInitially, as output increases, both ave...View AnswerShow Answer

-Cindy's Sweaters' production function is shown in the above table. Cindy rents two knitting machines for $30 a day each and hires workers at a wage rate of $40 a day. What is the marginal cost of the 19th sweater?

Correct AnswerverifiedShow Answer

-Are the curves in the figure above drawn CORRECTLY? If not, what's wrong?

Correct AnswerverifiedThe curves are not drawn correctly. Firs...View AnswerShow Answer

The marginal product and average product curves

Correct AnswerverifiedShow Answer

A period of time in which the quantity of all factors of production used by a firm can be varied is called the

Correct AnswerverifiedShow Answer

The marginal cost curve intersects the average fixed, average variable, and average total cost curves all at their minimum points.

Correct AnswerverifiedShow Answer

Minneapolis business Rogue Chocolatier sells specialty chocolate bars with a high cocoa content. Rogue can produce 15 chocolate bars per day with one employee, 35 with 2, 50 with 3 and 55 with 4 employees. Which statement is TRUE?

Correct AnswerverifiedShow Answer

If the ATC curve has a positive slope, then the MC curve must be

Correct AnswerverifiedShow Answer

When the marginal product equals the average product, the

Correct AnswerverifiedShow Answer

-The table shows some data that describes Tom's T-Shirts' total product when Tom's has 1 sewing machine. When 4 workers are employed

Correct AnswerverifiedShow Answer

Correct Answerverified a) The total variable cost and total co...View AnswerShow Answer

When long-run average cost increases as output increases there are

Correct AnswerverifiedShow Answer

When there are diminishing marginal returns to labor, the marginal product of the last worker hired must be negative.

Correct AnswerverifiedShow Answer

A firm experiences ________ when its ________ downward as output increases.

Correct AnswerverifiedShow Answer

The law of diminishing returns states that as a firm increases

Correct AnswerverifiedShow Answer

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Initially, as output increases, both ave...
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The curves are not drawn correctly. Firs...
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a) The total variable cost and total co...
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A firm experiences when its downward as output increases.

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Correct Answer
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