Question 1

When total product is increasing at an increasing rate, marginal product is

Accepted Answer

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

Question 2

Average fixed costs will

Accepted Answer

A)  rise as output rises.
B)  fall then rise as output rises.
C)  rise then fall as output rises.
D)  fall as output rises.E) A) and D)
F) B) and D)

Question 3

-As long as marginal product of labor exceeds the average product of labor, then average product of labor

Accepted Answer

A)  must fall.
B)  must rise.
C)  will stay unchanged.
D)  will be at its maximum value.E) A) and B)
F) B) and C)

Question 4

-Refer to the above figure. Diseconomies of scale exist

Accepted Answer

A)  over the entire range of output.
B)  from output  to  .
C)  up to output  .
D)  after output  .E) All of the above
F) C) and D)

Question 5

-Using the above table, the TC, the AFC, and the TVC when output is 2 units are

Accepted Answer

A)  $20, $2.50, and $15, respectively.
B)  $35, $2.50, and $30, respectively.
C)  $30, $2.50, and $40, respectively.
D)  $35, $2.50, and $20, respectively.E) B) and C)
F) A) and B)

Question 6

Which of the following would be a fixed input to an automobile firm?

Accepted Answer

A)  Steel
B)  A factory in Detroit
C)  Car batteries
D)  EngineersE) B) and C)
F) C) and D)

Question 7

-In the above table, when the firm employs 4 workers, the marginal product will be

Accepted Answer

A)  140 snowboards.
B)  30 snowboards.
C)  35 snowboards.
D)  208 snowboards.E) A) and B)
F) A) and C)

Question 8

Every point on the long-run average cost curve is

Accepted Answer

A)  also a minimum point on a short-run average cost curve.
B)  on a short-run average total cost curve.
C)  on a short-run average variable cost curve.
D)  on a short-run marginal cost curve.E) B) and C)
F) A) and C)

Question 9

Which of the following is correct?

Accepted Answer

A)  AFC = TC/Q - TVC/Q
B)  AVC = TVC - AFC
C)  TC = AVC∗Q
D)  MC = TC - TVCE) A) and B)
F) A) and C)

Question 10

Changes in production functions are associated with changes in

Accepted Answer

A)  the level of output.
B)  demand.
C)  the levels of costs.
D)  technology.E) B) and C)
F) None of the above

Question 11

-In the above figure, the long-run cost curve between points A and B illustrates

Accepted Answer

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

Question 12

For a firm, we define the short run as a period of time during which

Accepted Answer

A)  at least one input cannot be changed.
B)  all inputs can be changed.
C)  only the plant size can be changed.
D)  all inputs cannot be changed.E) A) and D)
F) B) and C)

Question 13

Use the information from the below table to answer following question(s) . 
-In the above table, the marginal product of the fourth worker is

Accepted Answer

A)  30.
B)  25.
C)  20.
D)  15.E) All of the above
F) A) and D)

Question 14

The time period during at least one input cannot be changed is the

Accepted Answer

A)  production time.
B)  calendar year.
C)  long run.
D)  short run.E) A) and B)
F) All of the above

Question 15

-Marginal physical product is

Accepted Answer

A)  the change in total output from using an additional unit of one variable input, holding other inputs constant.
B)  the change in total output from using an additional unit of all variable inputs.
C)  the total output divided by the number of units of the variable input.
D)  the change in total output divided by the number of units of the variable input, holding constant all other inputs.E) A) and D)
F) A) and C)

Question 16

-In the above table, which two workers have the same marginal physical product?

Accepted Answer

A)  1 and 2
B)  2 and 4
C)  1 and 3
D)  1 and 4E) C) and D)
F) B) and D)

Question 17

Suppose that one worker can produce 15 cookies, two workers can produce 35 cookies together, and three workers can produce 65 cookies together. What is the marginal product of the 3rd worker?

Accepted Answer

A)  21.67 cookies
B)  65 cookies
C)  30 cookies
D)  35 cookiesE) A) and C)
F) B) and C)

Question 18

-Refer to the above table. What are total fixed costs at an output of 3 units?

Accepted Answer

A)  $90
B)  $120
C)  $150
D)  $270E) All of the above
F) B) and C)

Question 19

The law of diminishing marginal product shows the relationship

Accepted Answer

A)  between accounting and economic profits.
B)  between short-run and long-run outputs of a firm.
C)  between inputs and outputs for a firm in the short run.
D)  between inputs and outputs for a firm in the long run.E) A) and D)
F) All of the above

Question 20

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.E) A) and D)
F) A) and C)

Exam 22: The Firm: Cost and Output Determination

-Using the above table, the TC, the AFC, and the TVC when output is 2 units are

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Average fixed costs will

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-In the above table, when the firm employs 4 workers, the marginal product will be

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The law of diminishing marginal product shows the relationship

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-Refer to the above table. What are total fixed costs at an output of 3 units?

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Use the information from the below table to answer following question(s) . -In the above table, the marginal product of the fourth worker is

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When total product is increasing at an increasing rate, marginal product is

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As long as output increases,

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-Marginal physical product is

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-As long as marginal product of labor exceeds the average product of labor, then average product of labor

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Changes in production functions are associated with changes in

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-In the above figure, the long-run cost curve between points A and B illustrates

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The time period during at least one input cannot be changed is the

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For a firm, we define the short run as a period of time during which

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Every point on the long-run average cost curve is

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Which of the following would be a fixed input to an automobile firm?

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-In the above table, which two workers have the same marginal physical product?

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-Refer to the above figure. Diseconomies of scale exist

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Suppose that one worker can produce 15 cookies, two workers can produce 35 cookies together, and three workers can produce 65 cookies together. What is the marginal product of the 3rd worker?

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Which of the following is correct?

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