Question 1

-In the above table, what is the marginal cost to produce the 5th unit of output?

Accepted Answer

A)   $80
B)   $60
C)   $55
D)   $20E) A) and B)
F) B) and C)

Question 2

-In the above figure, point B is called

Accepted Answer

A)   the maximum efficient scale.
B)   the minimum efficient scale.
C)   the planning horizon.
D)   the point of diminishing marginal product.E) A) and B)
F) A) and C)

Question 3

-Use the above figure. At an output equal to "Q" the average fixed cost for the firm will be the line segment

Accepted Answer

A)   DE.
B)   AB.
C)   BE.
D)   CD.E) B) and C)
F) A) and D)

Question 4

-Refer to the above figure. The firm that produces an output between Q1 to Q2 is experiencing

Accepted Answer

A)   constant returns to scale.
B)   diseconomies of scale.
C)   diminishing marginal product.
D)   economies of scale.E) A) and C)
F) None of the above

Question 5

-In the above table, marginal product becomes negative after employing the

Accepted Answer

A)   second worker.
B)   third worker.
C)   fourth worker.
D)   fifth worker.E) A) and B)
F) C) and D) C

Question 6

Which of the following is NOT a reason a firm might experience economies of scale?

Accepted Answer

A)   specialization
B)   dimensional factors
C)   increasing long-run average costs
D)   more productive equipmentE) B) and C)
F) C) and D)

Question 7

-Refer to the above table. What does total product equal when 4 units of labor are used?

Accepted Answer

A)   1328
B)   332
C)   320
D)   960E) B) and C)
F) B) and D)

Question 8

As a firm's production increases in the short run, the average total cost curve eventually slopes upward because

Accepted Answer

A)   marginal physical product eventually declines as output increases.
B)   marginal cost eventually declines as output increases.
C)   average fixed cost declines with increases in output.
D)   average physical product rises with increases in output.E) A) and B)
F) C) and D)

Question 9

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) B) and D)
F) None of the above

Question 10

The ratio of total costs to the quantity produced is referred to as

Accepted Answer

A)   average fixed costs.
B)   average variable costs.
C)   marginal costs.
D)   average total costs.E) A) and B)
F) None of the above

Question 11

The concept of the production function implies that a firm using resources inefficiently will

Accepted Answer

A)   obtain less output than the theoretical production function shows.
B)   obtain more output than the theoretical production function shows.
C)   obtain exactly the amount that the theoretical production function shows.
D)   not be subject to diminishing marginal product.E) All of the above
F) B) and C)

Question 12

-In the above table, what is the average variable cost to produce 2 units of output?

Accepted Answer

A)   $25
B)   $60
C)   $55
D)   $20E) A) and B)
F) B) and C)

Question 13

-Use the above figure. The AVC at output 5 is

Accepted Answer

A)   $35.00.
B)   $2.00.
C)   $3.00.
D)   $5.00.E) A) and D)
F) B) and D)

Question 14

-In the above table, the average product for 3 units of labor is

Accepted Answer

A)   30.0.
B)   26.7.
C)   26.3.
D)   25.0.E) A) and B)
F) B) and C) B

Question 15

-Refer to the above table. When the quantity of labor equals 2, what does the average product equal?

Accepted Answer

A)   46
B)   23
C)   26
D)   92E) All of the above
F) A) and C) B

Question 16

-In the above table, what is the average variable cost to produce 3 units of output?

Accepted Answer

A)   $30
B)   $60
C)   $10
D)   $20E) B) and D)
F) B) and C)

Question 17

When total product is increasing at a decreasing rate, marginal product is

Accepted Answer

A)   positive and increasing.
B)   positive and decreasing.
C)   constant.
D)   negative.E) None of the above
F) A) and B)

Question 18

McDonald's is a fast-food restaurant chain. Which of the following would be a long-run decision for McDonald's?

Accepted Answer

A)   open a new restaurant in a city
B)   hire one more worker in a restaurant location
C)   supply more hamburgers in one restaurant
D)   replace the manager of a restaurantE) All of the above
F) B) and C)

Question 19

When El Torito Restaurant is deciding how many waiters to hire for a holiday weekend, it is making a ________ decision.

Accepted Answer

A)   plant-size
B)   long-run
C)   short-run
D)   fixed-inputE) A) and B)
F) B) and C)

Question 20

Which of the following is NOT one of the reasons a firm might be expected to experience economies of scale?

Accepted Answer

A)   specialization
B)   the dimensional factor
C)   improved productive equipment
D)   depreciationE) B) and C)
F) None of the above

Exam 22: The Firm: Cost and Output Determination

-In the above table, what is the marginal cost to produce the 5th unit of output?

Correct AnswerverifiedShow Answer

-In the above figure, point B is called

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-Use the above figure. At an output equal to "Q" the average fixed cost for the firm will be the line segment

Correct AnswerverifiedShow Answer

-Refer to the above figure. The firm that produces an output between Q1 to Q2 is experiencing

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-In the above table, marginal product becomes negative after employing the

Correct AnswerverifiedC

Which of the following is NOT a reason a firm might experience economies of scale?

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-Refer to the above table. What does total product equal when 4 units of labor are used?

Correct AnswerverifiedShow Answer

As a firm's production increases in the short run, the average total cost curve eventually slopes upward because

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As long as output increases

Correct AnswerverifiedShow Answer

The ratio of total costs to the quantity produced is referred to as

Correct AnswerverifiedShow Answer

The concept of the production function implies that a firm using resources inefficiently will

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-In the above table, what is the average variable cost to produce 2 units of output?

Correct AnswerverifiedShow Answer

-Use the above figure. The AVC at output 5 is

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-In the above table, the average product for 3 units of labor is

Correct AnswerverifiedB

-Refer to the above table. When the quantity of labor equals 2, what does the average product equal?

Correct AnswerverifiedB

-In the above table, what is the average variable cost to produce 3 units of output?

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When total product is increasing at a decreasing rate, marginal product is

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McDonald's is a fast-food restaurant chain. Which of the following would be a long-run decision for McDonald's?

Correct AnswerverifiedShow Answer

When El Torito Restaurant is deciding how many waiters to hire for a holiday weekend, it is making a ________ decision.

Correct AnswerverifiedShow Answer

Which of the following is NOT one of the reasons a firm might be expected to experience economies of scale?

Correct AnswerverifiedShow Answer

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C

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B

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B

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