The Production Process

The average/marginal rule shows us which of the following?

As long as the marginal product curve is above the average product curve, average product is increasing. When marginal product is below the average product curve, average product is decreasing.

When marginal product is positive but the firm experiences diminishing marginal returns, the total product curve does which of the following?

Increases at a decreasing rate

Which of the following is the increase in output that is caused by hiring one more worker?

Marginal product

Which of the following happens when the total product curve is decreasing?

Marginal product of labor is less than zero

Which of the following occurs when an input experiences diminishing returns?

Some inputs are variable and some inputs are fixed

In the short run, which of the following is true?

Some inputs are variable and some inputs are fixed.

The term diminishing returns means which of the following?

That there is a decrease in additional output because of the use of an extra unit of variable input, other things being equal.

Dis-economies of scale occur because of which of the following?

The issues experienced in managing a large business

Diminishing returns occur when a company increases production by increasing variable inputs with at least one fixed input. Which of the following is the reason this occurs?

When more variable inputs are used, the amount of the fixed input per variable input declines.

The total product curve _______________.

becomes flatter as output increases, assuming that a variable input has diminishing returns

The ____________ is the time period in which at least one input is fixed.

short run