Microeconomics - chpt 7 - 2020

If Veronica is producing where she is facing diminishing marginal returns, then the marginal costs will be:

constant. equal to average total cost. increasing. (A) decreasing.

Choosing the best process or method to produce a good falls under which category of the factors of production?

entrepreneurship technology (A) natural resources labor

________________________ arises where many firms are competing in a market to sell similar but differentiated products.

Perfect competition Monogopolised competition Monopolistic competition (A) Oligopolistic competition

____________________________ occur when the marginal gain in output diminishes as each additional unit of input is added.

Diminishing marginal costs Diminishing marginal returns (A) Diminishing variable returns Diminishing average returns

The graph above illustrates the total cost function for GoodieCookie Co. How are the company's fixed costs represented in this graph?

by adding up the variable costs at any vertical axis point where the total cost curve never equals zero by adding up the fixed costs as the point where the total cost curve touches the vertical axis (A)

The marginal cost curve is generally ______________, because diminishing marginal returns implies that additional units are ________________________.

downward-sloping; more costly to produce upward-sloping; more costly to produce (A) downward-sloping; less costly to produce upward-sloping; less costly to produce

When __________________ exist, doubling of all inputs will result in more than doubling output, which means __________________________________________.

economies of scale; a larger factory can produce at a lower average cost than a smaller company. (A) low labor inputs; larger scale of production leads to higher costs. labor inputs; economies-of-scale curve is U-shaped. economies of scale; a smaller factory can produce at a lower average cost than a larger company.

Where diseconomies of scale are present, the long run average cost curve will be

horizontal vertical upward sloping (A) downward sloping

At the current level of output, Becca Furniture's marginal cost curve is above the average total cost curve. This means Becca Furniture's average total cost curve:

must be falling. must be flat. may be rising, falling, or flat depending on other things. must be rising. (A)

Wood falls into which category of factors of production?

natural resources (A) technology labor capital

Refer to the diagram above. Based on the information illustrated in the graph, which of the following is correct?

producing a marginal unit is reducing average costs overall the transition point between where MC is pulling down and pulling up AC always occurs at the minimum point of the AC curve (A) low marginal costs first pull up the overall average costs the marginal cost of production for producing an additional unit is below the cost for producing the earlier units

(Figure: Long-Run and Short-Run Average Cost Curves) Look at the figure Long-Run and Short-Run Average Cost Curves. If a firm is producing at point C on the ATC2 but anticipates increasing output to 225,000 units in the long run, the firm will build a _____ plant and have _____ of scale.

smaller; diseconomies bigger; economies smaller; economies bigger; diseconomies (A)

Ryan is a student at a community college. Which of the following is NOT an explicit cost of Ryan attending community college?

tuition the salary that she could have earned working full-time (A) textbooks computer lab fees

A ______ cost is the cost of inputs that increase or decrease with production.

marginal fixed variable (A) absolute

The Law of Diminishing Marginal Product says that in the short-run, the marginal product __________ at first, but sooner or later additional workers will have a __________ marginal product.

increases, decreasing effect on (A) decreases, positive effect on is constant, positive effect on decreases, small positive effect

The table below sets out cost information for the production of volley balls. Some values are missing. Which of the following statements is correct?

A = 42, F = 13 (A) A = 70; F = 50 A = 70; E = 13 A = 42; F = 50

_____________________ help to explain why every economy, as it develops, has an increasing proportion of its population living in urban areas.

Agglomeration factors (A) Economies of scale Diseconomies of scale Constant returns to scale

Suppose that ATC curve represents your Grade Point Average in college. Let MC curve represent your marginal grade. Which of the following is true?

If your GPA=2.00, and the grade in your next course is C- (1.67), your GPA will remain unchanged. If your GPA=3.00, and the grade in your next course is B+ (3.33), your GPA will increase. (A) If your GPA=3.00, and the grade in your next course is A (4:00), your GPA will decrease. If your GPA=2.00, and the grade in your next course is B (3.00), your GPA will decrease.

An entrepreneur decided to leave a job that pays $50,000 a year to start a business. These lost wages would be considered ______________ .

accounting profit economic profit an explicit cost an implicit cost (A)

Which of the following should typically be ignored because spending has already been made and cannot be changed?

average marginal costs variable costs marginal costs sunk costs (A)

______, also known as profit margin, is the profit divided by quantity produced, or average revenue minus average cost.

average revenue total revenue total profit average profit (A)

(Figure: Short-Run Costs) Look at the figure Short-Run Costs. C is the _____ cost curve.

average total total average variable (A) marginal

The marginal cost curve crosses the ________________ at its lowest point.

average total cost curve (A) average marginal cost curve average fixed cost curve variable cost curve

______ is the total revenue minus total costs.

income profit (A) production cost revenue

A firm was producing 20,000 units of output at the total cost of $40,000. It now produces 30,000 units and the corresponding total cost is $50,000. This firm is experiencing ____________________.

none of the others constant returns to scale diseconomies of scale economies of scale (A)

Variable inputs refer to __________ that can easily be increase or decreased in a __________ period.

outputs, short inputs, short (A) outputs, long inputs, long

Which of the following is an example of a fixed input?

the ingredients needed to make sandwiches a leased store front for a sandwich shop (A) electricity used in the sandwich shop a part-time sandwich maker

The sum of the fixed plus variable costs is known as _________.

variable cost absolute cost total cost (A) marginal cost