micro quiz 7
total cost divided by the quantity of output produced
average total cost is
all inputs can be varied
A characteristic of the long run is
an isoquant
A curve that shows all the combinations of two inputs, such as labor and capital, that will produce the same level of output is called
positive technological change
A firm increased its production and sales because the firm's manager rearranged the layout of his factory floor. This is an example of
is a curve that shows a firm's cost-minimizing combination of inputs for every level of output, holding input prices constant
A firm's expansion path
combinations of two inputs that result in the same total cost for a firm
An isocost line shows
for more than 4 units of labor
Fancy Footwear manufactures shoes. Figure 11-3 shows Fancy Footwear's marginal product of labor and average product of labor curves in the short run. Refer to Figure 11-3. For what quantity of labor does production start to display diminishing returns?
The marginal product of labor curve is represented by curve B and the average product of labor curve is represented by curve A.
Fancy Footwear manufactures shoes. Figure 11-3 shows Fancy Footwear's marginal product of labor and average product of labor curves in the short run. Refer to Figure 11-3. Which of the following statements correctly describes the curves in the figure?
$2000
Figure 11-7 shows the cost structure for a firm. Refer to Figure 11-7. When output level is 100, what is the total cost of production?
$8
Figure 11-7 shows the cost structure for a firm. Refer to Figure 11-7. When the output level is 100 units average fixed cost is
operating in the short run
If a producer is not able to expand its plant capacity immediately, it is
marginal costs can be either increasing or decreasing
If the average variable cost curve is above the marginal cost curve, then
average variable cost is decreasing
If the marginal cost curve is below the average variable cost curve, then
economies of scale
If, when a firm doubles all its inputs, its average cost of production decreases, then production displays
diseconomies of scale
If, when a firm doubles all its inputs, its average cost of production increases, then production displays
the division of labor and specialization
Increases in the marginal product of labor result from
change in total cost divided by the change in output
Marginal cost is equal to the
the 2nd worker is hired
Refer to Figure 11-1. Diminishing marginal productivity sets in after
17
Refer to Figure 11-1. The average product of the 4th worker is
15
Refer to Figure 11-1. The marginal product of the 3rd worker is
E = marginal cost curve; F = average total cost curve; G = average variable cost curve; H = average fixed cost curve
Refer to Figure 11-5. Identify the curves in the diagram.
3rd
Table 11-1 shows the technology of production at the Matsuko's Mushroom Farm for the month of May. Refer to Table 11-1. Diminishing marginal returns sets in when the ________ worker is hired.
10.8 pounds
Table 11-1 shows the technology of production at the Matsuko's Mushroom Farm for the month of May. Refer to Table 11-1. What is the average product of labor when the farm hires 5 workers?
5 pounds
Table 11-1 shows the technology of production at the Matsuko's Mushroom Farm for the month of May. Refer to Table 11-1. What is the marginal product of the 4th worker?
a total product curve that eventually increases at a decreasing rate
The Law of Diminishing Returns results in
accounting cost
The explicit cost of production is also called
technology
The processes a firm uses to turn inputs into outputs of goods and services is called
marginal rate of technical substitution
The rate at which a firm is able to substitute one input for another while keeping the level of output constant is called the
production function
The relationship between the inputs employed by a firm and the maximum output that it can produce with those inputs is the firm's
explicit and implicit costs
To the economist, total cost includes
constant returns to scale
When a firm's long-run average cost curve is horizontal for a range of output, then that range of production displays
opportunity costs of capital owned and used by the firm
Which of the following are implicit costs for a typical firm?
AFC + AVC = ATC
Which of the following equations is correct?
As the size of the firm increases it becomes more difficult to coordinate the operations of its manufacturing plants
Which of the following is a reason why a firm would experience diseconomies of scale?
forgone rent from building owned and used by Company X
Which of the following is most likely to be an implicit cost for Company X?
wages and salaries
Which of the following is typically considered a fixed cost by academic book publishers but a variable cost by companies that print books?
Diminishing returns apply only to the short run; diseconomies of scale apply only in the long run
Which of the following statements explains the difference between diminishing returns and diseconomies of scale?
As output increases, average fixed cost becomes smaller and smaller
Which of the following statements is true?
Total cost = fixed cost + variable cost
Which of the following statements is true?
Marginal cost
additional cost of producing an additional unit of output
marginal product of labor
the change in output that a firm produces as a result of hiring one more worker
the maximum output that can be produced from a set of inputs
the production function shows
The minimum efficient scale
the smallest level of operation where long-run average costs are lowest