ECON1B FINAL - Assignment Essays

question

Implicit costs are

answer

the opportunity cost of the means of production

question

Implicit costs can be difficult to measure because

answer

business owners cannot always observe them directly.

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A firm's inputs are also known as its

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factors of production

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The three primary factors of production are

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land, labor, and capital

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A firm has a certain amount of capital and land. As it hires more labor, each worker is able to

answer

specialize

question

As a firm hires more labor and each worker is able to specialize, what happens to each additional worker's marginal productivity?

answer

It increases at first, then decreases.

question

A firm's production function is similar to a recipe used to make a cake in the sense that the production function shows us the combination of _________ used to produce __________.

answer

inputs; output

question

The production function of a restaurant includes items such as labor (i.e., cooks, waiters, a manager), capital (i.e., ovens, counters, tables, chairs, and a building), and land. In the short run, the owner of the restaurant will optimize production by employing a variable amount of _________ given a fixed amount of _________.

answer

labor; capital and land

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If all workers are able to specialize and become more productive as more labor is hired, the amount of total output produced

answer

increases at an increasing rate

question

The production function for automobiles includes

answer

a factory, an assembly line, workers, and robots

question

If workers are unable to specialize and become more productive as more labor is hired, the amount of total output produced:

answer

increases at a decreasing rate

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The change in total output divided by the change in input is known as

answer

marginal product

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marginal product

answer

When a firm hires another employee and, as a result, total output increases, this change in total output is also known as

question

If there are gains from specialization in a workplace, hiring another employee means that the marginal product of labor will

answer

increase

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If the marginal product of labor for a firm decreases as more workers are hired, we know that

answer

the gains from specialization are exhausted

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In the short run, the cost of ________ is variable, whereas the cost of ________ is fixed.

answer

labor; capital

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Which of the following can we learn by looking at a firm's short-run costs?

answer

the cost-minimizing level of output

question

When output is 100 units, the firm's total fixed cost is $500. What will this firm's total fixed cost be if output doubles to 200 units?

answer

$500

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The gap between the average total cost (ATC) and average variable cost (AVC) curves represents

answer

average fixed cost

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https://d2vlcm61l7u1fs.cloudfront.net/media%2F041%2F0415ddb5-0b0a-47da-a160-497bf4ec8c88%2FphpMQMnJF.png

The average total cost (ATC) and average variable cost (AVC) converge as the level of output produced increases because:

answer

average fixed cost decreases as output increases

question

In the short run, average total costs at first decrease and then increase as more output is produced because

answer

marginal cost is at first less than average total costs, then rises above it

question

A firm's short-run cost curves show us

answer

the lowest-cost level of output

question

When the average total cost curve is downward-sloping, what must be true about the marginal cost curve?

answer

It is below the average total cost curve

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If the marginal cost curve is U-shaped

answer

there are productivity gains from specialization before diminishing marginal product sets in

question

When the average variable cost curve is upward-sloping, what must be true about the marginal cost curve?

answer

It is above the average variable cost curve

question

The change in total cost given a change in output is also known as:

answer

marginal cost

question

If the marginal product of labor is increasing, the marginal cost of output must be

answer

decreasing

question

If a firm experiences diminishing marginal product of labor, its marginal cost

answer

increases at an increasing rate

question

If a firm experiences productivity gains from employee specialization, its marginal cost

answer

decreases at a decreasing rate

question

https://d2vlcm61l7u1fs.cloudfront.net/media%2F256%2F2567ad5a-530d-49ff-9d1d-12ccbfcdc493%2FphpyTmVOH.png

The firm is experiencing gains from specialization up to what level of output along the marginal cost curve?

answer

question

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The firm is experiencing diminishing marginal product beyond what level of output along the marginal cost curve?

answer

question

Should a firm always produce the level of output where marginal cost is lowest?

answer

No. That might be the best choice, but it depends on the firm's profits

question

Where would we find a firm's minimum efficient scale of production?

answer

at the lowest point on its long-run average total cost curve

question

It is important for a firm to know its minimum efficient scale of production because that is where

answer

long-run costs are minimized

question

Refer to the following table. What is the total cost of producing five (5) units of the good?

answer

$1,025

question

Refer to the following table. What is the average variable cost of producing three (3) units of the good?

answer

$40

question

Which of the following is an example of a long-run cost for a manufacturing firm?

answer

an increase in the size of its factory

question

Which of the following is a question that a firm must answer in the long run but not in the short run?

answer

What is the optimal amount of capital to employ?

question

If a firm's average total costs decrease as it increases its scale of production, the firm is experiencing

answer

economies of scale

question

Which is the best example of diseconomies of scale?

answer

a parking garage

1 of 40

question

Implicit costs are

answer

the opportunity cost of the means of production

question

Implicit costs can be difficult to measure because

answer

business owners cannot always observe them directly.

question

A firm's inputs are also known as its

answer

factors of production

question

The three primary factors of production are

answer

land, labor, and capital

question

A firm has a certain amount of capital and land. As it hires more labor, each worker is able to

answer

specialize

question

As a firm hires more labor and each worker is able to specialize, what happens to each additional worker's marginal productivity?

answer

It increases at first, then decreases.

question

A firm's production function is similar to a recipe used to make a cake in the sense that the production function shows us the combination of _________ used to produce __________.

answer

inputs; output

question

answer

labor; capital and land

question

If all workers are able to specialize and become more productive as more labor is hired, the amount of total output produced

answer

increases at an increasing rate

question

The production function for automobiles includes

answer

a factory, an assembly line, workers, and robots

question

If workers are unable to specialize and become more productive as more labor is hired, the amount of total output produced:

answer

increases at a decreasing rate

question

The change in total output divided by the change in input is known as

answer

marginal product

question

marginal product

answer

When a firm hires another employee and, as a result, total output increases, this change in total output is also known as

question

If there are gains from specialization in a workplace, hiring another employee means that the marginal product of labor will

answer

increase

question

If the marginal product of labor for a firm decreases as more workers are hired, we know that

answer

the gains from specialization are exhausted

question

In the short run, the cost of ________ is variable, whereas the cost of ________ is fixed.

answer

labor; capital

question

Which of the following can we learn by looking at a firm's short-run costs?

answer

the cost-minimizing level of output

question

When output is 100 units, the firm's total fixed cost is $500. What will this firm's total fixed cost be if output doubles to 200 units?

answer

$500

question

answer

average fixed cost

question

answer

average fixed cost decreases as output increases

question

In the short run, average total costs at first decrease and then increase as more output is produced because

answer

marginal cost is at first less than average total costs, then rises above it

question

A firm's short-run cost curves show us

answer

the lowest-cost level of output

question

When the average total cost curve is downward-sloping, what must be true about the marginal cost curve?

answer

It is below the average total cost curve

question

If the marginal cost curve is U-shaped

answer

there are productivity gains from specialization before diminishing marginal product sets in

question

When the average variable cost curve is upward-sloping, what must be true about the marginal cost curve?

answer

It is above the average variable cost curve

question

The change in total cost given a change in output is also known as:

answer

marginal cost

question

If the marginal product of labor is increasing, the marginal cost of output must be

answer

decreasing

question

If a firm experiences diminishing marginal product of labor, its marginal cost

answer

increases at an increasing rate

question

If a firm experiences productivity gains from employee specialization, its marginal cost

answer

decreases at a decreasing rate

question

answer

question

answer

question

Should a firm always produce the level of output where marginal cost is lowest?

answer

No. That might be the best choice, but it depends on the firm's profits

question

Where would we find a firm's minimum efficient scale of production?

answer

at the lowest point on its long-run average total cost curve

question

It is important for a firm to know its minimum efficient scale of production because that is where

answer

long-run costs are minimized

question

Refer to the following table. What is the total cost of producing five (5) units of the good?

answer

$1,025

question

Refer to the following table. What is the average variable cost of producing three (3) units of the good?

answer

$40

question

Which of the following is an example of a long-run cost for a manufacturing firm?

answer

an increase in the size of its factory

question

Which of the following is a question that a firm must answer in the long run but not in the short run?

answer

What is the optimal amount of capital to employ?

question

If a firm's average total costs decrease as it increases its scale of production, the firm is experiencing

answer

economies of scale

question

Which is the best example of diseconomies of scale?

answer

a parking garage

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