Chapter 8 - Assignment Essays

question

_______ is the creation of goods and services from inputs or resources.

answer

Production

question

Select all that apply

A production function

shows the maximum output possible.

is not a mathematical equation.

holds fixed technology.

relates output to units of technology.

can be expressed as Q=f(L, K).

answer

shows the maximum output possible.

holds fixed technology.

can be expressed as Q=f(L, K).

question

When a given level of output can be produced with more than one combination of inputs it is called ________ proportions production.

answer

variable

question

Technical efficiency is achieved when a firm produces

answer

the maximum output given the inputs.

question

Economic efficiency is achieved when a firm produces

answer

a level of output at the lowest possible cost.

question

Production:

answer

is the creation of goods and services from resources.

question

A ______ input is an input that must be purchased in large, indivisible chunks.

answer

quasi-fixed

question

A(n) ______ is a table or equation showing the maximum output that can be producted from any specified set of inputs, given existing technology.

answer

production function

question

The _____ is the period of time in which producers can change all fixed inputs.

answer

Long run

question

________ efficiency is achieved when a firm produces the maximum output given the inputs.

answer

Technical

question

________ efficiency is achieved when a firm produces a certain level of output at the least cost.

answer

Economic

question

A ______ input is an input for which the level of usage cannot change to increase or decrease output.

answer

Fixed

question

The firm's ______ is the set of all possible short-run situations that the firm can face in the future.

answer

Planning Horizon

question

The _____ is the period of time in which producers can change only variable inputs.

answer

Short run

question

A(n) ______ cost can be recovered, while a(n) ______ cost cannot.

answer

avoidable; sunk

question

______ product is the output that is produced given a production function and various levels of the inputs capital and labor.

answer

Total

question

Average product is calculated as

answer

Q/L

question

Select all that apply

The two reasons for fixed or quasi-fixed inputs include

the input is immovable.

the cost of the input is fixed.

the input must be purchased in bulk amounts.

the cost of adjusting the input is prohibitively high.

answer

the input must be purchased in bulk amounts.

the cost of adjusting the input is prohibitively high.

question

Marginal product is

answer

the additional product added when one more unit of labor is hired.

question

If marginal product is lower than average product, average product is

answer

falling

question

A(n)_____ cost in production is a cost associated with an input that the firm can avoid or recover should the firm choose not to use it anymore.

answer

Avoidable

question

______ is the principle that as the number of variable inputs increases, other inputs held constant, a point will be reached beyond which the marginal product decreases.

answer

The law of diminishing marginal product

question

Total output is _____ when labor input is set at 0.

answer

Zero

question

Holding all other things constant, when the fixed inputs of production increase,

answer

both average product and marginal product will increase.

question

Average product is

answer

the average output per unit of input.

question

______ costs are costs that must be paid regardless of the level of output.

answer

Total Fixed

question

Marginal product is calculated as

answer

ΔQ/ΔL.

question

Average variable cost is calculated

answer

AVC = TVC/Q

question

If marginal product is higher than average product, average product is

answer

rising

question

Short run marginal cost is

answer

the change in cost with a one-unit change in quantity of output.

question

The law of diminishing marginal product is illustrated by the:

answer

negative slope of the marginal product curve.

question

The AVC curve and the ATC curve are separated by

answer

the value of AFC.

question

Select all that apply

Average variable cost is dependent on

the average product of the variable input.

total cost.

the marginal product of the variable input.

the wage.

the fixed input.

answer

the average product of the variable input.

the wage.

question

When graphed, total cost is

answer

higher than TVC by the amount of TFC.

question

Select all that apply

Short run marginal cost is dependent on

the average product of the variable input.

the marginal product of the variable input.

the fixed input.

the wage.

total cost.

answer

the marginal product of the variable input.

the wage.

question

Average fixed cost is calculated

answer

AFC = TFC/Q

question

MC will begin to

answer

increase at the same quantity of output as the output at which MP begins to fall.

question

True or false: Short run marginal cost can be calculated as ΔTC/ΔQ or ΔTFC/ΔQ

answer

False

question

Average fixed cost

answer

decreases as quantity increases.

question

True or false: Diminishing marginal product is the reason marginal costs begin to rise after some point.

answer

True

question

The short-run marginal cost is the

answer

additional cost when one more unit of output is produced.

question

A fixed cost is

answer

a cost that does not vary with output and the firm must pay it even if output is zero.

question

If a firm is producing a given level of output in a technically efficient manner, then it must be the case that

answer

this output level is the most that can be produced with the given levels of inputs.

question

To answer, refer to the following:

"Ford built 18 vehicles per auto employee in North America last year, while GM could only manage 12."

In comparison with GM, Ford had a higher

answer

average product of labor.

question

A production function measures the relation between

answer

the quantity of inputs and the quantity of output.

question

Diminishing returns refers to the decrease in

answer

marginal product that results from increases in the variable input.

question

Marginal cost

answer

both "measures how total cost changes when one more unit of output is produced" and "is less than average cost when average cost is decreasing".

question

If average product is increasing, then marginal product

answer

must be greater than average product.

question

A short-run production function assumes that

answer

at least one input is a fixed input.

question

Suppose that you run a house-painting company and currently have 2 workers painting a total of 4 houses per month. If you hire a third worker, 6 houses can be painted per month. If you hire a fourth worker, 9 houses can be painted, and a fifth and sixth worker will increase the number of houses painted to 13 and 15, respectively. Diminishing returns

answer

set in when the sixth worker is hired.

question

A short-run cost function assumes that

answer

at least one input is fixed in supply.

question

To answer, refer to the following:

"At Huffy's ... bicycle factory, 1,700 employees turn out 15,000 bicycles a day. Five years ago, it required 2,200 workers to make 10,000 bikes daily."

Holding all else equal, we can conclude that, over the past 5 years,

answer

Huffy's average variable cost decreased.

question

If a firm is producing a given level of output in an economically efficient manner, then it must be the case that

answer

this is the lowest cost method of producing that output.

1 of 53

question

_______ is the creation of goods and services from inputs or resources.

answer

Production

question

Select all that apply

A production function

shows the maximum output possible.

is not a mathematical equation.

holds fixed technology.

relates output to units of technology.

can be expressed as Q=f(L, K).

answer

shows the maximum output possible.

holds fixed technology.

can be expressed as Q=f(L, K).

question

When a given level of output can be produced with more than one combination of inputs it is called ________ proportions production.

answer

variable

question

Technical efficiency is achieved when a firm produces

answer

the maximum output given the inputs.

question

Economic efficiency is achieved when a firm produces

answer

a level of output at the lowest possible cost.

question

Production:

answer

is the creation of goods and services from resources.

question

A ______ input is an input that must be purchased in large, indivisible chunks.

answer

quasi-fixed

question

A(n) ______ is a table or equation showing the maximum output that can be producted from any specified set of inputs, given existing technology.

answer

production function

question

The _____ is the period of time in which producers can change all fixed inputs.

answer

Long run

question

________ efficiency is achieved when a firm produces the maximum output given the inputs.

answer

Technical

question

________ efficiency is achieved when a firm produces a certain level of output at the least cost.

answer

Economic

question

A ______ input is an input for which the level of usage cannot change to increase or decrease output.

answer

Fixed

question

The firm's ______ is the set of all possible short-run situations that the firm can face in the future.

answer

Planning Horizon

question

The _____ is the period of time in which producers can change only variable inputs.

answer

Short run

question

A(n) ______ cost can be recovered, while a(n) ______ cost cannot.

answer

avoidable; sunk

question

______ product is the output that is produced given a production function and various levels of the inputs capital and labor.

answer

Total

question

Average product is calculated as

answer

Q/L

question

Select all that apply

The two reasons for fixed or quasi-fixed inputs include

the input is immovable.

the cost of the input is fixed.

the input must be purchased in bulk amounts.

the cost of adjusting the input is prohibitively high.

answer

the input must be purchased in bulk amounts.

the cost of adjusting the input is prohibitively high.

question

Marginal product is

answer

the additional product added when one more unit of labor is hired.

question

If marginal product is lower than average product, average product is

answer

falling

question

A(n)_____ cost in production is a cost associated with an input that the firm can avoid or recover should the firm choose not to use it anymore.

answer

Avoidable

question

______ is the principle that as the number of variable inputs increases, other inputs held constant, a point will be reached beyond which the marginal product decreases.

answer

The law of diminishing marginal product

question

Total output is _____ when labor input is set at 0.

answer

Zero

question

Holding all other things constant, when the fixed inputs of production increase,

answer

both average product and marginal product will increase.

question

Average product is

answer

the average output per unit of input.

question

______ costs are costs that must be paid regardless of the level of output.

answer

Total Fixed

question

Marginal product is calculated as

answer

ΔQ/ΔL.

question

Average variable cost is calculated

answer

AVC = TVC/Q

question

If marginal product is higher than average product, average product is

answer

rising

question

Short run marginal cost is

answer

the change in cost with a one-unit change in quantity of output.

question

The law of diminishing marginal product is illustrated by the:

answer

negative slope of the marginal product curve.

question

The AVC curve and the ATC curve are separated by

answer

the value of AFC.

question

Select all that apply

Average variable cost is dependent on

the average product of the variable input.

total cost.

the marginal product of the variable input.

the wage.

the fixed input.

answer

the average product of the variable input.

the wage.

question

When graphed, total cost is

answer

higher than TVC by the amount of TFC.

question

Select all that apply

Short run marginal cost is dependent on

the average product of the variable input.

the marginal product of the variable input.

the fixed input.

the wage.

total cost.

answer

the marginal product of the variable input.

the wage.

question

Average fixed cost is calculated

answer

AFC = TFC/Q

question

MC will begin to

answer

increase at the same quantity of output as the output at which MP begins to fall.

question

True or false: Short run marginal cost can be calculated as ΔTC/ΔQ or ΔTFC/ΔQ

answer

False

question

Average fixed cost

answer

decreases as quantity increases.

question

True or false: Diminishing marginal product is the reason marginal costs begin to rise after some point.

answer

True

question

The short-run marginal cost is the

answer

additional cost when one more unit of output is produced.

question

A fixed cost is

answer

a cost that does not vary with output and the firm must pay it even if output is zero.

question

If a firm is producing a given level of output in a technically efficient manner, then it must be the case that

answer

this output level is the most that can be produced with the given levels of inputs.

question

To answer, refer to the following:

"Ford built 18 vehicles per auto employee in North America last year, while GM could only manage 12."

In comparison with GM, Ford had a higher

answer

average product of labor.

question

A production function measures the relation between

answer

the quantity of inputs and the quantity of output.

question

Diminishing returns refers to the decrease in

answer

marginal product that results from increases in the variable input.

question

Marginal cost

answer

both "measures how total cost changes when one more unit of output is produced" and "is less than average cost when average cost is decreasing".

question

If average product is increasing, then marginal product

answer

must be greater than average product.

question

A short-run production function assumes that

answer

at least one input is a fixed input.

question

answer

set in when the sixth worker is hired.

question

A short-run cost function assumes that

answer

at least one input is fixed in supply.

question

To answer, refer to the following:

"At Huffy's ... bicycle factory, 1,700 employees turn out 15,000 bicycles a day. Five years ago, it required 2,200 workers to make 10,000 bikes daily."

Holding all else equal, we can conclude that, over the past 5 years,

answer

Huffy's average variable cost decreased.

question

If a firm is producing a given level of output in an economically efficient manner, then it must be the case that

answer

this is the lowest cost method of producing that output.

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