...and Costs 1) The short run is...
...in which A) the firm is not...
...more workers. B) the amount of output...
...most resources. D) the quantities of some...
...make all of the decisions. Answer: D...
...Answer: D 2) The long run is...
...in which A) the firm can hire...
...can hire all the workers it wants...
...more equipment. B) the firm is able...
...total profit. C) the firm may want...
...is achieved. E) the quantities of all...
...too expensive for the firm to purchase....
...be changed in the short run. D)...
...D) in which the marginal product of...
...marginal product of the last unit of...
...last unit of the input employed exceeds...
...input employed exceeds the marginal product of...
...marginal product of the previous unit. E)...
...Answer: C 4) The total product curve...
...a graph of the A) minimum cost...
...C 1 Use the figure below to...
...below to answer the following question(s). Figure...
...Which one of the following statements is...
...false? A) All the points above the...
...the points above the curve are unattainable....
...unattainable. B) All the points below the...
...the points below the curve are attainable....
...attainable. C) All the points below the...
...the points below the curve are inefficient....
...inefficient. D) All the points on the...
...the points on the curve involve equal...
...equal cost to the firm. E) All...
...firm. E) All the points on the...
...the points on the curve are attainable....
...Which one of the following statements is...
...is true? A) The points above the...
...The points above the curve are attainable...
...and inefficient. B) The points below the...
...The points below the curve are attainable...
...and inefficient. C) The points below the...
...The points below the curve are inefficient...
...and unattainable. D) The points on the...
...The points on the curve are efficient...
...unattainable. E) All the points on the...
...the points on the curve have equal...
...Marginal product is the change in total...
...one-unit increase in the variable input, holding...
...variable input, holding the quantity of fixed...
...one-unit increase in the quantity of fixed...
...input employed, holding the quantity of the...
...the quantity of the variable input constant....
...increase in both the quantity of variable...
...D) change in the cost of the...
...the cost of the variable input. E)...
...percent change in the amount of variable...
...A 2 Use the table below to...
...below to answer the following question(s). Table...
...total product curve. The marginal product that...
...be produced if the firm employed four...
...Answer: E Use the table below to...
...below to answer the following question(s). Table...
...total product curve. The average product that...
...product curve. The average product that would...
...be produced if the firm employed four...
...to 15 sweaters. The marginal product of...
...marginal product of the third worker is...
...a firm increases the total units of...
...as a result, the firm's total output...
...to 400 units. The marginal product of...
...marginal product of the sixth worker is...
...negative. B) is the slope of the...
...the slope of the total product curve....
...one. E) is average product minus total...
...B 13) If the total product of...
...is 214 and the total product of...
...is 221, then the marginal product of...
...marginal product of the fourth worker is...
...a situation where the ________ of the...
...the ________ of the last worker hired...
...falls short of the ________ of the...
...the ________ of the previous worker. A)...
...marginal cost B) average cost; average cost...
...B) average cost; average cost C) marginal...
...marginal product D) average product; average product...
...D) average product; average product E) marginal...
...E) marginal product; average product Answer: C...
...4 15) When the marginal product of...
...is greater than the average product of...
...greater than the average product of labour,...
...of labour, A) the average product of...
...labour, A) the average product of labour...
...is increasing. B) the marginal product of...
...is increasing. C) the total product curve...
...negatively sloped. D) the firm is experiencing...
...marginal returns. E) the firm is experiencing...
...Answer: A Use the figure below to...
...below to answer the following question(s). Figure...
...which illustrates Swanky's average product curve. The...
...average product curve. The point of maximum...
...point of maximum average product is point...
...energy (E) is the only input used...
...(Q), what is the formula for average...
...the formula for average product of energy?...
...energy (E) is the only input used...
..., what is the formula for marginal...
...C 19) Suppose the marginal product of...
...is less than the average product of...
...less than the average product of energy....
...implies that A) the marginal product is...
...product is equal the average product. B)...
...is equal the average product. B) the...
...average product. B) the marginal product is...
...is greater than the average product at...
...greater than the average product at each...
...each level of the input used. C)...
...input used. C) the marginal product curve...
...upward sloping. D) the average product curve...
...sloping. D) the average product curve is...
...sloping. E) both the marginal and average...
...the marginal and average product curves are...
...E 20) Suppose the marginal product of...
...of energy equals the average product of...
...energy equals the average product of energy....
...is negative. B) average product is maximized....
...is maximized. D) the marginal product curve...
...upward sloping. E) average product is minimized....
...Which one of the following statements is...
...product is increasing, average product is decreasing....
...decreasing. B) When average product is below...
...product is increasing, average product is increasing....
...minimized. E) When average product exceeds marginal...
...Answer: C 22) The average product of...
...C 22) The average product of energy...
...energy is A) the increase in total...
...product divided by the increase in energy...
...energy used. B) the total product divided...
...product divided by the quantity of energy...
...energy used. C) the slope of the...
...the slope of the total product curve....
...product curve. D) the slope of the...
...the slope of the marginal product curve....
...product curve. E) the difference between the...
...the difference between the total product and...
...23) Which of the following statements by...
...owner refers to the law of diminishing...
...marginal returns? A) "The higher the quality...
...A) "The higher the quality of the...
...the quality of the ingredients we use,...
...ingredients we use, the higher the cost...
...use, the higher the cost of producing...
..."If we double the size of our...
...=we can increase the number of meals...
..."We can increase the number of meals...
...less meals than the previous worker because...
...because traffic in the kitchen will get...
..."We can serve the same number of...
..."We can serve the same number of...
...by output. B) the increase in total...
...cost divided by the increase in output....
...in output. C) the increase in total...
...cost divided by the increase in labour...
...labour input, given the amount of capital....
...fixed cost. E) the increase in total...
...cost divided by the increase in variable...
...B 7 Use the table below to...
...below to answer the following question(s). Table...
...total cost schedule. The average fixed cost...
...cost schedule. The average fixed cost of...
...total cost schedule. The average total cost...
...cost schedule. The average total cost of...
...to 9 sweaters, the marginal cost of...
...of one of the 5 sweaters is...
...E 8 Use the figure below to...
...below to answer the following question(s). Figure...
...10.5, which illustrates the short-run average and...
...illustrates the short-run average and marginal cost...
...marginal cost curves. The average variable cost...
...cost curves. The average variable cost curve...
...is represented by the curve labelled A)...
...E) none of the above. Answer: B...
...Answer: B 30) Average variable cost is...
...a minimum at the same output at...
...at which A) average product is at...
...a maximum. B) average product is at...
...Answer: A 31) The range over which...
...range over which average variable cost is...
...is decreasing is the same as the...
...the same as the range over which...
...is increasing. B) average fixed cost is...
...is decreasing. D) average product is decreasing....
...is decreasing. E) average product is increasing....
...E 9 32) The vertical distance between...
...vertical distance between the TC and TVC...
...Answer: D 33) The marginal cost (MC)...
...(MC) curve intersects the A) ATC, AVC,...
...Marginal cost is the amount that A)...
...Answer: E 38) The AFC curve shifts...
...D) all of the above. E) none...
...E) none of the above. Answer: E...
...E) none of the above. Answer: E...
...E) none of the above. Answer: E...
...E 41) In the long run, A)...
...run, A) only the scale of plant...
...E) none of the above is true....
...are present when the percentage change in...
...output A) exceeds the percentage change in...
...is less than the percentage change in...
...fudge. This indicates the presence of A)...
...market constraints. E) the law of diminishing...
...are increased at the same rate, A)...
...remains constant. B) average total cost remains...
...remains constant. C) average total cost increases...
...cost increases at the same rate as...
...inputs. D) long-run average cost remains constant....
...constant. E) long-run average cost rises at...
...cost rises at the same rate as...
...cars. This indicates the presence of A)...
...of scale. D) the law of diminishing...
...A 12 Use the figure below to...
...below to answer the following question(s). Figure...
...10.7, which illustrates the short-run average total...
...illustrates the short-run average total cost curves...
...Which curve represents the average total cost...
...curve represents the average total cost for...
...total cost for the largest of the...
...the largest of the four plant sizes?...
...10.7, which illustrates the short-run average total...
...illustrates the short-run average total cost curves...
...Which plant has the lowest average total...
...has the lowest average total cost for...
...E) none of the above Answer: A...
...A 13 Use the figure below to...
...below to answer the following question(s). Figure...
...a firm's long-run average total cost of...
...B 14 Use the figure below to...
...below to answer the following question(s). Figure...
...10.9, which illustrates the long-run average total...
...illustrates the long-run average total cost of...
...C 50) Complete the following sentence. Long-run...
...cost is A) the same as long-run...
...variable cost. B) the same as long-run...