Econ Quiz Chp 5

What is the average product of labor, given that the level of labor equals 10, total output equals 1200, and the marginal product of labor equals 200? 6 2,000 20 120

120 Total Output / Labor Level

Which curve(s) does the marginal cost curve intersect at the (their) minimum point? Average total cost curve Average total cost curve and average variable cost curve Average variable cost curve Average fixed cost curve

Average total cost curve and average variable cost curve

Total product begins to fall when: Average product is negative. Marginal product is maximized. Marginal product is zero. Average product is below zero.

Marginal product is zero.

Firm managers should use inputs at levels where the: Price equals marginal product. Value marginal product of labor equals wage. Price equals marginal cost. Price equals marginal cost and value marginal product of labor equals wage.

Price equals marginal cost and value marginal product of labor equals wage.

The demand for labor by a profit-maximizing firm is determined by: P = W. VMPL = W. VMPL = MC. P = MC.

VMPL = W.

The difference between average total costs and average variable costs is: marginal cost. average fixed cost. marginal product. fixed cost.

average fixed cost.

Average fixed cost: declines continuously as output is expanded. initially declines, reaches a minimum, and then begins to increase as output increases. keeps constant as output is expanded. increases continuously as output increases.

declines continuously as output is expanded.

When the marginal cost curve is below an average cost curve, average cost is: not varying with output. constant. increasing with output. declining with output.

declining with output.

It is profitable to hire units of labor as long as the value of marginal product: equals price. exceeds the wage. exceeds average product. is less than the wage.

exceeds the wage.

As long as marginal product is increasing, marginal product is: equal to total product. greater than average product. equal to average output. less than average product.

greater than average product.

The short run is defined as the time frame: in which there are no fixed factors of production. in which there are fixed factors of production. less than one year. less than three years.

in which there are fixed factors of production.

As the usage of an input increases, marginal product: consistently increases. consistently decreases. initially increases then begins to decline. initially decreases then begins to increase.

initially increases then begins to decline.

The marginal cost curve: intersects the ATC and AVC at their minimum points. always lies above the average variable cost curve (AVC). always lies below the average total cost curve (ATC). intersects the ATC and AVC at their maximum points.

intersects the ATC and AVC at their minimum points.

The change in total output attributable to the last unit of an input is the: total product. marginal product. marginal return. average product.

marginal product

The value of marginal product of an input is the: average output produced by inputs. total output produced by total inputs. output produced by the first unit of an input. output produced by the last unit of an input.

output produced by the last unit of an input.

If the last unit of input increases total product, we know that the marginal product is: negative. positive. indeterminate. zero.

positive

A production function: represents the technology available for turning inputs into output. is determined only by the expenditures on R&D. defines the minimum amount of output that can be produced with inputs such as capital and labor. defines the average amount of output that can be produced with inputs such as capital and labor.

represents the technology available for turning inputs into output.

Fixed costs exist only in: the short run. capital-intensive markets. the long run. labor-intensive markets.

the short run.

Costs that change as output changes are: variable costs. sunk costs. fixed costs. opportunity costs.

variable costs.

Inputs a manager may adjust in order to alter production are: all factors. variable factors. fixed factors. long-run factors.

variable factors.