Microeconomics HW 7

Question 13 1 / 1 pts Figure 11-1 Refer to Figure 11-1. The marginal product of the 3rd worker is 57. 19. 15. 11.

15

Question 10 1 / 1 pts If four workers can produce 18 chairs a day and five can produce 20 chairs a day, the marginal product of the fifth worker is 2 chairs. 3 chairs. 4 chairs. 38 chairs.

2 chairs.

Question 29 1 / 1 pts Which of the following equations is correct? AFC + AVC = ATC AVC - ATC = AFC AVC + ATC = AFC ATC + AVC = AFC

AFC + AVC = ATC

Question 18 1 / 1 pts In the short run, if marginal product is at its maximum, then total cost is at its maximum. average cost is at its minimum. average variable cost is at its minimum. marginal cost is at its minimum.

marginal cost is at its minimum.

Question 5 1 / 1 pts If a producer is not able to expand its plant capacity immediately, it is operating in the long run. bankrupt. operating in the short run. losing money.

operating in the short run

Question 24 1 / 1 pts Figure 11-7 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? $20 $1,000 $1,200 $2,000

$2,000

Question 23 1 / 1 pts Figure 11-7 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 $10. $8. $5. This cannot be determined from the diagram.

$8.

Question 30 1 / 1 pts Figure 11-5 Refer to Figure 11-5. Identify the curves in the diagram. E = marginal cost curve F = total cost curve G = variable cost curve, H = average fixed cost curve E = marginal cost curve F = average total cost curve G = average variable cost curve H = average fixed cost curve. E = average fixed cost curve F = variable cost curve G = total cost curve, H = marginal cost curve E = average fixed cost curve F = average total cost curve G = average variable cost curve, H = marginal cost curve

E = marginal cost curve F = average total cost curve G = average variable cost curve H = average fixed cost curve.

Question 28 1 / 1 pts Figure 11-10 Refer to Figure 11-10. Suppose for the past 8 years the firm has been producing Qd units per period using plant size ATC4. Now, following a permanent change in demand, it plans to cut production to Qc units. What will happen to its average cost of production? In the short run, its average cost falls from $47 to $37, and in the long run, average cost rises to $41. In the short run, its average cost rises from $47 to $55, and in the long run, average cost falls to $41. In the short run, its average cost rises from $47 to $55, and in the long run, average cost falls to $37. In the short run, its average cost falls from $47 to $41, and in the long run, average cost falls even further to $37.

In the short run, its average cost rises from $47 to $55, and in the long run, average cost falls to $41.

Question 7 1 / 1 pts Which of the following statements best describes the economic short run? It is a period during which fixed inputs become variable inputs because of depreciation. It is a period of one year or less. It is a period during which at least one of the firm's inputs is fixed. It is a period during which firms are free to vary all of their inputs.

It is a period during which at least one of the firm's inputs is fixed.

Question 15 1 / 1 pts Table 11-3 Quantity of Workers

Quantity of Boxes Marginal Product of Labor Average Product of Labor 0 0 ----- ----- 1 50 2 200 3 240 4 264 5 284 Refer to Table 11-3. The table above refers to the relationship between the quantity of workers employed and the number of cardboard boxes produced per day by Manny's House of Boxes. The capital used to produce the boxes is fixed. Diminishing returns to labor are first observed in this example after Manny hires the ________ worker. second third fourth fifth third

Question 8 1 / 1 pts In the long run which of the following is true? There are no fixed costs. The size of a firm's physical plant can be changed but the firm cannot adopt new technology. The firm can vary its explicit costs but not its implicit costs. Total cost = fixed cost + variable cost.

There are no fixed costs.

Question 4 1 / 1 pts Which of the following is a factor of production that generally is fixed in the short run? raw materials labor water a factory building

a factory building

Question 17 1 / 1 pts Marginal cost is the change in the price of inputs if a firm buys more inputs to produce an additional unit of output. the additional output when total cost is increased by one dollar. change in average cost when an additional unit of output is produced. additional cost of producing an additional unit of output.

additional cost of producing an additional unit of output.

Question 3 1 / 1 pts A characteristic of the long run is plant capacity cannot be increased or decreased. there are fixed inputs. all inputs can be varied. there are both fixed and variable inputs

all inputs can be varied.

Question 21 1 / 1 pts Figure 11-5 Refer to Figure 11-5. Curve G approaches curve F because fixed cost falls as capacity rises. total cost falls as more and more is produced. marginal cost is above average variable costs. average fixed cost falls as output rises.

average fixed cost falls as output rises.

Question 20 1 / 1 pts Figure 11-5 Refer to Figure 11-5. The vertical difference between curves F and G measures sunk costs. fixed costs. marginal costs. average fixed costs.

average fixed costs.

Question 22 1 / 1 pts If the marginal cost curve is below the average variable cost curve, then average variable cost is decreasing. marginal cost must be decreasing. average variable cost could either be increasing or decreasing. average variable cost is increasing.

average variable cost is decreasing.

Question 16 1 / 1 pts Marginal cost is equal to the change in average product divided by the change in output. change in average total costs divided by the change in output. change in total product divided by the change in output. change in total cost divided by the change in output.

change in total cost divided by the change in output.

Question 27 1 / 1 pts When a firm's long-run average cost curve is horizontal for a range of output, then that range of production displays constant returns to scale. decreasing returns to scale. constant average fixed costs. increasing returns to scale.

constant returns to scale.

Question 25 1 / 1 pts If, when a firm doubles all its inputs, its average cost of production decreases, then production displays declining fixed costs. economies of scale. diseconomies of scale. diminishing returns.

economies of scale.

Question 12 1 / 1 pts As a firm hires more labor in the short run, the extra output of another worker may rise at first, but eventually must fall. output per worker rises. level of total product stays constant. costs of production are increasing at a fixed rate per unit of output.

extra output of another worker may rise at first, but eventually must fall.

Question 19 1 / 1 pts Average fixed costs of production will rise at a fixed rate as more is produced. graph as a U-shaped curve. fall as long as output is increased. remain constant.

fall as long as output is increased.

Question 1 1 / 1 pts The difference between technology and technological change is that technology is product-centered, that is, developing new products with our limited resources while technological change is process-centered in that it focuses on developing new production techniques. technology is carried out by firms producing physical goods but technological change is an intellectual exercise into seeking ways to improve production. technology involves the use of capital equipment while technological change requires the use of brain power. technology refers to the processes used by a firm to transform inputs into output while technological change is a change in a firm's ability to produce a given level of output with a given quantity of inputs.

technology refers to the processes used by a firm to transform inputs into output while technological change is a change in a firm's ability to produce a given level of output with a given quantity of inputs.

Question 2 1 / 1 pts The processes a firm uses to turn inputs into outputs of goods and services is called marginal analysis. technology. technological change. positive economic analysis.

technology.

Question 11 1 / 1 pts The law of diminishing marginal returns states that in the presence of a fixed factor, at some point average product of labor starts to fall as more and more variable inputs are added. average total costs of production initially fall and after some point starts to rise at a decreasing rate as output increases. that at some point, adding more of a fixed input to a given amount of variable inputs will cause the marginal product of the variable input to decline. that at some point, adding more of a variable input to a given amount of a fixed input will cause the marginal product of the variable input to decline.

that at some point, adding more of a variable input to a given amount of a fixed input will cause the marginal product of the variable input to decline.

Question 14 1 / 1 pts Figure 11-1 Refer to Figure 11-1. Diminishing marginal productivity sets in after the 2nd worker is hired. the 3rd worker is hired. the 4th worker is hired. the 5th worker is hired.

the 2nd worker is hired.

Question 9 1 / 1 pts The marginal product of labor is defined as the additional sales revenue that results when one more worker is hired. the cost of hiring one more worker. the additional number of workers required to produce one more unit of output. the additional output that results when one more worker is hired, holding all other resources constant.

the additional output that results when one more worker is hired, holding all other resources constant.

Question 26 1 / 1 pts At the minimum efficient scale all possible economies of scale have not been exhausted. the firm has achieved the lowest possible average cost of production. marginal cost is at its minimum. any increases in the scale of operation will encounter further economies of scale.

the firm has achieved the lowest possible average cost of production.

Question 6 1 / 1 pts Implicit costs can be defined as the non-monetary opportunity cost of using the firm's own resources. total cost minus fixed costs. accounting profit minus explicit cost. the deferred cost of production.

the non-monetary opportunity cost of using the firm's own resources.