econ exam (2 part 2)
Diminishing marginal product suggests that additional units of output become less costly as more output is produced.
false
Diminishing marginal product suggests that the marginal cost of an extra worker is unchanged.
false
Diseconomies of scale occur when average fixed costs are falling.
false
Economies of scale arise when an economy is selfsufficient in production.
false
Economies of scale occur when longrun average total costs rise as output increases.
false
At all levels of production beyond the point where the marginal cost curve crosses the average variable cost curve, average variable cost rises.
true
In reference to setting the production level, a firm's cost curves by themselves do not tell us what decisions the firm will make
true
In the long run, a firm that produces and sells computers gets to choose how many workers to hire, the size of its factories, and which shortrun averagetotalcost curve to use
true
The average fixed cost curve always declines with increased levels of output.
true
The cost of producing an additional unit of output is the firm's marginal cost.
true
The firm's efficient scale is the quantity of output that minimizes average total cost.
true
The length of the short run is different for different types of firms.
true
The longrun average total cost curve is always flatter than the shortrun average total cost curve, but not necessarily horizontal
true
The marginal cost curve crosses the average total cost curve at the efficient scale
true
The marginal cost of the fifth unit of output equals the total cost of five units minus the total cost of four units.
true
Total cost can be divided into two types. Those two types are fixed costs and variable costs.
true
When a firm is able to put idle equipment to use by hiring another worker, variable costs will rise.
true
When, for a firm, longrun average total cost decreases as the quantity of output increases, we have a situation of economies of scale.
true
. If a firm wants to capitalize on economies of scale, it may be able to do so by assigning limited tasks to their employees, so they can master those tasks.
true
Average total cost is increasing whenever total cost is increasing.
false
Average total cost is very high when a small amount of output is produced because average variable cost is high.
false
Average total cost tells us the total cost of the first unit of output, if total cost is divided evenly over all the units produced.
false
Constant returns to scale occur when longrun total costs are constant as output increases.
false
"Constant returns to scale" refers to a situation in which, for a firm, all of the firm's shortrun average total cost curves are horizontal.
false
. In the long run, inputs that were fixed in the short run remain fixed.
false
. One of the most important properties of cost curves is that for most producers , the average total cost curve never crosses the marginal cost curve.
false
. Specialization among workers occurs when quality management allows workers to switch from one task to another.
false
Harry's Hotdogs is a small street vendor business owned by Harry Huggins. Harry is trying to get a better understanding of his costs by categorizing them as fixed or variable. The cost of mustard are most likely to be considered fixed costs.
false
If marginal cost is below average total cost, then average total cost is constant.
false
If marginal cost is rising, average variable cost must be falling.
false
It takes a firm six months to go from the short run to the long run.
false
Longrun average total cost curves are often Ushaped for the same reasons that average total cost curves are often u-shaped
false
Marginal cost is equal to average total cost when average variable cost is falling.
false
Marginal cost must rise as the quantity of output increases.
false
Marginal cost tells us the value of all resources used in a production process.
false
Some costs do not vary with the quantity of output produced. Those costs are called marginal costs.
false
The amount by which total cost rises when the firm produces one additional unit of output is called average cost.
false
The efficient scale of the firm is the quantity of output that maximizes marginal product.
false
Variable cost divided by quantity produced is average total cost.
false
When a factory is operating in the short run, it cannot alter variable costs.
false
When a firm is operating at an efficient scale, average variable cost is minimized.
false
When marginal cost exceeds average total cost, average fixed cost must be rising.
false
When marginal cost is less than average total cost, average total cost is rising.
false
When marginal cost is less than average total cost, marginal cost must be falling.
false
When marginal cost is rising, average variable cost must be rising.
false