Microeconomics Test 2 Part 1 McClung

question

The most important decision that sellers make is:

answer

whether to produce another unit

question

The primary objective of most private firms is to:

answer

maximize profit.

question

Total revenue minus total explicit and implicit costs defines:

answer

profit

question

The short run is defined as:

answer

a period in which at least one factor of production is fixed.

question

A fixed factor of production:

answer

is fixed only in the short run.

question

A variable factor of production:

answer

is variable in both the short run and the long run.

question

Which of the following factors of production is likely to be fixed in the short run?

answer

The location of the firm.

question

Which of the following is most likely to be a variable factor of production at a university?

answer

The number of teaching assistants.

question

One reason that variable factors of production tend to show diminishing returns in the short run is that:

answer

There are more and more workers using a fixed amount of productive resources.

question

Marginal cost is calculated as:

answer

The change in total costs divided by the change in output.

question

If a firm spends $400 to produce 20 units of output and spends $880 to produce 40 units, then between 20 and 40
units of output, the marginal cost of production is:

answer

$24.

question

Assume that a firm uses 13 employee-hours and an office to produce 100 units of output. The price of output is $5,
the wage rate is $10, and rent is $200. The firm will earn a _____ of _____.

answer

Profit; $170

question

Suppose Chip's Chips produces bags of potato chips. An example of a fixed cost for this company would be:

answer

A. a potato peeling machine.
B. the factory building.
C. the deep fryer.
(D. All of these are examples of fixed costs.)

question

f a firm stops production, then its:

answer

variable costs drop to zero.

question

Costs that require a firm to spend money are considered:

answer

Explicit costs.

question

A production function represents:

answer

The relationship between the quantity of inputs and the quantity of outputs.

question

When a firm doubles its inputs, its outpu

answer

A. will double.
B. will less than double.
C. will more than double.
(D. All of these are possible.)

question

The increase in output that is generated by an additional unit of input is call the:

answer

marginal product

question

When economists use standard supply and demand theory, they are assuming that the supply curve describes:

answer

Firms that operate in perfectly competitive markets.

question

A profit-maximizing firm will shut down when:

answer

Total revenues are less than the cost of variable factors of production.

question

Suppose a perfectly competitive firm knows that it is not going to shut down, but it is going to earn a loss. It should pick the output level where:

answer

Price equals marginal cost

1 of 21

question

The most important decision that sellers make is:

answer

whether to produce another unit

question

The primary objective of most private firms is to:

answer

maximize profit.

question

Total revenue minus total explicit and implicit costs defines:

answer

profit

question

The short run is defined as:

answer

a period in which at least one factor of production is fixed.

question

A fixed factor of production:

answer

is fixed only in the short run.

question

A variable factor of production:

answer

is variable in both the short run and the long run.

question

Which of the following factors of production is likely to be fixed in the short run?

answer

The location of the firm.

question

Which of the following is most likely to be a variable factor of production at a university?

answer

The number of teaching assistants.

question

One reason that variable factors of production tend to show diminishing returns in the short run is that:

answer

There are more and more workers using a fixed amount of productive resources.

question

Marginal cost is calculated as:

answer

The change in total costs divided by the change in output.

question

If a firm spends $400 to produce 20 units of output and spends $880 to produce 40 units, then between 20 and 40
units of output, the marginal cost of production is:

answer

$24.

question

Assume that a firm uses 13 employee-hours and an office to produce 100 units of output. The price of output is $5,
the wage rate is $10, and rent is $200. The firm will earn a _____ of _____.

answer

Profit; $170

question

Suppose Chip's Chips produces bags of potato chips. An example of a fixed cost for this company would be:

answer

A. a potato peeling machine.
B. the factory building.
C. the deep fryer.
(D. All of these are examples of fixed costs.)

question

f a firm stops production, then its:

answer

variable costs drop to zero.

question

Costs that require a firm to spend money are considered:

answer

Explicit costs.

question

A production function represents:

answer

The relationship between the quantity of inputs and the quantity of outputs.

question

When a firm doubles its inputs, its outpu

answer

A. will double.
B. will less than double.
C. will more than double.
(D. All of these are possible.)

question

The increase in output that is generated by an additional unit of input is call the:

answer

marginal product

question

When economists use standard supply and demand theory, they are assuming that the supply curve describes:

answer

Firms that operate in perfectly competitive markets.

question

A profit-maximizing firm will shut down when:

answer

Total revenues are less than the cost of variable factors of production.

question

Suppose a perfectly competitive firm knows that it is not going to shut down, but it is going to earn a loss. It should pick the output level where:

answer

Price equals marginal cost

Order an Essay Now & Get These Features For Free:

Place an Order