EC-031 Posttest

Which stage of production involves diminishing returns?

second

A company is facing negative returns. Which stage of production is the company in?

third

If you multiply price by quantity sold, you'll find

total revenue

In one day of selling pizzas, a pizza parlor takes in $1,500. This is the pizza parlor's

total revenue

Which of the following formulas would you use to find marginal cost:

∆TC ÷ ∆O

According to the law of diminishing returns, what will happen to the output of a taco truck if it continues to hire employees?

Increases in output will eventually decline.

Which of the following is true of marginal product:

It will eventually decrease as inputs are added.

A restaurant's total cost of selling eight hamburgers is $10.00. Its total cost of selling nine hamburgers is $11.00. What is the marginal cost?

$1.00

Your total revenue for one product is $10.00. Your total revenue for two products is $20.00. What is your marginal revenue?

$10.00

If a company's marginal revenue is always $6.00, what does the marginal cost have to be for the company to earn the maximum amount of profit?

$6.00

A factory produces 20 parts with two employees. With three employees, it produces 45 parts. What is its marginal product?

25 parts

A bakery hires more employees and, at first, the number of baked goods it produces rises quite quickly. However, as more and more employees are hired, it starts to slow down. This is an example of the law of __________ returns.

diminishing

With each employee that a company hires, its marginal product is greater. Which stage of production is this company in?

first

Capital and labor are both examples of

inputs

The production function explains the relationship between

inputs and outputs

Marginal cost is inversely related to

marginal product

If you divide the change in total revenue by the change in quantity sold, you'll find

marginal revenue

Maximum profit is achieved when

marginal revenue equals marginal cost.

The tomatoes that a farm produces are considered the farm's

outputs

Q = f(L,K) is an equation that expresses the __________ function.

production