Question 1

When a firm produces a level of output on the production function:

Accepted Answer

A)   Marginal physical product is zero.
B)   Maximum efficiency is achieved.
C)   Opportunity cost for resources is at a maximum.
D)   Profits are maximizeD.E) A) and C)
F) None of the above

Question 2

Table 5.6
Complete the following table,and use the information in the table to answer the question(s) below. 
-In Table 5.6,the total cost of 3 units of output is:

Accepted Answer

A)   $5.
B)   $10.
C)   $15.
D)   $30.E) None of the above
F) C) and D)

Question 3

Table 5.2-Jeans Production 
-If the firm in Table 5.2 receives $7.00 for each pair of jeans,in the short run it should:

Accepted Answer

A)   Produce 30 pairs of jeans.
B)   Produce 40 pairs of jeans.
C)   Produce 20 pairs of jeans.
D)   Only produce jeans if the price is greater than average total cost.E) A) and C)
F) A) and B)

Question 4

Assume a restaurant hires an additional chef who is as qualified as the current chefs.As a result,the level of output increases but by a smaller amount than when the previous additional chef was hired.Which of the following best explains this occurrence?

Accepted Answer

A)   The chefs are working with a fixed amount of space and equipment and they get in each other's way.
B)   The additional wages cause profit to decrease.
C)   The amount of food available for preparation is limited so output decreases.
D)   The two chefs do not agree on food preparation and spend too much time arguing.E) A) and C)
F) A) and D)

Question 5

As more labor is hired in the short run,diminishing returns are observed because:

Accepted Answer

A)   The new workers are lazy.
B)   The new workers have less capital and land to work with.
C)   All the workers begin to socialize more and work less.
D)   The new workers are less skilled.E) A) and B)
F) A) and C)

Question 6

Fixed costs are the same as total costs at a production rate of zero units in the short run.

Accepted Answer

A) True 
 B)False

Question 7

Table 5.2-Jeans Production th pair of jeans in Table 5.2? A)  $7.25 B)  $11.00 C)  $110.00 D)  $2.75" class="answers-bank-image d-inline" rel="preload" >
-What is the marginal cost of the 40th pair of jeans in Table 5.2?

Accepted Answer

A)   $7.25
B)   $11.00
C)   $110.00
D)   $2.75E) None of the above
F) C) and D)

Question 8

Which of the following is equivalent to total cost?

Accepted Answer

A)   Fixed costs plus variable costs.
B)   Variable costs plus marginal costs.
C)   Economic costs plus accounting costs.
D)   Marginal costs plus implicit costs.E) B) and D)
F) C) and D)

Question 9

Figure 5.2: 
-In Figure 5.2,what is the total cost of 10 units?

Accepted Answer

A)   $240.00
B)   $288.00
C)   $500.00
D)   $740.00E) A) and D)
F) A) and B)

Question 10

Based on the law of diminishing returns,if the number of workers increases and capital investments do not keep pace then,ceteris paribus:

Accepted Answer

A)   Marginal physical product of labor will increase.
B)   Marginal physical product of labor will decrease.
C)   The production function will definitely shift upward.
D)   The average total cost curve will definitely decrease.E) B) and D)
F) All of the above

Question 11

In the short run,when output is zero,total costs are zero.

Accepted Answer

A) True 
 B)False  False

Question 12

Table 5.1-Labor and output data 
-With which unit of labor do diminishing marginal returns first appear in Table 5.1?

Accepted Answer

A)   First
B)   Second
C)   Third
D)   FourthE) All of the above
F) C) and D)

Question 13

Table 5.5-Production costs 
-In Table 5.5,the marginal cost of the first unit of output is:

Accepted Answer

A)   $19.
B)   $10.
C)   $9.
D)   $3.E) A) and C)
F) A) and B) C

Question 14

Marginal physical product is the change in total output associated with an additional unit of input.

Accepted Answer

A) True 
 B)False

Question 15

Costs of production that do not change with the rate of output are:

Accepted Answer

A)   Nonexistent.
B)   Variable costs.
C)   Fixed costs.
D)   Marginal costs.E) All of the above
F) A) and D)

Question 16

The planning period over which at least one resource input is fixed in quantity is the:

Accepted Answer

A)   Long run.
B)   Production run.
C)   Short run.
D)   Investment decision.E) B) and D)
F) B) and C)

Question 17

During the short run:

Accepted Answer

A)   All inputs can be changed.
B)   Some inputs are fixed.
C)   Factory size can be changed.
D)   The number of workers cannot be changeD.E) B) and D)
F) B) and C)

Question 18

Economic profit is equal to total revenue minus:

Accepted Answer

A)   Explicit costs.
B)   Implicit costs.
C)   Both implicit costs and explicit costs.
D)   Marginal costs.E) B) and C)
F) A) and D) C

Question 19

In the short run,if marginal cost is less than price for the last unit produced,the firm should expand output.

Accepted Answer

A) True 
 B)False

Question 20

Figure 5.2: 
-In Figure 5.2,what is the total variable cost when output is 12 units?

Accepted Answer

A)   $500.00
B)   $624.00
C)   $720.00
D)   $864.00E) A) and D)
F) C) and D)

Exam 5: Supply Decisions

When a firm produces a level of output on the production function:

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Table 5.6 Complete the following table,and use the information in the table to answer the question(s) below. -In Table 5.6,the total cost of 3 units of output is:

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Table 5.2-Jeans Production -If the firm in Table 5.2 receives $7.00 for each pair of jeans,in the short run it should:

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Assume a restaurant hires an additional chef who is as qualified as the current chefs.As a result,the level of output increases but by a smaller amount than when the previous additional chef was hired.Which of the following best explains this occurrence?

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As more labor is hired in the short run,diminishing returns are observed because:

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Fixed costs are the same as total costs at a production rate of zero units in the short run.

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Table 5.2-Jeans Production -What is the marginal cost of the 40th pair of jeans in Table 5.2?

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Which of the following is equivalent to total cost?

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Figure 5.2: -In Figure 5.2,what is the total cost of 10 units?

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Based on the law of diminishing returns,if the number of workers increases and capital investments do not keep pace then,ceteris paribus:

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In the short run,when output is zero,total costs are zero.

Correct AnswerverifiedFalse

Table 5.1-Labor and output data -With which unit of labor do diminishing marginal returns first appear in Table 5.1?

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Table 5.5-Production costs -In Table 5.5,the marginal cost of the first unit of output is:

Correct AnswerverifiedC

Marginal physical product is the change in total output associated with an additional unit of input.

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Costs of production that do not change with the rate of output are:

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The planning period over which at least one resource input is fixed in quantity is the:

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During the short run:

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Economic profit is equal to total revenue minus:

Correct AnswerverifiedC

In the short run,if marginal cost is less than price for the last unit produced,the firm should expand output.

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Figure 5.2: -In Figure 5.2,what is the total variable cost when output is 12 units?

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Table 5.2-Jeans Production -What is the marginal cost of the 40^th pair of jeans in Table 5.2?

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False

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C

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C

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