Question 1

If there are diminishing marginal returns to labor,

Accepted Answer

A)  output diminishes as additional workers are added
B)  the management team grows as more workers are hired
C)  the rise in output becomes smaller and smaller with each successive worker hired
D)  the management team shrinks as successive workers are added
E)  macroeconomic business cycles are generated by microeconomic production functions

Question 2

If a firm is experiencing diminishing marginal returns to labor,then

Accepted Answer

A)  total output must be decreasing
B)  total output rises more slowly as additional workers are added
C)  the firm must decrease the amount of labor it hires
D)  total output per worker must be rising
E)  the firm must be operating in the long run

Question 3

In the long run,

Accepted Answer

A)  at least one of the firm's inputs is fixed
B)  customer tastes and preferences are fixed
C)  the firm may vary all inputs
D)  sunk costs become variable costs
E)  government intervention is inevitable

Question 4

Assume that an industry requires a very specialized technology that involves high start-up costs for new firms no matter what level of output they produce.In the long run,at low levels of output,these firms will tend to exhibit

Accepted Answer

A)  diminishing marginal returns
B)  increasing marginal returns
C)  diseconomies of scale
D)  constant returns to scale
E)  economies of scale

Question 5

Variable inputs are those whose

Accepted Answer

A)  quantity changes as the level of output changes
B)  costs are irreversible
C)  quantity remains constant regardless of the level of output
D)  costs are considered sunk costs
E)  price is continuously changing

Question 6

-Figure 7-7 shows a firm's total variable cost for different daily output levels.In addition,the firm has total fixed cost of $50 per day.If output increases from 20 to 30 units,average total cost rises from

Accepted Answer

A)  $17.50 to $19.17,and marginal cost is $225.00
B)  $400 to $625,and marginal cost is $225.00
C)  $15.00 to $22.50,and marginal cost is $22.50
D)  $20.00 to $20.83,and marginal cost is $22.50
E)  $20.00 to $20.83,and marginal cost is $225.00

Question 7

Which of the following,necessarily,equals zero when the firm's short-run output level is zero?

Accepted Answer

A)  sunk costs
B)  fixed costs
C)  implicit costs
D)  variable costs
E)  opportunity costs

Exam 7: Production and Cost

-Figure 7-7 shows a firm's total variable cost for different daily output levels.In addition,the firm has total fixed cost of $50 per day.If output increases from 20 to 30 units,average total cost rises from

Correct Answer
verified

In the long run,

Correct Answer
verified

If there are diminishing marginal returns to labor,

Correct Answer
verified

Variable inputs are those whose

Correct Answer
verified

Assume that an industry requires a very specialized technology that involves high start-up costs for new firms no matter what level of output they produce.In the long run,at low levels of output,these firms will tend to exhibit

Correct Answer
verified

Which of the following,necessarily,equals zero when the firm's short-run output level is zero?

Correct Answer
verified

If a firm is experiencing diminishing marginal returns to labor,then

Correct Answer
verified

Exam 7: Production and Cost

-Figure 7-7 shows a firm's total variable cost for different daily output levels.In addition,the firm has total fixed cost of $50 per day.If output increases from 20 to 30 units,average total cost rises from

Correct AnswerverifiedShow Answer

In the long run,

Correct AnswerverifiedShow Answer

If there are diminishing marginal returns to labor,

Correct AnswerverifiedShow Answer

Variable inputs are those whose

Correct AnswerverifiedShow Answer

Assume that an industry requires a very specialized technology that involves high start-up costs for new firms no matter what level of output they produce.In the long run,at low levels of output,these firms will tend to exhibit

Correct AnswerverifiedShow Answer

Which of the following,necessarily,equals zero when the firm's short-run output level is zero?

Correct AnswerverifiedShow Answer

If a firm is experiencing diminishing marginal returns to labor,then

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified