Econ quiz 7
Which of the following is most likely to be a fixed cost
Property insurance premiums
fixed cost is:
any cost which does not change when the firm changes its output
which of the following best expresses the law of diminishing returns
as successive amounts of one resource(labor) are added to fixed amounts of other resources (property) beyond some point the resulting extra output will decline
the short run is characterized by
at least one fixed resource
for most producing firms:
average total costs decline as output is carried to a certain level, and then begin to rise
marginal cost is the
change in total cost that results from producing one more unit of output
Marginal Cost
equals both average variable cost and average total cost at their respective minimums
if a firm decides to produce no output in the short run, its costs will be:
its fixed costs
which of the following is correct as it relates to cost curves
marginal cost intersects average total cost at the latter's minimum point
if in the short run a firms total product is increasing, then its
marginal product could be either increasing or decreasing
the first, second and third workers employed by a firm add 24,18, and 9 units to total product respectively. Therefore the:
marginal product of the third worker is 9
Which of the following is correct
marginal product rises faster than average product and also falls faster than average product
in the above diagram curves 1, 2, and 3 represent the:
marginal, average, and total product curves respectively
marginal product
may initially increase, then diminish, and ultimately become negative
The Law of diminishing returns describe the:u
relationship between resource inputs and product outputs in the short run
Refer to the above data, the marginal product of the 6th worker is
15 units of output
refer to the above data. Average Product is at a maximum when:
2 workers are hired
the total output of a firm will be at a maximum where:
MP is Zero
Other things equal, if the prices of a firms variable inputs were to fall
Marginal Cost, Average variable cost, and average total cost would all fall
Refer to the above diagram. At output level Q total variable cost is:
Obeq
which of the following statements concerning the relationships between total product, average product, and marginal product is not correct
AP continues to rise so long as tp is rising
the law of diminishing returns indicate that
As extra units of a variable resource are added to a fixed resource, marginal product will decline beyond some point
the law of diminishing returns result in
a total product curve that eventually increases at a decreasing rate
If you operated a small bakery which of the following would be a variable cost in the short run?
baking supplies (flour, salt, etc.)
average fixed cost
declines continually as output increases
If a variable is added to some fixed input, beyond some point the resulting extra output will decline. This statement describes
the Law of diminishing returns
the long run is characterized by
the ability of the firm to change its plant size
Marginal product is:
the increase in total output attributable to the employment of one ore worker
the above diagram suggests that
when marginal product lies above average product, average product is rising
which of the following is not correct
where total product is at maximum, average product is also at maximum