ECON EXAM 2 key - Assignment Essays

question

To improve delivery, Joe's Pizza Emporium made a change that involved taking better account of traffic to avoid delays in delivering pizzas. This is an example of

answer

positive technological change

question

When a firm experiences a positive technological change

answer

the firm is able to produce more output using the same inputs, or the same output using fewer inputs.

question

look at the table
What is the average product of labor when the Matsuko Mushroom farm hires 5 workers?

answer

10.8 pounds

question

What is the marginal product of labor for the 4th at Matsuko Mushroom Farm?

answer

5 pounds

question

At Matsuko Mushroom farm diminishing marginal productivity of labor sets in when the ________ worker is hired.

answer

3rd

question

Jayanthi moves her yoga studio from her home to a space she rents in Oakland, California. Holding everything else constant, as a result of this move

answer

her implicit cost falls and her explicit cost rises.

question

Marginal cost is the

answer

Additional cost of producing an additional unit of output.

question

The law of diminishing marginal returns states

answer

that at some point, adding more of a variable input to a given amount of a fixed input will
cause the marginal product of the variable input to decline.

question

If a producer is not able to expand its plant capacity immediately, it is

answer

operating in the short run

question

Which of the following is the best example of a short-run adjustment?

answer

Your local Walmart hires two more associates.

question

A characteristic of the long run is

answer

all inputs can be varied.

question

Which of the following equations is correct?

answer

AFC + AVC = ATC

question

An avocado orchard employs five full-time workers. Currently, the average product of labor is 120 pounds of avocados per day. The orchard hires a 6th full-time worker and his marginal product is 150 pounds of avocados. The average product of the six workers will now be

answer

more than 120 pounds.

question

Which of the following is true at the output level where average total cost is at its minimum?

answer

Marginal cost equals average total cost.

question

Look at the diagram
Identify the curves in the diagram above

answer

E = marginal cost curve; F = average total cost curve; G = average variable cost curve; H =

average fixed cost curve

question

If production displays economies of scale, the long-run average cost curve is

answer

downward sloping.

question

Perfect competition is characterized by all of the following except

answer

sellers are price takers

question

Both individual buyers and sellers in perfect competition

answer

have to take the market price as a given

question

For a perfectly competitive firm, at profit maximization

answer

marginal revenue equals marginal cost.

question

Which of the following is the best example of a perfectly competitive industry?

answer

the wheat market

question

If, for the last bushel of apples produced and sold by an apple farm (a perfectly competitive firm), marginal revenue exceeds marginal cost (MR>MC), then in producing that bushel the farm

answer

added more to total revenue than it added to total cost

question

In the short run, a firm that is operating at a loss has two options. These options are

answer

to shut down temporarily or continue to produce

question

Refer to Figure 11-7. Which of the following statements describes the best course of action for the firm depicted in the diagram?

answer

The firm should minimize its losses by producing Qy units and charging a price of P1.

question

For a monopolistically competitive firm, marginal revenue

answer

is less than the price

question

Which of the following is not a characteristic of monopolistic competition?

answer

The products sold by all firms are identical.

question

Refer to Table 11-1. What is the marginal revenue of the 3rd unit?

answer

$5.50

1 of 26

question

To improve delivery, Joe's Pizza Emporium made a change that involved taking better account of traffic to avoid delays in delivering pizzas. This is an example of

answer

positive technological change

question

When a firm experiences a positive technological change

answer

the firm is able to produce more output using the same inputs, or the same output using fewer inputs.

question

look at the table
What is the average product of labor when the Matsuko Mushroom farm hires 5 workers?

answer

10.8 pounds

question

What is the marginal product of labor for the 4th at Matsuko Mushroom Farm?

answer

5 pounds

question

At Matsuko Mushroom farm diminishing marginal productivity of labor sets in when the ________ worker is hired.

answer

3rd

question

Jayanthi moves her yoga studio from her home to a space she rents in Oakland, California. Holding everything else constant, as a result of this move

answer

her implicit cost falls and her explicit cost rises.

question

Marginal cost is the

answer

Additional cost of producing an additional unit of output.

question

The law of diminishing marginal returns states

answer

that at some point, adding more of a variable input to a given amount of a fixed input will
cause the marginal product of the variable input to decline.

question

If a producer is not able to expand its plant capacity immediately, it is

answer

operating in the short run

question

Which of the following is the best example of a short-run adjustment?

answer

Your local Walmart hires two more associates.

question

A characteristic of the long run is

answer

all inputs can be varied.

question

Which of the following equations is correct?

answer

AFC + AVC = ATC

question

answer

more than 120 pounds.

question

Which of the following is true at the output level where average total cost is at its minimum?

answer

Marginal cost equals average total cost.

question

Look at the diagram
Identify the curves in the diagram above

answer

E = marginal cost curve; F = average total cost curve; G = average variable cost curve; H =

average fixed cost curve

question

If production displays economies of scale, the long-run average cost curve is

answer

downward sloping.

question

Perfect competition is characterized by all of the following except

answer

sellers are price takers

question

Both individual buyers and sellers in perfect competition

answer

have to take the market price as a given

question

For a perfectly competitive firm, at profit maximization

answer

marginal revenue equals marginal cost.

question

Which of the following is the best example of a perfectly competitive industry?

answer

the wheat market

question

If, for the last bushel of apples produced and sold by an apple farm (a perfectly competitive firm), marginal revenue exceeds marginal cost (MR>MC), then in producing that bushel the farm

answer

added more to total revenue than it added to total cost

question

In the short run, a firm that is operating at a loss has two options. These options are

answer

to shut down temporarily or continue to produce

question

Refer to Figure 11-7. Which of the following statements describes the best course of action for the firm depicted in the diagram?

answer

The firm should minimize its losses by producing Qy units and charging a price of P1.

question

For a monopolistically competitive firm, marginal revenue

answer

is less than the price

question

Which of the following is not a characteristic of monopolistic competition?

answer

The products sold by all firms are identical.

question

Refer to Table 11-1. What is the marginal revenue of the 3rd unit?

answer

$5.50

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