Chapter 8 - Assignment Essays

question

The short run is a period of time in which

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the quantity of at least one factor of production is fixed

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In the long run, a firm has

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no factors of production that are fixed

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An example of a variable factor of production in the short run is

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an employee

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The marginal product of labor is the increase in total product from a

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one unit increase in the quantity of labor, while holding the quantity of other inputs constant

question

Average product of labor is equal to ________.

answer

total product divided by the quantity of labor employed

question

Using the data in the above table, what is the average product of three employees?

answer

4 pizzas per hour

question

In the above table, the marginal product is greatest when the

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second worker is hired

question

Increasing marginal returns to labor might occur at low levels of labor input because of

answer

increasing specialization of tasks

question

The law of diminishing returns states that as a firm increases

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a variable input, with a given quantity of fixed inputs, the marginal product of the variable input eventually decreases

question

Which of the following statements is TRUE?

answer

When marginal product is less than average product, average product is decreasing

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When the marginal product curve is downward sloping, the average product curve

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might be either upward or downward sloping

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When the marginal product equals the average product, the

answer

average product is at its maximum

question

The above table shows the short-run total product schedule for the campus book store. When the fifth employee is hired, the marginal product is ________ and is ________ the average product.

answer

decreasing; greater than

question

Total cost is equal to the

answer

sum of the total fixed cost and the total variable cost

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A firm's total fixed cost (TFC) is a cost

answer

that does not change as output changes

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A firm's total variable cost (TVC) is defined as a cost that

answer

changes as the firm changes its output

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The change in total cost from producing another unit of output equals the

answer

marginal cost

question

Which of the following statements is CORRECT?

answer

Total fixed cost plus total variable cost equals total cost

question

In a diagram with the total cost curve and the total variable cost curve, as output increases, the vertical distance between these two curves

answer

is constant

question

As output increases, AVC approaches ATC because of

answer

decreasing average fixed cost

question

Marginal cost eventually increases because

answer

All of the above answers are correct

question

The average total cost curve eventually slopes upwards because of the

answer

law of diminishing returns

question

Which of the following curves is not U-shaped?

answer

average fixed cost curve

question

A firm's average total cost is $60, its average variable cost is $30, and its total fixed cost is $600. Its output is

answer

20 units

question

The above (incomplete) table provides information about the relationships between output and various cost measures. The total cost (TC) of producing 9 units of output is

answer

$190

question

The above figure shows the costs at Barney's Bagel Bakery. After 3000 bagels are produced each day, the ATC curve starts to slope upward because the

answer

MC exceeds the ATC.

question

If marginal cost is less than average variable cost and output increases, average total cost ________ and average variable cost ________.

answer

decreases; decreases

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The range of output over which a firm's average variable cost is decreasing is the same as the range over which its

answer

average product is increasing

question

Which curve intersects the AVC curve at its minimum point?

answer

the MC curve

question

A technological change that increases productivity ________ marginal product and ________ marginal cost.

answer

increases; decreases

question

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

answer

an increase in the hourly wage that Barney pays his workers

question

Which of the following is FALSE?

answer

Fixed costs increase in the long run

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A firm's long-run average cost curve

answer

is U-shaped.
tells the firm which plant size to use and which quantity of labor to use to minimize the cost of producing any level of output.
shows the lowest attainable average total cost of producing any level of output when both capital and labor are variable.
***all of the above***

question

Dustin's copy shop can use four alternative plants. The figure above shows the average total cost curves for Plant 1 (ATC1), Plant 2 (ATC2), Plant 3 (ATC3), and Plant 4 (ATC4).What is Dustin's long-run average cost if the output is 3,000 copies per day?

answer

3.7 cents per copy

question

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?

answer

Plant A

question

The average total cost curves for Plant 1, ATC0, and Plant 2, ATC1, are shown in the figure above. Over what range of output is it efficient to operate Plant 1?

answer

0-25

question

Electric utility companies have built larger and larger electric generating stations and, as a result, the long-run average cost of producing each kilowatt hour decreased. This is an example of

answer

economies of scale.

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When a firm is experiencing diseconomies of scale

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the LRAC curve has a positive slope

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In the above figure, economies of scale are present up to an output level of

answer

10,000 pounds of coffee

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Based on the cost data in the above table, the long-run average cost (LRAC) is lowest when output is

answer

1 of 40

question

The short run is a period of time in which

answer

the quantity of at least one factor of production is fixed

question

In the long run, a firm has

answer

no factors of production that are fixed

question

An example of a variable factor of production in the short run is

answer

an employee

question

The marginal product of labor is the increase in total product from a

answer

one unit increase in the quantity of labor, while holding the quantity of other inputs constant

question

Average product of labor is equal to ________.

answer

total product divided by the quantity of labor employed

question

Using the data in the above table, what is the average product of three employees?

answer

4 pizzas per hour

question

In the above table, the marginal product is greatest when the

answer

second worker is hired

question

Increasing marginal returns to labor might occur at low levels of labor input because of

answer

increasing specialization of tasks

question

The law of diminishing returns states that as a firm increases

answer

a variable input, with a given quantity of fixed inputs, the marginal product of the variable input eventually decreases

question

Which of the following statements is TRUE?

answer

When marginal product is less than average product, average product is decreasing

question

When the marginal product curve is downward sloping, the average product curve

answer

might be either upward or downward sloping

question

When the marginal product equals the average product, the

answer

average product is at its maximum

question

The above table shows the short-run total product schedule for the campus book store. When the fifth employee is hired, the marginal product is ________ and is ________ the average product.

answer

decreasing; greater than

question

Total cost is equal to the

answer

sum of the total fixed cost and the total variable cost

question

A firm's total fixed cost (TFC) is a cost

answer

that does not change as output changes

question

A firm's total variable cost (TVC) is defined as a cost that

answer

changes as the firm changes its output

question

The change in total cost from producing another unit of output equals the

answer

marginal cost

question

Which of the following statements is CORRECT?

answer

Total fixed cost plus total variable cost equals total cost

question

In a diagram with the total cost curve and the total variable cost curve, as output increases, the vertical distance between these two curves

answer

is constant

question

As output increases, AVC approaches ATC because of

answer

decreasing average fixed cost

question

Marginal cost eventually increases because

answer

All of the above answers are correct

question

The average total cost curve eventually slopes upwards because of the

answer

law of diminishing returns

question

Which of the following curves is not U-shaped?

answer

average fixed cost curve

question

A firm's average total cost is $60, its average variable cost is $30, and its total fixed cost is $600. Its output is

answer

20 units

question

The above (incomplete) table provides information about the relationships between output and various cost measures. The total cost (TC) of producing 9 units of output is

answer

$190

question

The above figure shows the costs at Barney's Bagel Bakery. After 3000 bagels are produced each day, the ATC curve starts to slope upward because the

answer

MC exceeds the ATC.

question

If marginal cost is less than average variable cost and output increases, average total cost ________ and average variable cost ________.

answer

decreases; decreases

question

The range of output over which a firm's average variable cost is decreasing is the same as the range over which its

answer

average product is increasing

question

Which curve intersects the AVC curve at its minimum point?

answer

the MC curve

question

A technological change that increases productivity ________ marginal product and ________ marginal cost.

answer

increases; decreases

question

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

answer

an increase in the hourly wage that Barney pays his workers

question

Which of the following is FALSE?

answer

Fixed costs increase in the long run

question

A firm's long-run average cost curve

answer

question

answer

3.7 cents per copy

question

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?

answer

Plant A

question

The average total cost curves for Plant 1, ATC0, and Plant 2, ATC1, are shown in the figure above. Over what range of output is it efficient to operate Plant 1?

answer

0-25

question

Electric utility companies have built larger and larger electric generating stations and, as a result, the long-run average cost of producing each kilowatt hour decreased. This is an example of

answer

economies of scale.

question

When a firm is experiencing diseconomies of scale

answer

the LRAC curve has a positive slope

question

In the above figure, economies of scale are present up to an output level of

answer

10,000 pounds of coffee

question

Based on the cost data in the above table, the long-run average cost (LRAC) is lowest when output is

answer

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