Principles of Economics Pearson Reading Quiz Ch. 8

Refer to the to graph. For a certain output range​ (or quantity of pizzas produced per​ day), marginal cost is greater than average cost. What is this output​ range? A. The output range greater than about 525 pizzas per day B. The entire output​ range, from 0 to about 640 pizzas per day C. Exactly 640 pizzas per day D. From 0 to about 525 pizzas per day Part 2 When marginal cost is less than average total​ cost, average total cost must be A. constant. B. increasing. C. decreasing. D. negative.

A. The output range greater than about 525 pizzas per day C. decreasing.

What cost measure is equal to AFC +AVC​? A. average total cost B. total variable cost C. total cost D. marginal cost Part 2 All of the following cost measures reach their minimum points when they are equal to the value of marginal​ cost, except one. Which cost measure is the​ exception? A. average fixed cost B. average total cost C. average variable cost D. There is no​ exception; all three measures above reach their minimum values when they are equal to the value of marginal cost. Part 3 As output​ increases, the vertical distance between average total cost and average variable cost curves gets​ _______ and equals​ _______. A. smaller; average fixed cost B. larger; marginal cost C. larger; average fixed cost D. smaller; total fixed cost

A. average total cost A. average fixed cost A. smaller; average fixed cost

Which of the following terms refers to the lowest cost at which a firm is able to produce a given level of output in the long​ run, when no inputs are​ fixed? A. the​ long-run average cost curve Your answer is correct. B. economies of scale C. the variable inputs curve D. the​ long-run marginal cost curve Part 2 Economies of scale happen when the​ firm's long run average total cost​ ________ as output increases. A. decreases Your answer is correct. B. remains constant C. increases D. is zero

A. the​ long-run average cost curve A. decreases

Refer to the to graph on the right. Which level of output in the graph below represents the minimum efficient​ scale? A. ​1,000 books B. 20,000 books C. 40,000 books D. 80,000 books Part 2 Which size bookstore is more likely to experience diseconomies of​ scale? A. A bookstore selling​ 1,000 books per month B. A bookstore selling​ 20,000 books per month C. A bookstore selling​ 40,000 books per month D. A bookstore selling​ 80,000 books per month

B. 20,000 books D. A bookstore selling​ 80,000 books per month

Which of the graphs above represents a typical average total cost​ curve? A. A B. B C. C D. D

B. B

The law of diminishing returns applies A. in the long run. B. in the short run. C. either in the short run or the long run. D. None of the above. Part 2 Refer to the table below. When do diminishing returns in the production of pizzas​ start? Quantity of Workers Quantity of Pizza Ovens Quantity of Pizzas Marginal Product of Labor 0 2 0 — 1 2 200 200 2 2 450 250 3 2 550 100 4 2 600 50 5 2 625 25 6 2 640 15 A. when the second worker is hired B. when the third worker is hired Your answer is correct. C. when the fourth worker is hired D. when the fifth worker is hired

B. in the short run. B. when the third worker is hired

When the marginal product of labor is greater than the average product of​ labor, then the average product of labor must be A. decreasing. B. increasing. C. constant. D. Any of the above answers is possible.

B. increasing.

Refer to the table below. Which of the following costs are implicit​ costs? Type of Cost Amount Paper $20,000 Wages 48,000 Lease payment for copy machines 10,000 Electricity ​6,000 Lease payment for store 24,000 Foregone salary 30,000 Foregone interest 3,000 Total ​141,000 A. the payments for​ paper, wages, and electricity B. the forgone salary and interest Your answer is correct C. the lease payments D. All of the above. Part 2 Which of the following are sometimes called accounting​ costs? A. explicit costs B. implicit costs C. economic costs D. total variable costs

B. the forgone salary and interest A. explicit costs

Which costs are affected by the level of output​ produced? A. sunk costs B. variable costs C. fixed costs D. all costs

B. variable costs

When a positive technological change​ occurs, A. the same output can be produced with fewer inputs. B. more output can be produced from the same inputs. C. Either​ (a) or​ (b). D. None of the above.

C. Either​ (a) or​ (b).

Refer to the table below. What is the marginal cost of producing the 200th​ pizza Quantity of Workers Quantity of Pizzas Marginal Product of Labor Total Cost of Pizzas 0 0 — ​$800 1 200 200 1,450 2 450 250 2,100 3 550 100 2,750 4 600 50 3,400 5 625 25 4,050 6 640 15 ​4,700 A. ​$2.60 B. $650.00 C. $0.00 D. $3.25

D. $3.25

Refer to the to graph on the right. From the origin up until point ​A, A. output increases at a constant rate. B. the effect of diminishing returns is greater than the effect of specialization. C. output increases at a decreasing rate. D. output increases at an increasing rate. Part 2 From point A up until point ​B, A. output increases at a constant rate. B. output decreases. C. output increases at a decreasing rate. D. output increases at an increasing rate.

D. output increases at an increasing rate. C. output increases at a decreasing rate.

The relationship between the inputs employed by a firm and the maximum output it can produce with those inputs is called the A. budget constraint. B. utility curve. C. consumption function. D. production function.

D. production function.

The GPA you earn in a particular semester is your​ ________ GPA, and your cumulative GPA for all completed semesters is your​ ________ GPA. A. total; marginal B. average; marginal C. ​average; total D. ​marginal; average

D. ​marginal; average