Microecon Unit 5

total product is 18.

Refer to the below data. When two workers are employed: total product is 20. total product is 18. average product is 10. total product cannot be determined from the information given.

how a firm turns inputs into output.

A production function describes a. how a firm maximizes profits. b. how a firm turns inputs into output. c. the minimal cost of producing a given level of output. d. the relationship between cost and output.

economies of scale.

As the firm in the above diagram expands from plant size #1 to plant size #3, it experiences: diminishing returns. economies of scale. diseconomies of scale. constant costs.

average fixed cost is high.

Average total cost is very high when a small amount of output is produced because a. average fixed cost is high. b. marginal product is high. c. average variable cost is high. d. marginal cost is high.

AFC

Which of the following curves is not U-shaped? MC AFC AVC ATC

is measured by both QF and ED.

Refer to the above diagram. At output level Q average fixed cost: is equal to EF. is equal to QE. is measured by both QF and ED. cannot be determined from the information given.

marginal product is falling.

Refer to the above diagram. At output level Q: marginal product is falling. marginal product is rising. marginal product is negative. one cannot determine whether marginal product is falling or rising.

the average fixed cost at each level of output.

Refer to the above diagram. The vertical distance between ATC and AVC reflects: the law of diminishing returns. the average fixed cost at each level of output. marginal cost at each level of output. the presence of economies of scale.

$8.

Refer to the below data. The average fixed cost of producing 3 units of output is: $8. $7.40. $5.50. $6.

$8.

Refer to the below data. The marginal cost of producing the sixth unit of output is: $24. $12. $16. $8.

BCDE

Refer to the below diagram. At output level Q total fixed cost is: 0BEQ. BCDE. 0BEQ - 0AFQ. 0CDQ.

0BEQ

Refer to the below diagram. At output level Q total variable cost is: 0BEQ. BCDE. 0CDQ. 0AFQ.

the law of diminishing product of labor.

If a variable input is added to some fixed input, beyond some point the resulting extra output will decline. This statement describes: economies and diseconomies of scale. X-inefficiency. the law of diminishing product of labor. the law of diminishing marginal utility.

MC, ATC, AVC, and AFC curves respectively.

In the above figure, curves 1, 2, 3, and 4 represent the: ATC, MC, AFC, and AVC curves respectively. MC, AFC, AVC, and ATC curves respectively. MC, ATC, AVC, and AFC curves respectively. ATC, AVC, AFC, and MC curves respectively.

$16.

Refer to the below data. The average total cost of producing 3 units of output is: $14. $12. $13.50. $16.

d. $250

A firm has a fixed cost of $500 in its first year of operation. When the firm produces 100 units of output, its total costs are $3,500. When it produces 101 units of output, its total costs are $3,750. What is the marginal cost of producing the 101st unit of output? a. $340.91 b. $275 c. $350 d. $250

a. $4,800

A firm has a fixed cost of $500 in its first year of operation. When the firm produces 100 units of output, its total costs are $4,500. The marginal cost of producing the 101st unit of output is $300. What is the total cost of producing 101 units? a. $4,800 b. $800 c. $46.53 d. $5,300

average variable cost is $3.

A firm produces 300 units of output at a total cost of $1,000. If fixed costs are $100, a. average variable cost is $3. b. average fixed cost is $10. c. average total cost is $5. d. average total cost is $4.

are short-run decisions.

A local playground equipment company plans to operate out of its current factory, which is estimated to last 30 years. All cost decisions it makes during the 30-year period a. are zero because the cost decisions were made at the beginning of the business. b. are short-run decisions. c. involve only maintenance of the factory. d. are long-run decisions.

greater than economic profits because the former do not take implicit costs into account

Accounting profits are typically: greater than economic profits because the former do not take explicit costs into account. equal to economic profits because accounting costs include all opportunity costs. smaller than economic profits because the former do not take implicit costs into account. greater than economic profits because the former do not take implicit costs into account

diminishing marginal product.

As Bubba's Bubble Gum Company adds workers while using the same amount of machinery, some workers may be underutilized because they have little work to do while waiting in line to use the machinery. When this occurs, Bubba's Bubble Gum Company encounters a. economies of scale. b. increasing marginal product. c. diseconomies of scale. d. diminishing marginal product.

in the short run but not in the long run.

Assume a certain firm regards the number of workers it employs as variable but regards the size of its factory as fixed. This assumption is often realistic a. in the long run but not in the short run. b. both in the short run and in the long run. c. neither in the short run nor in the long run. d. in the short run but not in the long run.

any cost which does not change when the firm changes its output.

Fixed cost is: the cost of producing one more unit of capital, say, machinery. any cost which does not change when the firm changes its output. average cost multiplied by the firm's output. usually zero in the short run.

its fixed costs.

If a firm decides to produce no output in the short run, its costs will be: its marginal costs. its fixed plus its variable costs. its fixed costs. zero.

marginal cost must be less than average total cost.

If average total cost is declining, then: marginal cost must be greater than average total cost. the average fixed cost curve must lie above the average variable cost curve. marginal cost must be less than average total cost. total cost must also be declining.

total fixed cost, total variable cost, and total cost respectively.

In the above diagram curves 1, 2, and 3 represent: average variable cost, marginal cost, and average fixed cost respectively. total variable cost, total fixed cost, and total cost respectively. total fixed cost, total variable cost, and total cost respectively. marginal product, average variable cost, and average total cost respectively.

0BEQ plus BCDE.

Refer to the above diagram. At output level Q total cost is: 0BEQ. BCDE. 0BEQ plus BCDE. 0AFQ plus BCDE.

third worker.

Refer to the below data. Diminishing marginal product of labor become evident with the addition of the: sixth worker. fourth worker. third worker. second worker.

is 5.

Refer to the below data. The marginal product of the fourth worker: is 5. is 7. is 71/2. cannot be calculated from the information given.

15 units of output.

Refer to the below data. The marginal product of the sixth worker is: 180 units of output. 30 units of output. 15 units of output. negative.

cannot be determined from the information given.

Refer to the below data. The profit-maximizing output for this firm: is 3. is 4. is 5. cannot be determined from the information given.

$37.

Refer to the below data. The total variable cost of producing 5 units is: $61. $48. $37. $24.

$200,000 and its economic profits were zero.

Suppose that a business incurred implicit costs of $200,000 and explicit costs of $1 million in a specific year. If the firm sold 4,000 units of its output at $300 per unit, its accounting profits were: $100,000 and its economic profits were zero. $200,000 and its economic profits were zero. $100,000 and its economic profits were $100,000. zero and its economic loss was $200,000.

profits were zero and its economic losses were $500,000.

Suppose that a business incurred implicit costs of $500,000 and explicit costs of $5 million in a specific year. If the firm sold 100,000 units of its output at $50 per unit, its accounting: profits were $100,000 and its economic profits were zero. losses were $500,000 and its economic losses were zero. profits were $500,000 and its economic profits were $1 million. profits were zero and its economic losses were $500,000.

increasing marginal product, followed by diminishing marginal product.

The above diagram shows the short-run average total cost curves for five different plant sizes of a firm. The shape of each individual curve reflects: increasing marginal product, followed by diminishing marginal product. economies of scale, followed by diseconomies of scale. constant costs. increasing costs, followed by decreasing costs.

the firm does not have sufficient time to change the size of its plant.

The basic characteristic of the short run is that: barriers to entry prevent new firms from entering the industry. the firm does not have sufficient time to change the size of its plant. the firm does not have sufficient time to cut its rate of output to zero. a firm does not have sufficient time to change the amounts of any of the resources it employs.

in the long run all resources are variable, while in the short run at least one resource is fixed.

To economists, the main difference between the short run and the long run is that: -the law of diminishing returns applies in the long run, but not in the short run. -in the long run all resources are variable, while in the short run at least one resource is fixed. -fixed costs are more important to decision making in the long run than they are in the short run. -in the short run all resources are fixed, while in the long run all resources are variable.

Economic profit = accounting profit - implicit costs.

Which of the following definitions is correct? Accounting profit + economic profit = normal profit. Economic profit - accounting profit = explicit costs. Economic profit = accounting profit - implicit costs. Economic profit - implicit costs = accounting profits.

When MP is rising MC is falling, and when MP is falling MC is rising.

Which of the following is correct? There is no relationship between MP and MC. When AP is rising MC is falling, and when AP is falling MC is rising. When MP is rising MC is rising, and when MP is falling MC is falling. When MP is rising MC is falling, and when MP is falling MC is rising.

40

​Refer to Table 13-7. ​What is total output when 1 worker is hired? a. ​40 b. ​85 c. 45 d. ​0