ECON CHAPTER 7 QUIZ

Approximately what percentage of the US labor force is employed by firms that have fewer than 100 employees A) 63 B) 50 C) 45 D) 35

C) 45

In microeconomics, the term _____ is synonymous with economies of scale A) diminishing marginal returns B) increasing returns to scale C) decreasing returns to scale D) constant returns to scale

B) increasing returns to scale

In order to determine the average variable cost, the firm's variable costs are divided by _____ A) its fixed costs B) the quantity of output C) its average costs D) diminishing marginal costs

B) the quantity of output

The _____ of all firms can be broken down into some common underlying patterns A) total revenue B) diminishing short-run costs C) cost structure D) diminishing long-run costs

C) cost structure

In microeconomics, the term _____ is synonymous with decreasing returns of scale. A) monopoly B) economies of scale C) diminishing returns D) diseconomies of scale

D) diseconomies of scale

The term _____ is used to describe the additional cost of producing one more unit. A) average cost B) fixed cost C) variable cost D) marginal cost

D) marginal cost

The term _____ describes a situation where the quantity of output rises, but the average cost of production falls. A) diminishing marginal returns B) marginal cost output C) economies of scale D) diseconomies of scale

C) economies of scale

_____ arises where many firms are competing in a market to sell similar but different products. A) oligopolistic competition B) perfect competition C) monopolistic competition D) monogopolized competition

C) monopolistic competition

_____ include all spending on labor, machinery, tools, and supplies purchased from other firms. A) total profits B) total revenues C) total costs D) total profit margins

C) total costs

If a firm is experiencing _____, then as the quantity of output rises, the average cost of production rises. A) decreasing returns to scale B) consent returns to scale C) economies of scale D) increasing returns to scale

A) decreasing returns to scale

In economics, a firm that faces no competitors is referred to as _________________. A) an oligopoly B) a monopoly C) a perfect competitor D) an oligopolizor

B) a monopoly

_____ include all of the costs of production that increase with the quantity produced. A) fixed costs B) variable costs C) average costs D) average variable costs

B) variable costs

_____ occur when the marginal gain in output diminished as each additional unit of input is added. A) diminishing variable returns B) diminishing average returns C) diminishing marginal returns D) diminishing marginal costs

C) diminishing marginal returns

A firms _____ consist of expenditures that must be made before production starts that typically, over the short run, _____ regardless of the level of production. A) fixed costs; do not change B) variable costs; are constantly changing C) fixed costs; are constantly changing D) variable costs; do not change

A) fixed costs; do not change

In order to reduce the harmful affects of recession and carbon emissions, the government provided tax incentives for manufacturing firm's to ___________________ that provide alternative, more efficient methods of combining inputs to produce output. A) acquire energy efficient production technology B) increase the returns of scale C) maintain constant returns of scale D) create perfect competition between firms

A) acquire energy efficient production technology

According to the definition of profit, if a profit-maximizing firm will always attempt to produce its desired level of output at the lowest possible cost, then it will A) do so regardless of what type of competition exists in a market B) take a lone-run perspective on costs, when such costs cannot be adjusted C) take a short-run perspective on labor costs which cannot be immediately changes D) breakdown its cost structure according to short-run adjustments

A) do so regardless of what type of competition exists in a market

_____ is calculated by taking the quantity of everything that is sold and multiplying It by the sale price. A) total revenue B) total profits C) average profit margin D) total cost

A) total revenue

The term "constant returns to scale" describes a situation where A) expanding all inputs does not change the average cost of production B) a larger- scale firm can produce at a lower cost than a smaller- scale firm C) expanding all inputs changes the average cost of production D) the quantity of output rises and the average cost of production falls

B) a larger- scale firm can produce at a lower cost than a smaller- scale firm

In order to determine _____, the firm's total costs must be divided by the quantity of its output. A) diminishing marginal returns B) fixed costs C) variable costs D) average costs

D) average costs