Microeconomics: Technology, Production, and Costs

question

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

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a) Technology

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FIrm has successfully adopted a positive technological change when?

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a) it can produce more output using the same inputs

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Not a source of technological advancement for a producer

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outsourcing some aspect of production

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which of the following statements best describes the economic short run?

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It is a period during which at least one of the firms inputs is fixed.

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A characteristic of a long run is?

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all inputs can be varied

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In the long run which of the following is true?

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there are no fixed costs

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Which of the following statements are true?

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c) Total cost=fixed costs+variable costs

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Bill owns "Bill's Home of Blues" a store that specializes in selling CDs and DVDs of blues musicians of the 1960s and 1970s. Bill took out a loan from his bank to pay for his store and its initial inventory. Bill pays the bank $900 per week for his loan. The $900 bank payment

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B) is a fixed cost

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The law of diminishing marginal returns states

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B) 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

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The law of diminishing marginal returns

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B) applies only in the short run.

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The marginal product of labor is defined as

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D) the change in output that a firm produces as a result of hiring one more worker.

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Diminishing marginal product of labor occurs when adding another unit of labor

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D) decreases output by an amount smaller than the output added by the previous unit of labor.

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Increases in the marginal product of labor result from

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C) the division of labor and specialization.

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As a firm hires more labor in the short run, the

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extra output of another worker may rise at first, but eventually must fall.

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If another worker adds 9 units of output to a group of workers who had an average product of 7 units, then the average product of labor

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B) will increase.

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How to find marginal product

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differences between two outputs

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How to find average product of labor

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output divided by the number of workers

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Marginal cost is equal to the

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change in total cost divided by the change in output

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In the short run, if marginal product is at its maximum, then

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marginal cost is at its minimum.

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Which of the following explains why the marginal cost curve has a U shape?

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C) Initially, the marginal product of labor rises, then falls.

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How to calculate Marginal Cost

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change in total cost / change in quantity

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When the marginal product of labor rises, ceteris paribus,

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C) the marginal cost of production falls.

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If fixed costs do not change, then marginal cost

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B) equals the change in variable cost divided by the change in output

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If fixed costs do not change, then marginal cost

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equals the change in variable cost divided by the change in output.

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Which of the following costs will not change as output changes?

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D) total fixed cost

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Which of the following equations is correct?

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C) AFC + AVC = ATC

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If the marginal cost curve is below the average variable cost curve, then

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B) average variable cost is decreasing.

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Long-run cost curves are U-shaped because

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C) of economies and diseconomies of scale

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Over the past twenty years, the number of small family farms has fallen significantly and in their place there are fewer, but larger, farms owned by corporations. Which of the following best explains this trend?

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B) economies of scale in farming

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The president of Toyota's Georgetown plant was quoted as saying, "Demand for high volumes saps your energy. Over a period of time, it eroded our focus [and] thinned out the expertise and knowledge we painstakingly built up over the years." This quote suggests that

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B) as Toyota expanded its capacity, it experienced diseconomies of scale.

1 of 30

question

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

answer

a) Technology

question

FIrm has successfully adopted a positive technological change when?

answer

a) it can produce more output using the same inputs

question

Not a source of technological advancement for a producer

answer

outsourcing some aspect of production

question

which of the following statements best describes the economic short run?

answer

It is a period during which at least one of the firms inputs is fixed.

question

A characteristic of a long run is?

answer

all inputs can be varied

question

In the long run which of the following is true?

answer

there are no fixed costs

question

Which of the following statements are true?

answer

c) Total cost=fixed costs+variable costs

question

answer

B) is a fixed cost

question

The law of diminishing marginal returns states

answer

B) 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

The law of diminishing marginal returns

answer

B) applies only in the short run.

question

The marginal product of labor is defined as

answer

D) the change in output that a firm produces as a result of hiring one more worker.

question

Diminishing marginal product of labor occurs when adding another unit of labor

answer

D) decreases output by an amount smaller than the output added by the previous unit of labor.

question

Increases in the marginal product of labor result from

answer

C) the division of labor and specialization.

question

As a firm hires more labor in the short run, the

answer

extra output of another worker may rise at first, but eventually must fall.

question

If another worker adds 9 units of output to a group of workers who had an average product of 7 units, then the average product of labor

answer

B) will increase.

question

How to find marginal product

answer

differences between two outputs

question

How to find average product of labor

answer

output divided by the number of workers

question

Marginal cost is equal to the

answer

change in total cost divided by the change in output

question

In the short run, if marginal product is at its maximum, then

answer

marginal cost is at its minimum.

question

Which of the following explains why the marginal cost curve has a U shape?

answer

C) Initially, the marginal product of labor rises, then falls.

question

How to calculate Marginal Cost

answer

change in total cost / change in quantity

question

When the marginal product of labor rises, ceteris paribus,

answer

C) the marginal cost of production falls.

question

If fixed costs do not change, then marginal cost

answer

B) equals the change in variable cost divided by the change in output

question

If fixed costs do not change, then marginal cost

answer

equals the change in variable cost divided by the change in output.

question

Which of the following costs will not change as output changes?

answer

D) total fixed cost

question

Which of the following equations is correct?

answer

C) AFC + AVC = ATC

question

If the marginal cost curve is below the average variable cost curve, then

answer

B) average variable cost is decreasing.

question

Long-run cost curves are U-shaped because

answer

C) of economies and diseconomies of scale

question

answer

B) economies of scale in farming

question

answer

B) as Toyota expanded its capacity, it experienced diseconomies of scale.

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