intro to micro chapter 9 quiz
in comparing the changes in TVC and TC associated with an additional unit of output, we find that a) no generalization about the changes in TC and TVC can be made b) the changes in TC and TVC are equal c) the change in TC is greater than the change in TVC d) the change in TVC is greater than the change in TC
b
production costs to an economist a) consist only of explicit costs b) reflect opportunity costs c) never reflect monetary outlays d) always reflect monetary outlays
b
the long-run average total cost curve a) displays declining unit costs so long as output is increasing b) indicates the lowest unit costs achievable when a firm has had sufficient time to alter plant size c) has a shape that is the inverse law of diminishing returns d) can be derived by summing horizontally the average total cost curves of all firms in an industry
b
which of the following represents a long-run adjustment a) a farmer uses an extra dose of fertilizer on his corn crop b) unable to meet foreign competition, a U.S. watch manufacturer sells one of its branch plants c) a steel manufacturer cuts back on its purchases of coke and iron ore d) a supermarket hires four additional clerks
b
c
refer to the diagram, where variable inputs of labor are being added to a constant amount of proper resources. the total output of this firm will cease to expand a) if a labor force in excess of Q1 is employed b) if a labor force in excess of Q2 is employed c) if a labor force in excess of Q3 is employed d) only if the marginal product curve becomes negative at all levels of output
a
refer to the graph. which of the following would cause a move from point b to point c along short-run average total cost curve ATC1 a) diminishing marginal returns b) an increase in the wage rate c) a decrease in the wage rate d) increasing marginal returns
which of the following is correct a) when total product is rising, both average product and marginal product must also be rising b) when marginal product is falling, total product must be falling c) when marginal product is falling, average product must also be falling d) marginal product rises faster than average product and also falls faster than average product
d
marginal cost a) equals both average variable cost and average total cost at their respective minimums b) is the difference between total cost and total variable cost c) rises for a time but then begins to decline when diminishing returns set in d) declines continuously as output increases
a
marginal product is a) the change in total output attributable to the employment of one more worker b) the change in total revenue attributable to the employment of one more worker c) the change in total cost attributable to the employment of one more worker d) total product divided by the number of workers employed
a
the law of diminishing returns indicates that a) as extra units of a variable resource are added to a fixed resource, marginal product will decline beyond some point b) because of economies and diseconomies of scale, a competitive firm's long-run average total cost curve will be U-shaped c) the demand for goods produced by purely competitive industries is downsloping d) beyond some point, the extra utility derived from additional units of a product will yield the consumer smaller and smaller extra amounts of satisfaction
a
b
as the firm in the diagram expands from plant size #1 to plant size #3, it experiences a) diminishing returns b) economies of scale c) diseconomies of scale d) constant costs
In the short run, the Sure-Screen T-Shirt Company is producing 500 units of output. Its average variable costs are $2.00 and its average fixed costs are $.50. The firm's total costs a) are $2.50 b) are $1,250 c) are $750 d) are $1,100
b
diseconomies of scale arise primarily because a) the short run average total cost curves rise when marginal product is increasing b) of the difficulties involved in managing and coordinating a large enterprise c) firms must be large both absolutely and relative to the market to employ the most efficient productive techniques available d) beyond some point, marginal product declines as additional units of a variable resource are added to a fixed resource
b
b
In the diagram it is assumed that a) some costs are fixed and other costs are variable b) all costs are variable c) the law of diminishing returns determines the shape of the cost curve d) marginal product first falls, but ultimately rises as output is increased
a
In the diagram, total product will be a maximum at a) Q3 units of labor b) Q2 units of labor c) Q1 units of labor d) some point that cannot be determined with the provided information
a natural monopoly exists when a) unit costs are minimized by having one firm produce an industry's entire output b) several formerly competing producers merge to become the only firm in an industry c) short-run average total cost curves are tangent to long-run average total cost curves d) minimum efficient scale is attained at a small level of output
a
if a firm decides to produce no output in the short run, its cost will be a) its marginal costs b) its variable costs c) its fixed costs d) zero
c
if an industry's long-run average total cost curve has an extended range of constant returns to scale, this implies that a) technology precludes both economies and diseconomies of scale b) the industry will be a natural monopoly c) both relatively small and relatively large firms can be viable in the industry d) the industry will comprise a very large number of small firms
c
if in the short run a firm's total product is increasing, then its a) marginal product must also be increasing b) marginal product must be decreasing c) marginal product could either be increasing or decreasing d) average product must also be increasing
c
in the short run, which of the following statements is correct a) the marginal cost curve intersects the average variable and average fixed cost curves at their minimum points b) average variable cost declines continuously as total output is expanded c) total cost will exceed variable cost d) if the inputs of all resources are increased by equal amounts, total output will expand by diminishing amounts
c
other things equal, if the prices of a firm's variable inputs were to fall, a)one could not predict how unit costs of production would be affected b) marginal cost, average variable cost, and average fixed cost would all fall c) marginal cost, average variable cost, and average total cost would all fall d) average variable cost would fall, but marginal cost would be unchanged
c
which of the following constitutes an implicit cost to the Johnston Manufacturing Company? a) payments of wages to its office workers b) rent paid for the use of equipment owner by the Schultz Machinery Company c) use of savings to pay operating expenses instead of generating interest income d) economic profits resulting from current production
c