Chapter 13 Multiple Choice
Assume a certain firm regards # of workers/ regards size if factory...
IN THE SHORT RUN, BUT NOT IN THE LONG RUN
In the long run...
INPUTS THAT WERE FIXED IN THE SHORT RUN BECOME VARIABLE
When a factory is operating in the short run...
IT CAN NOT ADJUST THE QUANTITY OF FIXED INPUTS
Suppose Jan... small lemonade stand... variable cost is?
LEMONADE MIX
Constant returns to scale refers to a situation...
LONG RUN AVERAGE TOTAL COST DOES NOT CHANGE AS QUANTITY OF OUTPUT CHANGES
Constant returns to scale occur when...
LONG RUN AVERAGE TOTAL COSTS ARE CONSTANT AS OUTPUT INCREASE
Economies of scale occur when...
LONG RUN AVERAGE TOTAL COSTS FALL AS OUTPUT INCREASES
Diseconomies of scale occur when...
LONG RUN AVERAGE TOTLA COST RISE AS OUTPUT INCREASES
Amount by which total cost rises when the firm produces one additional unit of output...
MARGINAL COST
The cost of producing an additional unit of output is..
MARGINAL COST
One of the most important qualities of a cost curve is...
MARGINAL COST CURVE RISES WITH QUANTITY OF OUTPUT
Average total cost is increasing whenever...
MARGINAL COST IS GREATER THAN ATC
Diminishing marginal product suggests that...
MARGINAL COST IS UPWARD SLOPING
If marginal cost is rising...
MARGINAL PRODUCT MUST BE FALLING
The efficient scale of the firm is the quantity of output...
MINIMIZES AVERAGE TOTAL COST
Which about cost is correct?
QUANTITY OF OUTPUT INCREASES, MARGINAL COST RISE
The marginal product of an input in the production process in the increase in...
QUANTITY OF OUTPUT OBTAINED FROM AN ADDITIONAL UNIT OF THAT INPUT
Total cost curve shows...
QUANTITY OF OUTPUT PRODUCED AND TOTAL COST OF PRODUCTION
Explicit costs...
REQUIRE AN OUTLAY OF MONEY BY THE FIRM
At all levels of production beyond...
RISING
Which about production function is correct...
THE PRODUCTION FUNCTION DEPICTS RELATIONSHIP BETWEEN QUANTITY OF LABOR AND QUANTITY OF OUTPUT
Average total cost is equal to...
TOTAL COST/OUTPUT
Profit...
TOTAL REV MINUS TOTAL COST
Econ profit equals...
TOTAL REVENUE-EXPLICIT AND IMPLICIT & TOTAL REV- OPPORTUNITY COSTS
In the long run, a firm that produces and sells computers get to choose...
ALL THE ABOVE
The average fixed cost curve...
ALWAYS DECLINE WITH INCREASED LEVELS OF OUTPUT
Decreasing marginal product of labor regardless of current output level, average fixed cost will be...
ALWAYS FALLING
Decreasing marginal product of labor regardless of current output level, marginal cost will be...
ALWAYS RISING
Decreasing marginal product of labor... AVC would be...
ALWAYS RISING
If a firm wants to capitalize on economies of scale, may be able by...
ASSIGNING LIMITED TASKS TO THEIR EMPLOYEES SO THEY CAN MASTER THEM
The firm's efficient scale is the quantity of output that minimizes...
AVERAGE TOTAL COST
Marginal cost is equal to average total cost when...
AVERAGE TOTAL COST IS AT MINIMUM
When marginal cost is less than average total cost...
AVERAGE TOTAL COST IS FALLING
When a firm is operating at an efficient scale...
AVERAGE TOTAL COST IS MINIMIZED
When marginal cost exceeds average total cost...
AVERAGE TOTAL COST MUST BE RISING
Must always be true as the quantity of output increases...
AVEREAGE FIXED COST MUST FALL
Long run average total cost curves are often Ushaped...
BECAUSE INCREASING SPECIALIZATION OF WORKERS AT LOW LEVELS OF PRODUCTION AND INCREASING COORDINATION PROBLEMS AT HIGH LEVELS OF PRODUCTION
Production function is...
BETWEEN INPUTS AND QUANTITY OF OUTPUT
Harry Hotdog.. fixed cost...
BOOKKEEPING SERVICES
In reference to setting the production level a firm's cost curves...
BY THEMSELVES DO NOT TELL US WHAT DECISIONS THE FIRM WILL MAKE
Average total costs tell us...
COST OF A TYPICAL UNIT OF OUTPUT, IF TOTAL COST IS DIVIDED OVER ALL UNITS PRODUCED
When marginal cost is rising, average cost...
COULD BE RISING OR FALLING
How long does it take a firm to go from short to long?
DEPENDS ON NATURE OF THE FIRM
The length of the short run...
DIFFERENT FOR DIFFERENT FIRMS
Specialization among workers occurs when...
EACH WORKER PERFECTS ONE TASK
Accounting profit equals...
ECONOMIC + IMPLICIT
Long run average total cost decreases as the quantity of output increases...
ECONOMIES OF SCALE
Marginal cost is below average total cost.. average total cost is...
FALLING
Realistic for a firm in the short run..
FIRM VARY IN # OF WORKERS BUT NOT SIZE
Two types of total cost...
FIXED AND VARIABLE
Which is false?
IF MARGINAL COST IS RISING, AVERAGE VARIABLE COST MUST BE RISING
A production function is...
INPUTS AND QUANTITY OF OUTPUT
Total revenue...
QUANTITY SOLD TIMES PRICE
Decreasing marginal product of labor regardless of current output level... ATC will be...
U SHAPED
If a firm produces nothing, which will be zero?
VARIABLE COST
When a firm is able to put idle equipment to use by hiring another worker...
VARIABLE COST WILL RISE
Economies of scale arise when...
WORKERS ARE ABLE TO SPECIALIZE A TASK
Average total cost is very high when a small amount of output is produced because...
AVERAGE FIXED COST IS HIGH
The cost of producing the typical unit of output...
AVERAGE TOTAL COST
The cost of producing typical unit of output is the firm's...
AVERAGE TOTAL COST
Some costs do not vary with the quantity of output produced are...
FIXED COSTS
Long run average total cost curve is always...
FLATTER THAN THE SHORT-RUN AVERAGE TOTAL COST CURVE
Amount by which total cost rises when firm produces one additional output...
`MARGINAL COST