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"If the marginal product of labor curve slopes downward, then the average product of labor curve necessarily must slope downward." Explain whether the previous statement is correct or incorrect?

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The statement is incorrect. The relation...

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-When long-run average cost remains constant as output increases there are constant A) marginal returns. B) returns to scale. C) economies of scale. D) diseconomies of scale. -When long-run average cost remains constant as output increases there are constant


A) marginal returns.
B) returns to scale.
C) economies of scale.
D) diseconomies of scale.

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-In the above figure, between 20 and 25 units per hour, the firm experiences A) economies of scale. B) diseconomies of scale. C) constant returns to scale. D) increasing total fixed costs. -In the above figure, between 20 and 25 units per hour, the firm experiences


A) economies of scale.
B) diseconomies of scale.
C) constant returns to scale.
D) increasing total fixed costs.

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What are economies of scale? What is the main source of economies of scale?

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Economies of scale are when a firm incre...

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Which of the following shifts the AVC curve upward at Barney's Bagel Bakery?


A) an increase in the hourly wage that Barney pays his workers
B) an increase in Barney's daily output from hiring more workers
C) an increase in the fixed amount of local property tax that Barney pays on the building he owns and uses
D) all of the above

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The term "fixed cost" refers to the cost a firm incurs to produce a specific fixed quantity of output.

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-The average total cost curves for plants A, B, C and D are shown in the above figure. Which plant is best to use to produce 20 units per day? A) plant A B) plant B C) plant C D) plant D -The average total cost curves for plants A, B, C and D are shown in the above figure. Which plant is best to use to produce 20 units per day?


A) plant A
B) plant B
C) plant C
D) plant D

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Output (pizzas per day) Output (pizzas per day) -Tony's Pizza's production function is shown in the table above. Tony currently operates Plant 2. He hires workers at a wage rate of $50 a day and his total fixed cost is $150. a) Calculate Tony's Pizza's total variable cost and total cost for each output level. b) Calculate the marginal costs. c) Calculate the average fixed costs, average variable costs, and average total costs. d) Suppose that total fixed cost increases to $200. Explain what changes occur in the costs. -Tony's Pizza's production function is shown in the table above. Tony currently operates Plant 2. He hires workers at a wage rate of $50 a day and his total fixed cost is $150. a) Calculate Tony's Pizza's total variable cost and total cost for each output level. b) Calculate the marginal costs. c) Calculate the average fixed costs, average variable costs, and average total costs. d) Suppose that total fixed cost increases to $200. Explain what changes occur in the costs.

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blured image a) The total variable cost and total co...

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-In the figure above, the marginal product of the second worker is A) 10 units. B) 5 units. C) 2 units. D) 1 units. -In the figure above, the marginal product of the second worker is


A) 10 units.
B) 5 units.
C) 2 units.
D) 1 units.

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Total variable cost


A) increases as output increases.
B) does not change as output changes.
C) decreases as output increases.
D) initially decreases and then increases as output increases.

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-The above table shows the short-run total product schedule for the campus book store. What is the average product (AP) of the 4th employee? A) 58 books sold B) 14.5 books sold C) 18 books sold D) 13.3 books sold -The above table shows the short-run total product schedule for the campus book store. What is the average product (AP) of the 4th employee?


A) 58 books sold
B) 14.5 books sold
C) 18 books sold
D) 13.3 books sold

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A firm's long run cost is the cost of production when the firm


A) calculates its cost at least one year into the future.
B) adds together all of its short run costs.
C) uses the economically efficient quantities for its plant and its labor.
D) can vary the amount of output it produces.

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The marginal product of labor is equal to the


A) total product divided by the total number of workers hired.
B) increase in the total product that results from hiring one more worker with all other inputs remaining the same.
C) slope of the marginal product of labor curve.
D) None of the above answers are correct.

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The law of diminishing returns occurs because


A) the marginal product of an additional worker is greater than the marginal product of the previous worker.
B) the marginal product of a variable input, such as labor, depends in part on the amount of fixed inputs, such as capital.
C) total production decreases as more of the variable inputs are used.
D) adding more and more workers leads to a decrease in the quantity of capital.

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-The table above gives a firm's total product schedule. Suppose labor is the only variable factor of production. The price of labor is $500 per week and total fixed costs are $600 per week. What is the total cost of producing 70 units? A) $1,700 B) $1,900 C) $2,100 D) $2,300 -The table above gives a firm's total product schedule. Suppose labor is the only variable factor of production. The price of labor is $500 per week and total fixed costs are $600 per week. What is the total cost of producing 70 units?


A) $1,700
B) $1,900
C) $2,100
D) $2,300

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A company could produce 100 units of a good for $320 or produce 101 units of the same good for $324. The $4 difference in costs is


A) the marginal benefit of producing the 101st unit.
B) the marginal cost of producing the 101st unit.
C) both the marginal benefit and the marginal cost of producing the 101st unit.
D) neither the marginal benefit nor the marginal cost of producing the 101st unit.

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If average variable cost is decreasing as output increases, then marginal cost is definitely


A) decreasing as output increases.
B) increasing as output increases.
C) less than average variable cost.
D) greater than average variable cost.

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-Silvio's Pizza is a small pizzeria. The firm's production function is shown in the table above. Suppose that Silvio's costs include only the cost of renting ovens, which is $100 per oven per week, the labor cost, $280 per worker per week, and the opportunity cost of Silvio's entrepreneurship, $1,000 per week. Suppose Silvio's uses Plant 2. If Silvio hires the 4th worker, the firm will experience ________ marginal returns. A) diminishing B) increasing C) constant D) zero -Silvio's Pizza is a small pizzeria. The firm's production function is shown in the table above. Suppose that Silvio's costs include only the cost of renting ovens, which is $100 per oven per week, the labor cost, $280 per worker per week, and the opportunity cost of Silvio's entrepreneurship, $1,000 per week. Suppose Silvio's uses Plant 2. If Silvio hires the 4th worker, the firm will experience ________ marginal returns.


A) diminishing
B) increasing
C) constant
D) zero

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Diminishing marginal returns occurs when


A) all inputs are increased and output decreases.
B) all inputs are increased and output increases by a smaller proportion.
C) a variable input is increased and output decreases.
D) a variable unit is increased and its marginal product falls.

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When the marginal product of labor exceeds the average product of labor


A) the average product of labor is increasing.
B) the average product of labor is decreasing.
C) the total product curve is negatively sloped.
D) the firm is experiencing decreasing returns to scale.

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