Microeconomics Quiz 7 (Part 2) Exam 3
The minimum efficient scale is
the smallest level of operation where long-run average costs are lowest.
all inputs can be varied.
A characteristic of the long run is
an isoquant.
A curve that shows all the combinations of two inputs, such as labor and capital, that will produce the same level of output is called
positive technological change.
A firm increased its production and sales because the firm's manager rearranged the layout of his factory floor. This is an example of
operating in the short run.
If a producer is not able to expand its plant capacity immediately, it is
economies of scale.
If, when a firm doubles all its inputs, its average cost of production decreases, then production displays
diseconomies of scale.
If, when a firm doubles all its inputs, its average cost of production increases, then production displays
the 2nd worker is hired
Refer to Figure 11-1. Diminishing marginal productivity sets in after
is 17
Refer to Figure 11-1. The average product of the 4th worker
15
Refer to Figure 11-1. The marginal product of the 3rd worker is
for more than 4 units of labor
Refer to Figure 11-3. For what quantity of labor does production start to display diminishing returns?
The marginal product of labor curve is represented by curve B and the average product of labor curve is represented by curve A.
Refer to Figure 11-3. Which of the following statements correctly describes the curves in the figure?
E = marginal cost curve; F = average total cost curve; G = average variable cost curve; H = average fixed cost curve.
Refer to Figure 11-5. Identify the curves in the diagram.
$2,000
Refer to Figure 11-7. When output level is 100, what is the total cost of production?
$8.
Refer to Figure 11-7. When the output level is 100 units average fixed cost is
3rd
Refer to Table 11-1. Diminishing marginal returns sets in when the ________ worker is hired.
10.8 pounds
Refer to Table 11-1. What is the average product of labor when the farm hires 5 workers?
5 pounds
Refer to Table 11-1. What is the marginal product of the 4th worker?
a total product curve that eventually increases at a decreasing rate.
The Law of Diminishing Returns results in
accounting cost.
The explicit cost of production is also called
technology.
The processes a firm uses to turn inputs into outputs of goods and services is called
the maximum output that can be produced from a set of inputs.
The production function shows
marginal rate of technical substitution.
The rate at which a firm is able to substitute one input for another while keeping the level of output constant is called the
production function.
The relationship between the inputs employed by a firm and the maximum output that it can produce with those inputs is the firm's
explicit and implicit costs
To the economist, total cost includes
constant returns to scale.
When a firm's long-run average cost curve is horizontal for a range of output, then that range of production displays
opportunity costs of capital owned and used by the firm
Which of the following are implicit costs for a typical firm?
AFC + AVC = ATC
Which of the following equations is correct?
As the size of the firm increases it becomes more difficult to coordinate the operations of its manufacturing plants.
Which of the following is a reason why a firm would experience diseconomies of scale?
forgone rental income from building owned by Company X, that is vacant
Which of the following is most likely to be an implicit cost for Company X?
wages and salaries
Which of the following is typically considered a fixed cost by academic book publishers but a variable cost by companies that print books?
Diminishing returns apply only to the short run; diseconomies of scale apply only in the long run.
Which of the following statements explains the difference between diminishing returns and diseconomies of scale?
As output increases, average fixed cost becomes smaller and smaller.
Which of the following statements is true?
Total cost = fixed cost + variable cost.
Which of the following statements is true?
Marginal cost is the
additional cost of producing an additional unit of output.
If the marginal cost curve is below the average variable cost curve, then
average variable cost is decreasing.
Marginal cost is equal to the
change in total cost divided by the change in output.
An isocost line shows
combinations of two inputs that result in the same total cost for a firm.
A firm's expansion path
is a curve that shows a firm's cost-minimizing combination of inputs for every level of output, holding input prices constant.
If the average variable cost curve is above the marginal cost curve, then
marginal costs can be either increasing or decreasing.
The marginal product of labor is defined as
the change in output that a firm produces as a result of hiring one more worker.
Increases in the marginal product of labor result from
the division of labor and specialization.
Average total cost is
total cost divided by the quantity of output produced.
