micro quiz 7

total cost divided by the quantity of output produced

average total cost is

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

is a curve that shows a firm's cost-minimizing combination of inputs for every level of output, holding input prices constant

A firm's expansion path

combinations of two inputs that result in the same total cost for a firm

An isocost line shows

for more than 4 units of labor

Fancy Footwear manufactures shoes. Figure 11-3 shows Fancy Footwear's marginal product of labor and average product of labor curves in the short run. 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.

Fancy Footwear manufactures shoes. Figure 11-3 shows Fancy Footwear's marginal product of labor and average product of labor curves in the short run. Refer to Figure 11-3. Which of the following statements correctly describes the curves in the figure?

$2000

Figure 11-7 shows the cost structure for a firm. Refer to Figure 11-7. When output level is 100, what is the total cost of production?

$8

Figure 11-7 shows the cost structure for a firm. Refer to Figure 11-7. When the output level is 100 units average fixed cost is

operating in the short run

If a producer is not able to expand its plant capacity immediately, it is

marginal costs can be either increasing or decreasing

If the average variable cost curve is above the marginal cost curve, then

average variable cost is decreasing

If the marginal cost curve is below the average variable cost curve, then

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 division of labor and specialization

Increases in the marginal product of labor result from

change in total cost divided by the change in output

Marginal cost is equal to the

the 2nd worker is hired

Refer to Figure 11-1. Diminishing marginal productivity sets in after

17

Refer to Figure 11-1. The average product of the 4th worker is

15

Refer to Figure 11-1. The marginal product of the 3rd worker is

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.

3rd

Table 11-1 shows the technology of production at the Matsuko's Mushroom Farm for the month of May. Refer to Table 11-1. Diminishing marginal returns sets in when the ________ worker is hired.

10.8 pounds

Table 11-1 shows the technology of production at the Matsuko's Mushroom Farm for the month of May. Refer to Table 11-1. What is the average product of labor when the farm hires 5 workers?

5 pounds

Table 11-1 shows the technology of production at the Matsuko's Mushroom Farm for the month of May. 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

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 rent from building owned and used by Company X

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

additional cost of producing an additional unit of output

marginal product of labor

the change in output that a firm produces as a result of hiring one more worker

the maximum output that can be produced from a set of inputs

the production function shows

The minimum efficient scale

the smallest level of operation where long-run average costs are lowest