MicroEconomics - Pearson - Chapter 11 Concept Check and Vocabulary

question

When a positive technological change occurs,

answer

Answer: Either (a) or (b)
A. more output can be produced from the same inputs.
B. the same output can be produced with fewer inputs.

question

The 7-Eleven chain of convenience stores in Japan reorganized its system for supplying its stores with food. This led to a sharp reduction in the number of trucks the company had to use, while increasing the amount of fresh food on store shelves. Someone discussing 7-Eleven's new system argues
"This is not an example of technological change because it did not require the use of new machinery or equipment."
Briefly explain whether you agree with this argument.

answer

Both a and b.
A. The argument is incorrect. Technology includes the speed of existing machinery and equipment.
B. The argument is incorrect. Technology includes the efficiency of existing machinery and equipment.

question

Which costs are affected by the level of output produced?

answer

variable costs

question

Refer to the table to the right. Which of the following costs are implicit costs?

answer

the forgone salary and interest

question

Which of the following are sometimes called accounting costs?

answer

explicit costs

question

Technology

answer

The processes a firm uses to turn inputs into outputs of goods and services

question

Technological Change

answer

A change in the ability of a firm to produce a given level of output with a given quantity of inputs

question

Short Run

answer

The period of time during which at least one of a firm's is fixed.

question

Long Run

answer

The period of time in which a firm can vary all its inputs, adopt new technology and increase or decrease the size of its physical plant

question

Total Cost

answer

The cost of all the inputs a firm uses in production.
Fixed Costs plus Variable Costs equals Total Costs

question

Variable Costs

answer

Costs that change as output changes

question

Fixed Costs

answer

Costs that remain constant as output changes.

question

Opportunity Costs

answer

The highest valued alternative that must be given up to engage in an activity.

question

Explicit Cost

answer

A cost that involves spending money

question

Implicit Cost

answer

A non-monetary opportunity cost

question

The relationship between the inputs employed by a firm and the maximum output it can produce with those inputs is called the

answer

production function.

question

Which of the graphs (to the right) represents a typical average total cost curve?

answer

Graph B

question

The law of diminishing returns applies

answer

in the short run

question

Refer to the table below. When do diminishing returns in the production of pizzas start?

answer

when the third worker is hired

question

Refer to the to graph on the right. From the origin up until point A

answer

output increases at an increasing rate.

question

Refer to the to graph on the right. From point A up until point B,

answer

output increases at a decreasing rate.

question

Explicit costs are sometimes called:

answer

Accounting Costs

question

Economic costs include both:

answer

Accounting Costs and Implicit Costs

question

Production Function

answer

The relationship between the inputs employed by a firm and the maximum output it can produce with those inputs

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Average Total Cost

answer

Total cost divided by the quantity of output produced

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Marginal product of Labor

answer

The additional output a firm produces as a result of hiring one more worker

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Law of Diminishing Returns

answer

The principle that, at some point, adding more of a variable input such as labor, to the same amount of a fixed input, such as capital, will cause the marginal product of the variable input to decline.

question

When the marginal product of labor is increasing -

answer

The total output increases at an increasing rate

question

When the marginal product of labor is decreasing but still positive -

answer

The total output increases, but at a decreasing rate

question

When the marginal product of labor is greater than the average product of labor, then the average product of labor must be

answer

increasing.

question

The GPA you earn in a particular semester is your ________ GPA, and your cumulative GPA for all completed semesters is your ________ GPA.

answer

marginal;
average

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The Average Product of Labor is the

answer

Average of the Marginal products of Labor

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Average Product of Labor

answer

The total output produced by a firm divided by the quantity of workers.

question

Refer to the table to the right. What is the marginal cost of producing the 200th pizza?

answer

$3.25

question

Refer to the to graph on the right.
For a certain output range (or quantity of pizzas produced per day), marginal cost is greater than average cost. What is this output range?

answer

The output range greater than about 525 pizzas per day

question

Refer to the to graph on the right.
When marginal cost is less than average total cost, average total cost must be

answer

decreasing.

question

Marginal Cost

answer

The change in a firm's total cost from producing one more unit of a good or service

question

When the marginal product of labor is rising -

answer

the marginal cost of output is falling

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When the marginal product of labor is falling -

answer

the marginal cost of output is rising

question

What cost measure is equal to AFC plus AVC?

answer

average total cost

question

All of the following cost measures reach their minimum points when they are equal to the value of marginal cost, except one.
Which cost measure is the exception?

answer

average fixed cost

question

As output increases, the vertical distance between average total cost and average variable cost curves gets _______ and equals _______.

answer

smaller
average fixed cost

1 of 42

question

When a positive technological change occurs,

answer

Answer: Either (a) or (b)
A. more output can be produced from the same inputs.
B. the same output can be produced with fewer inputs.

question

answer

question

Which costs are affected by the level of output produced?

answer

variable costs

question

Refer to the table to the right. Which of the following costs are implicit costs?

answer

the forgone salary and interest

question

Which of the following are sometimes called accounting costs?

answer

explicit costs

question

Technology

answer

The processes a firm uses to turn inputs into outputs of goods and services

question

Technological Change

answer

A change in the ability of a firm to produce a given level of output with a given quantity of inputs

question

Short Run

answer

The period of time during which at least one of a firm's is fixed.

question

Long Run

answer

The period of time in which a firm can vary all its inputs, adopt new technology and increase or decrease the size of its physical plant

question

Total Cost

answer

The cost of all the inputs a firm uses in production.
Fixed Costs plus Variable Costs equals Total Costs

question

Variable Costs

answer

Costs that change as output changes

question

Fixed Costs

answer

Costs that remain constant as output changes.

question

Opportunity Costs

answer

The highest valued alternative that must be given up to engage in an activity.

question

Explicit Cost

answer

A cost that involves spending money

question

Implicit Cost

answer

A non-monetary opportunity cost

question

The relationship between the inputs employed by a firm and the maximum output it can produce with those inputs is called the

answer

production function.

question

Which of the graphs (to the right) represents a typical average total cost curve?

answer

Graph B

question

The law of diminishing returns applies

answer

in the short run

question

Refer to the table below. When do diminishing returns in the production of pizzas start?

answer

when the third worker is hired

question

Refer to the to graph on the right. From the origin up until point A

answer

output increases at an increasing rate.

question

Refer to the to graph on the right. From point A up until point B,

answer

output increases at a decreasing rate.

question

Explicit costs are sometimes called:

answer

Accounting Costs

question

Economic costs include both:

answer

Accounting Costs and Implicit Costs

question

Production Function

answer

The relationship between the inputs employed by a firm and the maximum output it can produce with those inputs

question

Average Total Cost

answer

Total cost divided by the quantity of output produced

question

Marginal product of Labor

answer

The additional output a firm produces as a result of hiring one more worker

question

Law of Diminishing Returns

answer

question

When the marginal product of labor is increasing -

answer

The total output increases at an increasing rate

question

When the marginal product of labor is decreasing but still positive -

answer

The total output increases, but at a decreasing rate

question

When the marginal product of labor is greater than the average product of labor, then the average product of labor must be

answer

increasing.

question

The GPA you earn in a particular semester is your ________ GPA, and your cumulative GPA for all completed semesters is your ________ GPA.

answer

marginal;
average

question

The Average Product of Labor is the

answer

Average of the Marginal products of Labor

question

Average Product of Labor

answer

The total output produced by a firm divided by the quantity of workers.

question

Refer to the table to the right. What is the marginal cost of producing the 200th pizza?

answer

$3.25

question

Refer to the to graph on the right.
For a certain output range (or quantity of pizzas produced per day), marginal cost is greater than average cost. What is this output range?

answer

The output range greater than about 525 pizzas per day

question

Refer to the to graph on the right.
When marginal cost is less than average total cost, average total cost must be

answer

decreasing.

question

Marginal Cost

answer

The change in a firm's total cost from producing one more unit of a good or service

question

When the marginal product of labor is rising -

answer

the marginal cost of output is falling

question

When the marginal product of labor is falling -

answer

the marginal cost of output is rising

question

What cost measure is equal to AFC plus AVC?

answer

average total cost

question

All of the following cost measures reach their minimum points when they are equal to the value of marginal cost, except one.
Which cost measure is the exception?

answer

average fixed cost

question

As output increases, the vertical distance between average total cost and average variable cost curves gets _______ and equals _______.

answer

smaller
average fixed cost

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MicroEconomics – Pearson – Chapter 11 Concept Check and Vocabulary

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