ch 13 micro prac quiz

Diminishing marginal productivity implies decreasing total product.

false

If the marginal cost of producing the tenth unit of output is $3, and if the average total cost of producing the tenth unit of output is $2, then at ten units of output, average total cost is

rising

Joan grows pumpkins. If Joan plants no seeds on her farm, she gets no harvest. If she plants 1 bag of seeds, she gets 500 pumpkins. If she plants 2 bags, she gets 800 pumpkins. If she plants 3 bags, she gets 900 pumpkins. A bag of seeds costs $100, and seeds are her only cost.

increasing at an increasing rate

Diseconomies of scale occur when

long-run average total cost rises as the quantity of output increases increasing coordination problems

Economies of scale occur when

long-run average total costs fall as output increases increasing specialization among workers

In his book, An Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith credits economies of scale to

specialization

The shape of the ________ is inversely related to the shape of the _______________

total-cost curve, production function

The field of industrial organization addresses how the number of firms affects prices in a market and the efficiency of the market outcome.

true

The shape of the marginal cost curve tells a producer something about the marginal product of her workers.

true

When a firm is able to put idle equipment to use by hiring another worker,

variable costs will rise

The graph illustrates a typical production function. Based on its shape, what does the corresponding total costcurve look like?

an upward-sloping curve that increases at an increasing rate

Which of the following measures of cost is best described as "the cost of a typical unit of output if total cost is divided evenly over all the units produced?"

average total cost

When a firm is experiencing economies of scale, long-run

average total cost is greater than long-run marginal cost.

Rising marginal cost curve

because of diminishing marginal product

Adam Smith describes a visit to a car factory when discussing economies of scale in his book An Inquiry into the Nature and Causes of the Wealth of Nations.

false

Fixed costs are those costs that remain fixed no matter how long the time horizon is.

false

If the marginal cost of producing the fifth unit of output is higher than the marginal cost of producing the fourth unit of output, then at five units of output, average total cost must be rising.

false

The marginal-cost curve intersects the average-total-cost curve at the minimum point of the marginal-cost curve.

false