question
The text lists all of the following as outcomes of McDonald's experimental adoption of remote order taking except:
a. increased speed at the drive through window.
b. an increase in the costs associated with the drive-through portion of McDonald's business.
c. employee dissatisfaction with constant monitoring and the stress of the process.
d. a decrease in accuracy in filling orders.
a. increased speed at the drive through window.
b. an increase in the costs associated with the drive-through portion of McDonald's business.
c. employee dissatisfaction with constant monitoring and the stress of the process.
d. a decrease in accuracy in filling orders.
answer
b. an increase in the costs associated with the drive-through portion of McDonald's business.
question
A firm's production function is the relationship between:
a. the demand for a firm's output and the quantity it is able to produce with available resources.
b. the factors of production and the resulting outputs of the production process.
c. the inputs employed by the firm and the resulting costs of production.
d. the firm's production costs and the amount of revenue it receives from the sale of its output.
a. the demand for a firm's output and the quantity it is able to produce with available resources.
b. the factors of production and the resulting outputs of the production process.
c. the inputs employed by the firm and the resulting costs of production.
d. the firm's production costs and the amount of revenue it receives from the sale of its output.
answer
b. the factors of production and the resulting outputs of the production process.
question
In the context of a production function, the remote order takers in the fast food industry would be classified as:
a. a marginal input.
b. a fixed input.
c. an inframarginal input.
d. a variable input.
a. a marginal input.
b. a fixed input.
c. an inframarginal input.
d. a variable input.
answer
d. a variable input.
question
Consider the production function for bottled water. All of the following would be considered variable inputs except:
a. the electricity used to power the machine used to fill the bottles.
b. the machine used to fill each bottle.
c. the plastic bottles.
d. the water the bottles are filled with.
a. the electricity used to power the machine used to fill the bottles.
b. the machine used to fill each bottle.
c. the plastic bottles.
d. the water the bottles are filled with.
answer
b. the machine used to fill each bottle.
question
The term "fixed input" refers to:
a. inputs to production that yield a constant or "fixed" marginal product.
b. inputs to production that do not vary in price.
c. inputs to production that do not vary with respect to quality.
d. inputs to production, the quantity of which cannot be varied in the short run.
a. inputs to production that yield a constant or "fixed" marginal product.
b. inputs to production that do not vary in price.
c. inputs to production that do not vary with respect to quality.
d. inputs to production, the quantity of which cannot be varied in the short run.
answer
d. inputs to production, the quantity of which cannot be varied in the short run.
question
The main difference between the short run and the long run is that:
a. in the short run the firm varies all of its inputs to find the least-cost combination of inputs.
b. in the long run, the firm is making a constrained decision about how to use existing plant and equipment efficiently.
c. in the short run all inputs are fixed, while in the long run all inputs are variable.
d. in the short run, at least one of the firm's input levels is fixed.
a. in the short run the firm varies all of its inputs to find the least-cost combination of inputs.
b. in the long run, the firm is making a constrained decision about how to use existing plant and equipment efficiently.
c. in the short run all inputs are fixed, while in the long run all inputs are variable.
d. in the short run, at least one of the firm's input levels is fixed.
answer
d. in the short run, at least one of the firm's input levels is fixed.
question
Assume a factory that currently employs 25 workers is considering adding another 5 workers to its payroll. Economists would classify this as:
a. neither a short-run nor a long-run decision.
b. both a short-run and a long-run decision.
c. a short-run decision.
d. a long-run decision.
a. neither a short-run nor a long-run decision.
b. both a short-run and a long-run decision.
c. a short-run decision.
d. a long-run decision.
answer
c. a short-run decision.
question
The average product of a variable input is calculated as:
a. the change in total product divided by the change in the variable input.
b. total product divided by the total quantity of the variable input.
c. total product divided by the change in the variable input.
d. total product divided by total output.
a. the change in total product divided by the change in the variable input.
b. total product divided by the total quantity of the variable input.
c. total product divided by the change in the variable input.
d. total product divided by total output.
answer
b. total product divided by the total quantity of the variable input.
question
The marginal product of a variable input is calculated as:
a. total product divided by the change in the variable input.
b. the change in total product divided by the change in the variable input.
c. the change in total product divided by the change in output.
d. total product divided by the total quantity of the variable input.
a. total product divided by the change in the variable input.
b. the change in total product divided by the change in the variable input.
c. the change in total product divided by the change in output.
d. total product divided by the total quantity of the variable input.
answer
b. the change in total product divided by the change in the variable input.
question
Assume that after the fifth worker, each additional worker a firm hires is less productive than the previous worker. Based on this information, we can conclude that beyond the fifth worker, the average product of labor will:
a. increase.
b. cannot be determined without additional information.
c. decrease.
d. stay the same.
a. increase.
b. cannot be determined without additional information.
c. decrease.
d. stay the same.
answer
b. cannot be determined without additional information.
question
Which of the following is true of the typical relationship between marginal product (MP) and average product (AP)?
a. The AP curve intersects the MP curve at minimum MP.
b. If MP is greater than AP, then AP is falling.
c. If MP is less than AP, then AP is increasing.
d. The MP curve intersects the AP curve at maximum AP.
a. The AP curve intersects the MP curve at minimum MP.
b. If MP is greater than AP, then AP is falling.
c. If MP is less than AP, then AP is increasing.
d. The MP curve intersects the AP curve at maximum AP.
answer
d. The MP curve intersects the AP curve at maximum AP.
question
Marginal product equals 0 when:
a. average product equals zero.
b. total product reaches its maximum value.
c. total product equals average product.
d. average product reached its minimum value.
a. average product equals zero.
b. total product reaches its maximum value.
c. total product equals average product.
d. average product reached its minimum value.
answer
b. total product reaches its maximum value.
question
The "law of diminishing marginal returns" applies to:
a. the short run, but not the long run.
b. the long run, but not the short run.
c. both the short run and the long run.
d. neither the short run nor the long run.
a. the short run, but not the long run.
b. the long run, but not the short run.
c. both the short run and the long run.
d. neither the short run nor the long run.
answer
a. the short run, but not the long run.
question
All else constant, an increase in productivity has the effect of causing:
a. both the marginal and average product of labor to increase.
b. the marginal product of labor to increase and the average product of labor to decrease.
c. the marginal product of labor to increase and no effect on the average product of labor.
d. the average product of labor to increase and no effect on the marginal product of labor.
a. both the marginal and average product of labor to increase.
b. the marginal product of labor to increase and the average product of labor to decrease.
c. the marginal product of labor to increase and no effect on the average product of labor.
d. the average product of labor to increase and no effect on the marginal product of labor.
answer
a. both the marginal and average product of labor to increase.
question
Which of the following statements is correct?
a. Auto workers in the United States are less productive than their Japanese counterparts primarily due to the higher wages U.S. workers receive.
b. The increase in productivity Japanese manufacturers experienced in the early 1980s was the result primarily of changes in management focusing on inventory systems and plant layout.
c. Workers employed by General Motors are approximately twice as productive as their Japanese counterparts.
d. Between 1979 and 1998, Chrysler and Ford eliminated the productivity gap between all of their production facilities and their Japanese counterparts.
a. Auto workers in the United States are less productive than their Japanese counterparts primarily due to the higher wages U.S. workers receive.
b. The increase in productivity Japanese manufacturers experienced in the early 1980s was the result primarily of changes in management focusing on inventory systems and plant layout.
c. Workers employed by General Motors are approximately twice as productive as their Japanese counterparts.
d. Between 1979 and 1998, Chrysler and Ford eliminated the productivity gap between all of their production facilities and their Japanese counterparts.
answer
b. The increase in productivity Japanese manufacturers experienced in the early 1980s was the result primarily of changes in management focusing on inventory systems and plant layout.
question
Which of the following statements is true of the relationship among the average cost functions?
a. AFC = ATC - AVC
b. ATC = AFC - AVC
c. AFC = ATC + AVC
d. AVC = AFC + ATC
a. AFC = ATC - AVC
b. ATC = AFC - AVC
c. AFC = ATC + AVC
d. AVC = AFC + ATC
answer
a. AFC = ATC - AVC
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