Intro To Microeconomics: Chapter 9

b) labor

A basketball player's quickness, strength, and shooting accuracy can be considered: a) land. b) labor. c) capital. d) entrepreneurial ability.

a) labor

In the short-run, total production for a firm will typically vary with the amount of: a) labor. b) machinery. c) physical plant space. d) equipment.

b)75 dumplings

Shan's Dumpling House can produce 100 dumplings using one worker and 175 dumplings using two workers. What is the marginal product of the second worker? a) 25 dumplings b) 75 dumplings c) 175 dumplings d) 275 dumplings

b) $520,000

Sullivan Landscaping recorded a profit of $20,000 in 2009. If its total revenue was $540,000, what was its total cost? a) $54,000 b) $520,000 c) $540,000 d) $560,000

b) diminishing marginal returns

Suppose a third worker adds 15 units to total production while a fourth worker adds 8 units to total production. The company has: a) increasing marginal returns. b) diminishing marginal returns. c) decreasing marginal returns. d) constant marginal returns.

a) long-run

The _____ is a period over which no factor of production is fixed. a) long-run b) short-run c) fiscal quarter d) market period

a) marginal product

The change in output that results from a change in labor is the: a) marginal product. b) average product. c) total product. d) total cost.

b) There is limited ability to raise capital

What is a disadvantage of sole proprietorships? a) Personal assets are protected from unlimited liability. b) There is limited ability to raise capital. c) There is relatively little paperwork. d) It is difficult to establish and manage.

d) the payment of an electric bill

Which of the following is considered to be an explicit cost? a) The depreciation of a work truck. b) The depletion of a prepaid service contract. c) The opportunity cost of a firm's capital. d) The payment of an electric bill.

a) Your chiseled abs

Which of the following is the most fixed input in your production of romantic partners? a) Your chiseled abs. b) Your cool haircut. c) Your nice dancing skills. d) Your pick-up line.

b) A retail store hires five new workers

Which of the following would most likely occur in the short-run? a) A retail store opens a new branch. b) A retail store hires five new workers. c) A new firm enters the retail industry. d) Two firms leave the retail industry.

a) is a business consisting of a single owner who supervises and manages the business and is subject to unlimited liability

A sole proprietorship: a) is a business consisting of a single owner who supervises and manages the business and is subject to unlimited liability. b) has more than one owner where the owners share the management of the business and are subject to unlimited liability. c) is a business structure that has most of the legal rights of individuals and can issue stock to raise capital. Stockholders' risk is limited to the value of their investment. d) is a business in which a stockholders' risk is limited to the loss of their investment.

d) economic profits

After factoring in implicit and explicit costs, if a firm is generating profits greater than zero, it is earning: a) explicit profits. b) implicit profits. c) normal profits. d) economic profits.

c) normal costs

After factoring in implicit costs, if a firm is generating zero profit, it is earning: a) explicit profits. b) implicit profits. c) normal profits. d) economic profits.

c) at a slower pace due to diminishing returns

As more high-speed trains are built, each additional engineer hired to manage the construction is likely to increase production: a) at a rising pace due to diminishing returns. b) at a rising pace due to constant returns. c) at a slower pace due to diminishing returns. d) a slower pace due to negative returns.

d) decreases

Assume the following table described the production function for haircuts. From 2 to 3 workers the marginal product of workers: a) increases b) does not change c) can not be calculated d) decreases

b) calculated by dividing the total output by the number of workers

Average product is: a) the change in output that results from a change in labor. b) calculated by dividing the total output by the number of workers. c) the amount a certain product being produced. d) fixed costs plus variable costs.

b) an additional worker added to total output but at a decreasing rate

Diminishing marginal returns occur when: a) a new worker adds more to total output than the previous new worker, so that both average and marginal products are rising. b) an additional worker adds to total output but at a decreasing rate. c) a new worker adds several times more product to total output than does the previous new worker. d) a new worker adds nothing to total output.

c) capital

Hyundai's plant in Ulsan, South Korea, is thought to be the largest car factory in the world. It has an annual capacity of 1.86 million cars. The car factory is an example of: a) land. b) labor. c) capital. d) entrepreneurial ability.

c) $3

If LMS Manufacturing sold 300,000 units and its total revenue was $900,000, what was the price per unit? a) $1 b) $2 c) $3 d) $4

a) 10

If Willco's Manufacturing production increased from 200 units to 210 units after hiring an additional employee, what is the marginal product? a) 10 b) -10 c) 410 d) -410

c) corporation

In 1906, Will Keith Kellogg founded the Battle Creek Toasted Corn Flake Company, better known today as Kellogg's. From a company that started with only 44 employees, today Kellogg's has grown to have thousands of stockholders. Kellogg's is a: a) sole proprietorship. b) partnership. c) corporation. d) franchise.

a) a new worker adds more to total output than the previous new worker, so that both average and marginal products are rising

Increasing marginal returns occur when: a) a new worker adds more to total output than the previous new worker, so that both average and marginal products are rising. b) an additional worker adds to total output but at a diminishing rate. c) a new worker adds less to total output than the previous new worker. d) a new worker adds nothing to total output.

d) both the mental and physical talents of people

Labor as a factor of production includes: a) only the mental talents of people. b) only the physical talents of people. c) equipment and machinery. d) both the mental and physical talents of people. e) equipment and machinery, as well as the mental and physical talents of people.

b) $950

Mr. Warner buys 10 cartons of cigarettes a day for $50 each and sells them at a higher price. If Mr. Warner earns $450 in profit a day, what is his total revenue? a) $500 b) $950 c) $1,000 d) $1,850

b) 6

The following table shows the total product of labor for Adam's business, Santa Monica Artisan Cheeses. At what level of labor does Adam's business begin to have diminishing marginal returns? a) 5 b) 6 c) 7 d) 11

b) 6

The following table shows the total product of labor for Adam's business, Santa Monica Artisan Cheeses. At which level of labor is average product the highest? a) 5 b) 6 c) 8 d) 10

d) Cheese

The following would be an example of a variable input in the production of pizza: a) the rent on the locale b) the oven c) the cash register d) cheese

b) Extending her lease on her existing factory

Tina's Craft Palace is eager to expand her production of hand-made quilts. Which of the following would be least helpful to achieve her goal? a) Moving to a larger building to accommodate more workers. b) Extending her lease on her existing factory. c) Encouraging her workers to take quilting classes by paying their tuition. d) Finding a new distributor to buy less expensive quilting materials.

a) long-run

Typically, businesses that require large amounts of capital need more time to make _____ adjustments. a) long-run b) short-run c) fiscal period d) market period

d)The marginal product was negative

Varun's Coaching Center trains runners for elite races. Last week, Varun fired one of his ineffective coaches, and immediately the performance of the runners improved. What does this suggest about the marginal product of the previous coach? a) The marginal product was zero. b) The marginal product was positive but very small. c) The marginal product was positive and large. d) The marginal product was negative.