Econ quiz 7

Which of the following is most likely to be a fixed cost

Property insurance premiums

fixed cost is:

any cost which does not change when the firm changes its output

which of the following best expresses the law of diminishing returns

as successive amounts of one resource(labor) are added to fixed amounts of other resources (property) beyond some point the resulting extra output will decline

the short run is characterized by

at least one fixed resource

for most producing firms:

average total costs decline as output is carried to a certain level, and then begin to rise

marginal cost is the

change in total cost that results from producing one more unit of output

Marginal Cost

equals both average variable cost and average total cost at their respective minimums

if a firm decides to produce no output in the short run, its costs will be:

its fixed costs

which of the following is correct as it relates to cost curves

marginal cost intersects average total cost at the latter's minimum point

if in the short run a firms total product is increasing, then its

marginal product could be either increasing or decreasing

the first, second and third workers employed by a firm add 24,18, and 9 units to total product respectively. Therefore the:

marginal product of the third worker is 9

Which of the following is correct

marginal product rises faster than average product and also falls faster than average product

in the above diagram curves 1, 2, and 3 represent the:

marginal, average, and total product curves respectively

marginal product

may initially increase, then diminish, and ultimately become negative

The Law of diminishing returns describe the:u

relationship between resource inputs and product outputs in the short run

Refer to the above data, the marginal product of the 6th worker is

15 units of output

refer to the above data. Average Product is at a maximum when:

2 workers are hired

the total output of a firm will be at a maximum where:

MP is Zero

Other things equal, if the prices of a firms variable inputs were to fall

Marginal Cost, Average variable cost, and average total cost would all fall

Refer to the above diagram. At output level Q total variable cost is:

Obeq

which of the following statements concerning the relationships between total product, average product, and marginal product is not correct

AP continues to rise so long as tp is rising

the law of diminishing returns indicate that

As extra units of a variable resource are added to a fixed resource, marginal product will decline beyond some point

the law of diminishing returns result in

a total product curve that eventually increases at a decreasing rate

If you operated a small bakery which of the following would be a variable cost in the short run?

baking supplies (flour, salt, etc.)

average fixed cost

declines continually as output increases

If a variable is added to some fixed input, beyond some point the resulting extra output will decline. This statement describes

the Law of diminishing returns

the long run is characterized by

the ability of the firm to change its plant size

Marginal product is:

the increase in total output attributable to the employment of one ore worker

the above diagram suggests that

when marginal product lies above average product, average product is rising

which of the following is not correct

where total product is at maximum, average product is also at maximum