# Quiz 11: Behind the Supply Curve: Inputs and Costs

Business

Q 1Q 1

A _____ is an organization that produces goods or services for sale.
A)production function
B)firm
C)variable input
D)fixed input

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Multiple Choice

B

Q 2Q 2

In the short run:
A)all inputs are fixed.
B)all inputs are variable.
C)some inputs are fixed and some inputs are variable.
D)all costs are variable.

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Multiple Choice

C

Q 3Q 3

The _____ is the increase in output that is produced when a firm hires an additional worker.
A)average product
B)total product
C)marginal product
D)marginal cost

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Multiple Choice

C

Q 4Q 4

Lauren has 11 people working in her tangerine grove.The marginal product of the eleventh worker is 13 bushels of tangerines.If she hires a twelfth worker,the marginal product of that worker will be _____ bushels.
A)14
B)15
C)12
D)The answer cannot be determined with the information available.

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Multiple Choice

Q 5Q 5

The term diminishing returns refers to a:
A)falling interest rate that can be expected as one's investment in a single asset increases.
B)reduction in profits caused by increasing output beyond the optimal point.
C)decrease in total output due to the firm hiring uneducated workers.
D)decrease in the extra output due to the use of an additional unit of a variable input when all other inputs are held constant.

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Multiple Choice

Q 6Q 6

The idea of diminishing returns to an input in production suggests that,if a local college adds more custodians,the marginal product of labor for the custodial staff will:
A)increase at an increasing rate.
B)increase at a decreasing rate.
C)decrease.
D)not change.

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Multiple Choice

Q 7Q 7

Diminishing returns to an input occur:
A)when all inputs are fixed.
B)when some inputs are fixed and some are variable.
C)when all inputs are variable.
D)only when there are no fixed inputs.

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Multiple Choice

Q 8Q 8

If two firms are identical in all respects except that one has more of the fixed input capital than another,the total product curve for the firm with more capital:
A)must equal the total product curve for the firm with less capital.
B)will lie above the total product curve for the firm with less capital.
C)will lie below the total product curve for the firm with less capital.
D)will show no diminishing marginal returns.

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Multiple Choice

Q 9Q 9

If two firms are identical in all respects except that one has more of the fixed input capital than another,the marginal product curve for the firm with more capital:
A)must equal the marginal product curve for the firm with less capital.
B)will lie above the marginal product curve for the firm with less capital.
C)will lie below the total marginal curve for the firm with less capital.
D)will show no diminishing marginal returns.

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Multiple Choice

Q 10Q 10

Use the following to answer questions 13-15:
-(Figure: Marginal Product of Labor)Use Figure: The Marginal Product of Labor.The total product for three workers is _____ bushels.
A)51
B)45
C)39
D)15

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Multiple Choice

Q 11Q 11

Use the following to answer questions 13-15:
-(Figure: Marginal Product of Labor)Use Figure: The Marginal Product of Labor.The total product of labor for five workers is _____ bushels.
A)11
B)45
C)55
D)75

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Multiple Choice

Q 12Q 12

Use the following to answer questions 13-15:
-(Figure: Marginal Product of Labor)Use Figure: The Marginal Product of Labor.The total product of labor for eight workers is _____ bushels.
A)40
B)35
C)96
D)75

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Multiple Choice

Q 13Q 13

In economics,the short run is defined as:
A)less than 1 year.
B)less than 6 months.
C)the period in which some inputs are considered to be fixed in quantity.
D)the period in which some inputs are fixed,but it cannot exceed 1 year.

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Multiple Choice

Q 14Q 14

In economics,the short run is:
A)less than 1 week.
B)less than 1 month.
C)enough time to vary output but not plant capacity.
D)enough time to change all inputs to production.

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Multiple Choice

Q 15Q 15

An input whose quantity can be changed in the short run is a(n)_____ input.
A)marginal
B)fixed
C)incremental
D)variable

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Multiple Choice

Q 16Q 16

An input whose quantity CANNOT be changed in the short run is:
A)marginal.
B)fixed.
C)incremental.
D)variable.

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Multiple Choice

Q 17Q 17

A fixed input is one:
A)that only exists in nature,and there is only so much of it.
B)that can be used for one thing only.
C)that can never produce more or less in any period.
D)whose quantity cannot be changed in the short run.

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Multiple Choice

Q 18Q 18

The long run is a planning period:
A)over which a firm can consider all inputs as variable.
B)of at least five years.
C)of more than six months.
D)of six months to five years.

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Multiple Choice

Q 19Q 19

In the long run:
A)all inputs are fixed.
B)inputs are neither variable nor fixed.
C)at least one input is variable and one input is fixed.
D)all inputs are variable.

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Multiple Choice

Q 20Q 20

The _____ curve shows the absolute quantities of output that can be obtained from different quantities of a variable input,assuming other inputs are fixed.
A)total input
B)marginal input
C)total product
D)average total quantity

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Multiple Choice

Q 21Q 21

A total product curve indicates the relationship between _____ when all other inputs are fixed.
A)a variable input and price
B)a variable input and variable cost
C)a variable input and output
D)output and price

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Multiple Choice

Q 22Q 22

The marginal product of labor is the:
A)change in labor divided by the change in total product.
B)slope of the total product of labor curve.
C)change in average product divided by the change in the quantity of labor.
D)change in output that occurs when capital increases by one unit.

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Multiple Choice

Q 23Q 23

A farm can produce 1,000 bushels of wheat per year with two workers and 1,300 bushels of wheat per year with three workers.The marginal product of the third worker is _____ bushels.
A)100
B)300
C)1,300
D)2,300

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Multiple Choice

Q 24Q 24

When Caroline's dress factory hires two workers,the total product is 50 dresses.When she hires three workers,total product is 60,and when she hires four workers,total product is 65.The slope of the marginal product curve between two and four workers hired is:
A)positive.
B)zero.
C)infinite.
D)negative.

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Multiple Choice

Q 25Q 25

When Caroline's dress factory hires two workers,the total product is 50 dresses.When she hires three workers,total product is 60,and when she hires four workers,total product is 75.The slope of the marginal product curve between two and four workers hired is:
A)positive.
B)negative.
C)infinite.
D)zero.

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Multiple Choice

Q 26Q 26

When Caroline's dress factory hires two workers,the total product is 50 dresses.When she hires three workers,total product is 48,and when she hires four workers,total product is 45.The marginal product of the third and fourth workers is:
A)increasing and positive.
B)increasing and negative.
C)decreasing and positive.
D)decreasing and negative.

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Multiple Choice

Q 27Q 27

Use the following to answer questions 30-32:
-(Table: Total Product and Marginal Product)Use Table: Total Product and Marginal Product.The marginal product of the second worker is _____ units per period.
A)10
B)15
C)20
D)30

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Multiple Choice

Q 28Q 28

Use the following to answer questions 30-32:
-(Table: Total Product and Marginal Product)Use Table: Total Product and Marginal Product.The marginal product of the fourth worker is _____ units per period.
A)20
B)22.5
C)50
D)90

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Multiple Choice

Q 29Q 29

Use the following to answer questions 30-32:
-(Table: Total Product and Marginal Product)Use Table: Total Product and Marginal Product.Negative marginal returns begin when the _____ worker is added.
A)fifth
B)sixth
C)seventh
D)eighth

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Multiple Choice

Q 30Q 30

Use the following to answer questions 33-39:
-(Figure: The Total Product)Use Figure: The Total Product.Between points A and B the marginal product of labor is:
A)increasing.
B)zero.
C)decreasing.
D)infinite.

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Multiple Choice

Q 31Q 31

Use the following to answer questions 33-39:
-(Figure: The Total Product)Use Figure: The Total Product.Labor added from L

_{1}and up to L_{2}is: A)subject to diminishing marginal returns. B)adding to total product at an increasing rate. C)adding nothing to total product. D)adding to total product at a constant rate.Free

Multiple Choice

Q 32Q 32

Use the following to answer questions 33-39:
-(Figure: The Total Product)Use Figure: The Total Product.As labor is hired between L

_{1}and L_{2},the total product is _____ and the marginal product is _____. A)increasing;positive B)decreasing;zero C)increasing;negative D)increasing;zeroFree

Multiple Choice

Q 33Q 33

Use the following to answer questions 33-39:
-(Figure: The Total Product)Use Figure: The Total Product.For hiring labor between zero and L

_{1},the: A)marginal product of labor is increasing. B)marginal product of labor is decreasing. C)total product is increasing at a diminishing rate. D)total product is decreasing.Free

Multiple Choice

Q 34Q 34

Use the following to answer questions 33-39:
-(Figure: The Total Product)Use Figure: The Total Product.After hiring L

_{2}labor and producing at point B on the total product curve,hiring more labor beyond L_{2}would cause the: A)marginal product of labor to rise. B)marginal product of labor to be negative. C)total product to be negative. D)total product to be zero.Free

Multiple Choice

Q 35Q 35

Use the following to answer questions 33-39:
-(Figure: The Total Product)Use Figure: The Total Product.When L

_{2}labor is hired,the total product is at a _____ and the marginal product of labor is _____. A)minimum;zero B)maximum;zero C)maximum;positive D)minimum;positive but fallingFree

Multiple Choice

Q 36Q 36

Use the following to answer questions 33-39:
-(Figure: The Total Product)Use Figure: The Total Product.If the firm hires more than L

_{2}labor,the total product will _____ because the marginal product of labor is _____. A)decrease;positive B)increase;positive C)decrease;negative D)increase;negativeFree

Multiple Choice

Q 37Q 37

When an additional unit of a variable input adds less to total product than the previous unit,the firm has:
A)increasing returns.
B)diminishing marginal returns.
C)diminishing total returns.
D)diminishing marginal returns and diminishing total returns.

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Multiple Choice

Q 38Q 38

Diminishing marginal returns occur when:
A)each additional unit of a variable factor adds more to total output than the previous unit.
B)each additional unit of a variable factor adds less to total output than the previous unit.
C)the marginal product of a variable factor is increasing at a decreasing rate.
D)total product decreases.

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Multiple Choice

Q 39Q 39

You own a deli.Which input of production is MOST likely fixed at your deli?
A)the dining room
B)the bread used to make sandwiches
C)the tomato sauce used to make soups
D)the employees

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Multiple Choice

Q 40Q 40

You own a deli.Which decision is most likely to be made in the LONG run at your deli?
A)You order more breadsticks.
B)You order more soft drinks for next week.
C)You renovate the second floor of your building to increase the size of the dining room.
D)You advertise for part-time workers.

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Multiple Choice

Q 41Q 41

Once diminishing returns have set in,as output increases,the total cost curve:
A)gets steeper.
B)gets flatter.
C)becomes horizontal.
D)increases at first,and then decreases.

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Multiple Choice

Q 42Q 42

The total cost curve gets steeper as output increases because of:
A)increasing returns to the variable input.
B)decreasing returns to the variable input.
C)increases in fixed cost.
D)decreases in overhead costs.

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Multiple Choice

Q 43Q 43

The change in total output resulting from a one-unit increase in the quantity of an input used,holding the quantities of all other inputs constant,is:
A)average cost.
B)average product.
C)marginal cost.
D)marginal product.

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Multiple Choice

Q 44Q 44

Austin's total fixed cost at the bakery is $3,600 a month.Austin employs 20 workers and pays each worker $8 an hour.The marginal product of the twentieth worker is 12 iced cupcakes an hour.What is the marginal cost of the last cupcake produced by the last worker Austin hired?
A)$0.26
B)$0.66
C)$3.81
D)$8.00

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Multiple Choice

Q 45Q 45

For Heidi,the marginal cost of producing one additional photograph equals the change in _____ cost divided by the change in the _____ of photographs.
A)total;number
B)marginal;number
C)total;marginal product
D)average;number

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Multiple Choice

Q 46Q 46

When a cherry orchard in Oregon adds a worker,the total cost of production increases by $24,000.Adding the worker increases total cherry output by 600 pounds.Therefore,the marginal cost of the last pound of cherries produced is:
A)$40.
B)$19.
C)$4,000.
D)$24,000.

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Multiple Choice

Q 47Q 47

Marginal cost CANNOT be calculated as:
A)TC/Q,where TC is total cost and Q is output.
B)VC/Q,where VC is variable cost and Q is output.
C)the slope of the total cost curve.
D)ATC * Q,where ATC is average total cost and Q is output.

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Multiple Choice

Q 48Q 48

If the marginal cost of producing the seventh sports jersey is $21,then the total cost of seven sports jerseys is:
A)$21.
B)$60.
C)$147.
D)The answer cannot be determined from the information provided.

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Multiple Choice

Q 49Q 49

If Marie Marionettes is operating under conditions of diminishing marginal product,the marginal costs will be:
A)equal to average total cost.
B)decreasing.
C)increasing.
D)constant.

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Multiple Choice

Q 50Q 50

Buford Bus Manufacturing installs a new assembly line.As a result,the output per worker increases.The marginal cost of output at Buford:
A)will increase (the MC curve will shift up).
B)will decrease (the MC curve will shift down).
C)will be unchanged.
D)is at its maximum.

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Multiple Choice

Q 51Q 51

If the marginal cost of the first sports jersey is $21,the marginal cost of the second sports jersey is $40,and the marginal cost of the third jersey is $17,what is the total variable cost of producing three jerseys?
A)$26
B)$78
C)$17
D)$61

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Multiple Choice

Q 52Q 52

The shape of the marginal cost curve is the mirror image of the shape of the _____ curve.
A)total product
B)average product
C)marginal product
D)average total cost

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Multiple Choice

Q 53Q 53

Ashley Bakery expects its marginal cost curve will eventually slope upward because,as with most production processes,baking has:
A)constant opportunity costs.
B)a maximum output.
C)diminishing marginal returns.
D)decreasing opportunity costs.

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Multiple Choice

Q 54Q 54

The _____ curve shows the additional cost of producing each additional unit of output.
A)average cost
B)total cost
C)marginal product
D)marginal cost

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Multiple Choice

Q 55Q 55

Marginal cost is the change in _____ cost resulting from a one-unit change in _____.
A)total;a variable input
B)total;output
C)total;average cost
D)average;output

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Multiple Choice

Q 56Q 56

A firm's marginal cost is:
A)the ratio of the change in total cost to the change in the quantity of output.
B)the change in total cost divided by the change in labor input.
C)the slope of the average fixed cost curve.
D)total cost divided by output.

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Multiple Choice

Q 57Q 57

Marginal cost _____ over the range of increasing marginal returns and _____ over the range of diminishing marginal returns.
A)increases;decreases
B)decreases;increases
C)is constant;decreases
D)increases;is constant

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Multiple Choice

Q 58Q 58

Which statement is FALSE?
A)When the marginal product of labor is upward sloping,the marginal cost curve is upward sloping.
B)The average fixed cost curve is downward sloping and approaches the horizontal axis as output increases.
C)The marginal cost curve intersects the average variable cost curve at the minimum of average variable cost.
D)When the marginal cost curve is above the average cost curve,the average cost curve is upward sloping.

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Multiple Choice

Q 59Q 59

The curve that shows the additional cost of each additional unit of output is called the _____ curve.
A)average cost
B)total cost
C)marginal product
D)marginal cost

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Multiple Choice

Q 60Q 60

Marginal cost is the change in:
A)total product resulting from a one-unit change in a variable input.
B)total cost resulting from a one-unit change in quantity of a variable input.
C)total cost divided by the change in output.
D)average cost resulting from a one-unit change in quantity of output.

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Multiple Choice

Q 61Q 61

The change in total cost resulting from a one-unit change in quantity is _____ cost.
A)average fixed
B)average variable
C)marginal
D)average total

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Multiple Choice

Q 62Q 62

A firm's marginal cost is the:
A)ratio of the change in fixed cost to the change in the quantity of output.
B)slope of the total cost curve.
C)slope of the average variable cost curve.
D)ratio of the change in total output to the change in the quantity of labor.

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Multiple Choice

Q 63Q 63

Marginal cost is the:
A)increase in total cost when one more unit of output is produced.
B)reduction in cost from economies of scale.
C)ratio of average total cost to total cost.
D)increase in output from the addition of one unit of labor.

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Multiple Choice

Q 64Q 64

The larger the output,the more output over which fixed cost is distributed.Called the _____ effect,this leads to a _____ average _____ cost as output rises.
A)spreading;lower;fixed
B)spreading;higher;fixed
C)diminishing returns;lower;variable
D)diminishing returns;higher;variable

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Multiple Choice

Q 65Q 65

The larger the output,the more variable input required to produce additional units.Called the _____ effect,this leads to a _____ average _____ cost as output rises.
A)spreading;lower;fixed
B)spreading;higher;fixed
C)diminishing returns;lower;variable
D)diminishing returns;higher;variable

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Multiple Choice

Q 66Q 66

The average total cost curve has a

_{ }shape because the _____ effect is dominant at low levels of output,and the _____ effect is dominant at high levels of output. A)diminishing returns;spreading B)spreading;diminishing returns C)comparative advantage;absolute advantage D)absolute advantage;comparative advantageFree

Multiple Choice

Q 67Q 67

The rent for Oscar's sporting goods store is $2,500 per month.Oscar pays his staff $9 per hour,and his monthly electricity bill averages $700,depending on his total hours of operation.Oscar's fixed costs of production equal:
A)$2,500 per month.
B)$3,200 per month.
C)$9 per hour multiplied by total hours of work plus $700.
D)$9 per hour multiplied by total hours of work plus $3,200.

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Multiple Choice

Q 68Q 68

Krista's dry-cleaning business incurs $900 per month in fixed costs.Last month her total output was 3,000 pounds of clothes.This month her total output fell to 2,700 pounds.This means her average fixed cost _____ by a little more than _____ cents.
A)fell;3.33
B)increased;3.33
C)fell;2.50
D)increased;2.50

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Multiple Choice

Q 69Q 69

Darren runs a barbershop with average fixed costs of $60 per day and a total output of 50 haircuts per day.Darren shuts down every year during the last week of July and the first week of August (meaning it is open 50 weeks a year).What is his annual fixed cost if he is open six days per week?
A)$18,000
B)$3,000
C)$60
D)The answer cannot be determined with the information available.

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Multiple Choice

Q 70Q 70

The average total cost of producing cell phones in a factory is $20 at the current output level of 100 units per week.If the fixed cost is $1,200 per week:
A)average fixed cost is $20.
B)total cost is $3,200.
C)variable cost is $2,000.
D)average variable cost is $8.

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Multiple Choice

Q 71Q 71

Average variable cost does NOT equal:
A)variable cost divided by output.
B)total cost minus fixed cost divided by output.
C)average total cost minus average fixed cost.
D)variable cost times output.

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Multiple Choice

Q 72Q 72

You run a business producing picture frames.This month,your total cost of production is $10,000,your variable cost of production is $6,000,and you produce 3,000 picture frames.It follows that average _____ cost is _____.
A)variable;$2
B)total;$3
C)total;$1
D)fixed;$1

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Multiple Choice

Q 73Q 73

For most restaurants,the average total cost curve _____ at _____ levels of output,then _____ at _____ levels.
A)falls;low;rises;high
B)rises;low;falls;high
C)rises;high;rises;low
D)falls;high;falls;low

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Multiple Choice

Q 74Q 74

In the short run,the average total cost curve slopes upward because of:
A)economies of scale.
B)diseconomies of scale.
C)increasing returns.
D)diminishing returns.

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Multiple Choice

Q 75Q 75

The _____ cost curve is NOT affected by diminishing returns.
A)average fixed
B)average variable
C)average total
D)marginal

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Multiple Choice

Q 76Q 76

The _____ cost curve continually declines as more output is produced in the short run.
A)marginal
B)average variable
C)average fixed
D)average total

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Multiple Choice

Q 77Q 77

Use the following to answer questions 122-124:
-(Figure: The Average Total Cost Curve)Use Figure: The Average Total Cost Curve.The total cost of producing three pairs of boots is approximately:
A)$24.
B)$72.
C)$75.
D)$216.

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Multiple Choice

Q 78Q 78

Use the following to answer questions 122-124:
-(Figure: The Average Total Cost Curve)Use Figure: The Average Total Cost Curve.The total cost of producing five pairs of boots is approximately:
A)$408.
B)$82.
C)$108.
D)$17.

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Multiple Choice

Q 79Q 79

Use the following to answer questions 122-124:
-(Figure: The Average Total Cost Curve)Use Figure: The Average Total Cost Curve.The total cost of producing 10 pairs of boots is approximately:
A)$13.
B)$54.
C)$131.
D)$1,308.

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Multiple Choice

Q 80Q 80

Average total cost is:
A)the change in cost divided by the change in output.
B)total cost divided by output.
C)the change in output divided by the change in costs.
D)total cost times output.

Free

Multiple Choice

Q 81Q 81

Total cost divided by the quantity of output produced is:
A)average total cost.
B)average fixed cost.
C)average product.
D)marginal cost.

Free

Multiple Choice

Q 82Q 82

Average variable cost is:
A)variable cost per unit multiplied by output.
B)total variable cost divided by output.
C)the difference between average total cost and total variable cost.
D)the difference between total cost and total variable cost.

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Multiple Choice

Q 83Q 83

Average variable cost is the ratio of:
A)total cost to marginal cost.
B)total cost to the amount of variable input.
C)variable cost to the quantity of output.
D)marginal cost to the quantity of output.

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Multiple Choice

Q 84Q 84

A business produces 10 pairs of eyeglasses.It incurs $30 in average variable cost and $5 in average fixed cost.The average total cost of producing 10 pairs of eyeglasses is:
A)$30.
B)$35.
C)$50.
D)$300.

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Multiple Choice

Q 85Q 85

A business produces 10 pairs of eyeglasses.It incurs $35 in average total cost and $5 in average fixed cost.The average variable cost of producing 10 pairs of eyeglasses is:
A)$30.
B)$35.
C)$50.
D)$300.

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Multiple Choice

Q 86Q 86

A business produces 10 pairs of eyeglasses.It incurs $30 in average variable cost and $5 in average fixed cost.The total cost of producing 10 pairs of eyeglasses is:
A)$35.
B)$50.
C)$300.
D)$350.

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Multiple Choice

Q 87Q 87

A business produces 10 pairs of eyeglasses.It incurs $30 in average variable cost and $35 in average total cost.The total fixed cost of producing 10 pairs of eyeglasses is:
A)$3.
B)$35.
C)$50.
D)$300.

Free

Multiple Choice

Q 88Q 88

Average total cost is:
A)the change in variable cost divided by the change in quantity.
B)total cost divided by quantity.
C)the change in quantity divided by the change in labor costs.
D)total cost times quantity.

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Multiple Choice

Q 89Q 89

Average variable cost is:
A)variable cost per unit multiplied by quantity.
B)total variable cost divided by quantity.
C)the difference between average total cost and total cost.
D)the difference between total cost and total fixed cost.

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Multiple Choice

Q 90Q 90

Average total cost is the ratio of _____ cost to _____.
A)total;marginal cost
B)total;quantity of output
C)total;amount of variable input
D)marginal;amount of variable input

Free

Multiple Choice

Q 91Q 91

Total cost divided by the quantity of output produced is:
A)always increasing.
B)always decreasing.
C)average total cost.
D)marginal cost.

Free

Multiple Choice

Q 92Q 92

Average variable cost is the ratio of:
A)total cost to the marginal cost.
B)variable inputs to fixed inputs.
C)variable cost to the quantity of output.
D)fixed costs to variable cost.

Free

Multiple Choice

Q 93Q 93

Variable cost divided by the quantity of output produced is _____ cost.
A)marginal
B)average total
C)average fixed
D)average variable

Free

Multiple Choice

Q 94Q 94

Tankao makes earbuds for mobile devices.When Tankao produces 20 sets of earbuds,its average variable cost is $5 per set and its average total cost is $8 per set.Tankao's:
A)marginal cost is less than $3 per set.
B)marginal cost is $3 per set.
C)average fixed cost is $3 per set.
D)marginal cost is equal to its average fixed cost.

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Multiple Choice

Q 95Q 95

Tankao makes Bluetooth headphones for mobile devices.When 50 Bluetooth headphones are produced in the short run,the average variable cost is $30.Fixed costs are greater than zero.Therefore,Tankao's average _____ cost is _____.
A)total;$30.
B)total;greater than $30.
C)total;less than $30.
D)fixed;$30.

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Multiple Choice

Q 96Q 96

Austin's total fixed cost is $3,600 a month for making 100,000 cupcakes at his cupcake bakery.Austin employs 20 workers and pays each worker $600 a month.If labor is his only variable cost,what is Austin's total cost per month for making 100,000 cupcakes?
A)$3,600
B)$1,200
C)$15,600
D)$12,000

Free

Multiple Choice

Q 97Q 97

When marginal cost is rising:
A)average variable cost must be rising.
B)average total cost must be rising.
C)average variable cost and average total cost must be falling.
D)both average variable cost and average total cost may be rising or falling.

Free

Multiple Choice

Q 98Q 98

When Aishe's Bar-B-Que produces 10 pork sandwiches,the total cost is $5.When 11 pork sandwiches are produced,the total cost rises to $6.From this we know that the marginal cost of the eleventh pork sandwich:
A)is equal to the average cost of 11 pork sandwiches.
B)is greater than the average cost of 11 pork sandwiches.
C)is less than the average cost of 11 pork sandwiches.
D)can't be calculated without more information.

Free

Multiple Choice

Q 99Q 99

Suppose the marginal cost curve in the short run first decreases and then increases.If marginal cost is decreasing,_____ must be _____ and _____ must be _____.
A)marginal product;increasing;average fixed cost;zero
B)average variable cost;decreasing;average fixed cost;increasing
C)average total cost;increasing;marginal cost;decreasing
D)marginal product;increasing;average variable cost;decreasing

Free

Multiple Choice

Q 100Q 100

Suppose the marginal cost curve in the short run first decreases and then increases.If marginal cost is increasing,_____ must be _____.
A)marginal product;increasing
B)average variable cost;increasing
C)average total cost;increasing
D)marginal product;decreasing

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Multiple Choice

Q 101Q 101

At the current level of output,Becca Furniture's marginal cost curve is above the average total cost curve.This means Becca Furniture's average total cost curve:
A)must be rising.
B)must be flat.
C)must be falling.
D)may be rising,falling,or flat depending on other things.

Free

Multiple Choice

Q 102Q 102

The marginal cost curve intersects the average variable cost curve at:
A)its lowest point.
B)its maximum.
C)its end point.
D)no point;the curves don't intersect.

Free

Multiple Choice

Q 103Q 103

When marginal cost is BELOW average variable cost,average variable cost must be:
A)at its minimum.
B)at its maximum.
C)falling.
D)rising.

Free

Multiple Choice

Q 104Q 104

When marginal cost is ABOVE average variable cost,average variable cost must be:
A)at its minimum.
B)at its maximum.
C)falling.
D)rising.

Free

Multiple Choice

Q 105Q 105

If marginal cost is GREATER than average total cost:
A)average total cost is increasing.
B)average total cost is decreasing.
C)average total cost is unchanged.
D)marginal cost is decreasing.

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Multiple Choice

Q 106Q 106

In general,if marginal cost is EQUAL to average total cost:
A)average total cost is increasing.
B)average total cost is at its maximum.
C)average total cost is at its minimum.
D)marginal cost is decreasing.

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Multiple Choice

Q 107Q 107

If an increase in output results in a DECREASE in average total cost,the corresponding marginal cost is:
A)less than average total cost.
B)greater than average total cost.
C)equal to average total cost.
D)negative.

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Multiple Choice

Q 108Q 108

When a caterer produces 30 catered meals,its marginal cost and average variable cost each equal $10.Therefore,assuming normally shaped cost curves,at 29 meals its marginal cost is _____ $10 and its average variable cost is _____ $10.
A)greater than;less than
B)less than;greater than
C)greater than;greater than
D)equal to;equal to

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Multiple Choice

Q 109Q 109

When marginal cost is BELOW average variable cost,average variable cost must be:
A)above average total cost.
B)below average fixed cost.
C)falling.
D)rising.

Free

Multiple Choice

Q 110Q 110

When marginal cost is ABOVE average variable cost,average variable cost must be:
A)at its minimum.
B)at its maximum.
C)greater than average total cost.
D)rising.

Free

Multiple Choice

Q 111Q 111

If marginal cost is GREATER than average total cost,then average total cost is:
A)at its maximum.
B)at its minimum.
C)rising.
D)falling.

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Multiple Choice

Q 112Q 112

If marginal cost is LESS than average total cost,then _____ cost is _____.
A)average total;increasing
B)average total;decreasing
C)marginal;necessarily increasing
D)marginal;necessarily decreasing

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Multiple Choice

Q 113Q 113

Suppose Cyd knows the average total cost of producing 9 scones is $5,while the average total cost of producing 10 scones is $5.20.What is the marginal cost of the tenth scone?
A)$7.00
B)$5.20
C)$0.20
D)$5.00

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Multiple Choice

Q 114Q 114

Use the following to answer question 159:
-(Table: Output and Marginal Cost)Use Table: Output and Marginal Cost.After graduation,you achieve your dream of opening an art shop that specializes in selling mud statues.How many statues should you produce to minimize your average variable costs?
A)two
B)three
C)four
D)five

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Multiple Choice

Q 115Q 115

Kaile Cakes produces 10 cakes per day.The marginal cost of the tenth cake is $24,and average total cost of 10 cakes is $6.The average total cost of 9 cakes is:
A)$4.
B)$5.
C)$6.
D)$8.

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Multiple Choice

Q 116Q 116

Cindy operates Birds-R-Us,a small store manufacturing and selling 100 bird feeders per month.Cindy's monthly total fixed costs are $500,and her monthly total variable costs are $2,500.If for some reason Cindy's fixed cost fell to $400,then her _____ costs would _____.
A)average fixed;increase
B)average total;decrease
C)marginal;decrease
D)average variable;decrease

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Multiple Choice

Q 117Q 117

In the short run,as output gets larger:
A)fixed cost gets smaller.
B)the average variable cost curve gets closer to the average total cost curve.
C)marginal cost gets smaller.
D)average total cost decreases after the point of diminishing returns.

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Multiple Choice

Q 118Q 118

Use the following to answer questions 163-167:
-(Figure and Table: Variable,Fixed,and Total Costs)Use Figure and Table: Variable,Fixed,and Total Costs.The marginal cost of increasing production from 19 to 36 bushels of wheat is:
A)$23.53.
B)$11.76.
C)$22.22.
D)$11.11.

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Multiple Choice

Q 119Q 119

Use the following to answer questions 163-167:
-(Figure and Table: Variable,Fixed,and Total Costs)Use Figure and Table: Variable,Fixed,and Total Costs.The marginal cost of increasing production from 51 to 64 bushels of wheat is:
A)$16.00.
B)$15.38.
C)$12.50.
D)$18.75.

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Multiple Choice

Q 120Q 120

Use the following to answer questions 163-167:
-(Figure and Table: Variable,Fixed,and Total Costs)Use Figure and Table: Variable,Fixed,and Total Costs.The marginal cost of increasing production from 84 to 91 bushels of wheat is:
A)$13.00.
B)$19.78.
C)$22.22.
D)$28.57.

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Multiple Choice

Q 121Q 121

Use the following to answer questions 163-167:
-(Figure and Table: Variable,Fixed,and Total Costs)Use Figure and Table: Variable,Fixed,and Total Costs.When 51 bushels of wheat is produced,the average fixed cost is _____,average variable cost is _____,and average total cost is _____.
A)$7.84;$11.76;$19.60
B)$133.33;$200.00;$333.33
C)$400.00;$600.00;$1,000.00
D)$5.33;$13.33;$18.67

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Multiple Choice

Q 122Q 122

Use the following to answer questions 163-167:
-(Figure and Table: Variable,Fixed,and Total Costs)Use Figure and Table: Variable,Fixed,and Total Costs.When 96 bushels of wheat is produced,the average fixed cost is _____,average variable cost is _____,and average total cost is _____.
A)$7.84;$11.76;$19.60
B)$133.33;$200.00;$333.33
C)$4.17;$16.67;$20.83
D)$5.33;$13.33;$18.67

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Multiple Choice

Q 123Q 123

Use the following to answer questions 168-171:
-(Figure: Short-Run Costs)Use Figure: Short-Run Costs.A is the _____ cost curve.
A)average total
B)average variable
C)marginal
D)total

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Multiple Choice

Q 124Q 124

Use the following to answer questions 168-171:
-(Figure: Short-Run Costs)Use Figure: Short-Run Costs.B is the _____ cost curve.
A)average total
B)average variable
C)marginal
D)total

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Multiple Choice

Q 125Q 125

Use the following to answer questions 168-171:
-(Figure: Short-Run Costs)Use Figure: Short-Run Costs.C is the _____ cost curve.
A)average total
B)total
C)marginal
D)average variable

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Multiple Choice

Q 126Q 126

Use the following to answer questions 168-171:
-(Figure: Short-Run Costs)Use Figure: Short-Run Costs.The vertical difference between curve B and curve C at any quantity of output is _____ cost.
A)marginal
B)fixed
C)average fixed
D)average variable

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Multiple Choice

Q 127Q 127

Use the following to answer questions 172-179:
-(Figure: Short-Run Costs II)Use Figure: Short-Run Costs II.Curve 1 is the _____ cost curve.
A)average total
B)average variable
C)marginal
D)total

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Multiple Choice

Q 128Q 128

Use the following to answer questions 172-179:
-(Figure: Short-Run Costs II)Use Figure: Short-Run Costs II.Curve 2 is the _____ cost curve.
A)average total
B)average variable
C)marginal
D)total

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Multiple Choice

Q 129Q 129

Use the following to answer questions 172-179:
-(Figure: Short-Run Costs II)Use Figure: Short-Run Costs II.Curve 3 is the _____ cost curve.
A)average total
B)total
C)marginal
D)average variable

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Multiple Choice

Q 130Q 130

Use the following to answer questions 172-179:
-(Figure: Short-Run Costs II)Use Figure: Short-Run Costs II.Curve 1 crosses the average variable cost curve at:
A)3 units of output.
B)approximately 5.3 units of output.
C)the minimum value of curve 2.
D)the level of output at which diminishing marginal returns begin.

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Multiple Choice

Q 131Q 131

Use the following to answer questions 172-179:
-(Figure: Short-Run Costs II)Use Figure: Short-Run Costs II.Curve 1 crosses the average total cost curve at:
A)the minimum value of curve 2.
B)approximately 4.3 units of output.
C)approximately 2.8 units of output.
D)point A.

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Multiple Choice

Q 132Q 132

Use the following to answer questions 172-179:
-(Figure: Short-Run Costs II)Use Figure: Short-Run Costs II.At 6 units of output,marginal cost is approximately:
A)$100.
B)$120.
C)$250.
D)$200.

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Multiple Choice

Q 133Q 133

Use the following to answer questions 172-179:
-(Figure: Short-Run Costs II)Use Figure: Short-Run Costs II.At 6 units of output,average total cost is approximately:
A)$100.
B)$120.
C)$170.
D)$250.

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Multiple Choice

Q 134Q 134

Use the following to answer questions 172-179:
-(Figure: Short-Run Costs II)Use Figure: Short-Run Costs II.At 6 units of output,average variable cost is approximately:
A)$100.
B)$120.
C)$200.
D)$250.

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Multiple Choice

Q 135Q 135

Use the following to answer questions 180-193:
-(Table: Cost Data)Use Table: Cost Data.When the purse factory produces 5 units of output (purses):
A)marginal cost is above average total cost,and average total cost is rising.
B)average total cost is above average variable cost,and average variable cost is falling.
C)marginal cost is below average variable cost,and average variable cost is falling.
D)marginal cost is above average variable cost and below average total cost,and average total cost is rising.

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Multiple Choice

Q 136Q 136

Use the following to answer questions 180-193:
-(Table: Cost Data)Use Table: Cost Data.The average variable cost of producing 2 purses is:
A)$190.
B)$70.
C)$50.
D)$35.

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Multiple Choice

Q 137Q 137

Use the following to answer questions 180-193:
-(Table: Cost Data)Use Table: Cost Data.The average fixed cost of producing 2 purses is:
A)$0.
B)$50.
C)$25.
D)$2.

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Multiple Choice

Q 138Q 138

Use the following to answer questions 180-193:
-(Table: Cost Data)Use Table: Cost Data.The average total cost of producing 2 purses is:
A)$60.
B)$120.
C)$190.
D)$220.

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Multiple Choice

Q 139Q 139

Use the following to answer questions 180-193:
-(Table: Cost Data)Use Table: Cost Data.The marginal cost of producing the second purse is:
A)$60.
B)$50.
C)$35.
D)$20.

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Multiple Choice

Q 140Q 140

Use the following to answer questions 180-193:
-(Table: Cost Data)Use Table: Cost Data.The average variable cost of producing 4 purses is:
A)$190.00.
B)$140.00.
C)$47.50.
D)$35.00.

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Multiple Choice

Q 141Q 141

Use the following to answer questions 180-193:
-(Table: Cost Data)Use Table: Cost Data.The average fixed cost of producing 4 purses is:
A)$12.50.
B)$47.50.
C)$50.00.
D)$82.50.

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Multiple Choice

Q 142Q 142

Use the following to answer questions 180-193:
-(Table: Cost Data)Use Table: Cost Data.The average total cost of producing 4 purses is:
A)$12.50.
B)$47.50.
C)$50.00.
D)$82.50.

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Multiple Choice

Q 143Q 143

Use the following to answer questions 180-193:
-(Table: Cost Data)Use Table: Cost Data.The marginal cost of producing the fourth purse is:
A)$60.
B)$50.
C)$40.
D)$20.

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Multiple Choice

Q 144Q 144

Use the following to answer questions 180-193:
-(Table: Cost Data)Use Table: Cost Data.The average total cost of producing 6 purses is:
A)$190.
B)$70.
C)$50.
D)$35.

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Multiple Choice

Q 145Q 145

Use the following to answer questions 180-193:
-(Table: Cost Data)Use Table: Cost Data.The average fixed cost of producing 5 purses is:
A)$0.
B)$50.
C)$25.
D)$10.

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Multiple Choice

Q 146Q 146

Use the following to answer questions 180-193:
-(Table: Cost Data)Use Table: Cost Data.The average variable cost of producing 5 purses is:
A)$10.
B)$38.
C)$48.
D)$190.

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Multiple Choice

Q 147Q 147

Use the following to answer questions 180-193:
-(Table: Cost Data)Use Table: Cost Data.The average total cost of producing 5 purses is:
A)$10.
B)$38.
C)$48.
D)$240.

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Multiple Choice

Q 148Q 148

Use the following to answer questions 180-193:
-(Table: Cost Data)Use Table: Cost Data.The marginal cost of producing the fifth purse is:
A)$60.
B)$50.
C)$35.
D)$20.

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Multiple Choice

Q 149Q 149

Use the following to answer questions 194-196:
-(Figure: A Firm's Cost Curves)Use Figure: A Firm's Cost Curves.The curve labeled V represents the firm's _____ cost curve.
A)total
B)average total
C)marginal
D)average variable

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Multiple Choice

Q 150Q 150

Use the following to answer questions 194-196:
-(Figure: A Firm's Cost Curves)Use Figure: A Firm's Cost Curves.The curve labeled W represents the firm's _____ cost curve.
A)average fixed
B)average total
C)average variable
D)total variable

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Multiple Choice

Q 151Q 151

Use the following to answer questions 194-196:
-(Figure: A Firm's Cost Curves)Use Figure: A Firm's Cost Curves.The curve X represents the firm's _____ cost curve.
A)marginal
B)average total
C)average fixed
D)average variable

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Multiple Choice

Q 152Q 152

The long-run average total cost curve is tangent to an infinite number of short-run _____ cost curves.
A)total
B)marginal
C)average variable
D)average total

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Multiple Choice

Q 153Q 153

Where the long-run average total cost curve is at its lowest point,it is tangent to the _____ of the corresponding short-run average total cost curve.
A)minimum
B)maximum
C)right of the minimum
D)left of the minimum

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Multiple Choice

Q 154Q 154

At quantities less than the long-run minimum cost per unit of output,the long-run average total cost curve is _____ of the corresponding short-run average total cost curve.
A)tangent to the minimum
B)tangent to the maximum
C)to the right of the minimum
D)to the left of the minimum

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Multiple Choice

Q 155Q 155

At quantities greater than the long-run minimum cost per unit of output,the long-run average total cost curve is _____ of the corresponding short-run average total cost curve.
A)tangent to the minimum
B)tangent to the maximum
C)to the right of the minimum
D)to the left of the minimum

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Multiple Choice

Q 156Q 156

(Figure: Long-Run and Short-Run Average Cost Curves)Use Figure: Long-Run and Short-Run Average Cost Curves.If a firm faced the long-run average total cost curve shown in the figure and it expected to produce 100,000 units of the good in the long run,the firm should build the plant associated with: Ref 11-18 Figure: Long-Run and Short-Run Average Cost Curves
A)ATC

_{1}. B)ATC_{2}. C)ATC_{3}. D)ATC_{1}or ATC_{2}.Free

Multiple Choice

Q 157Q 157

(Figure: Long-Run and Short-Run Average Cost Curves)Use Figure: Long-Run and Short-Run Average Cost Curves.If a firm is producing at point C on the ATC

_{2}but anticipates increasing output to 225,000 units in the long run,the firm will build a _____ plant and have _____ of scale. A)smaller;economies B)smaller;diseconomies C)bigger;economies D)bigger;diseconomiesFree

Multiple Choice

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Multiple Choice

Q 159Q 159

In the long run:
A)all factors are fixed.
B)all factors are variable.
C)production choices are more limited than in the short run.
D)production is always greater than zero.

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Multiple Choice

Q 160Q 160

When a firm adds physical capital,in the short run fixed costs will:
A)increase.
B)decrease.
C)remain the same.
D)decrease at first and then increase.

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Multiple Choice

Q 161Q 161

When a firm adds capital,in the short run workers will be:
A)less productive and let the machines do most of the work.
B)more productive,since they have more equipment.
C)at the same level of productivity.
D)more productive at first and then less productive after a few weeks.

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Multiple Choice

Q 162Q 162

When a firm adds capital,in the short run variable costs for any level of output will:
A)increase.
B)decrease.
C)remain the same.
D)increase at first and then decrease.

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Multiple Choice

Q 163Q 163

Use the following to answer questions 208-234:
-(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 1 mixer and bakes 100 cakes per day,what is her average fixed cost?
A)$10,000
B)$1,000
C)$15
D)$10

Free

Multiple Choice

Q 164Q 164

Use the following to answer questions 208-234:
-(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 1 mixer and bakes 100 cakes per day,what is her average total cost?
A)$1,010
B)$20
C)$15
D)$10

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Multiple Choice

Q 165Q 165

Use the following to answer questions 208-234:
-(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 1 mixer and bakes 200 cakes per day,what is her average fixed cost?
A)$5
B)$10
C)$200
D)$1,000

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Multiple Choice

Q 166Q 166

Use the following to answer questions 208-234:
-(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 1 mixer and bakes 200 cakes per day,what is her average total cost?
A)$5
B)$15
C)$200
D)$1,000

Free

Multiple Choice

Q 167Q 167

Use the following to answer questions 208-234:
-(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 1 mixer and bakes 400 cakes per day,what is her average fixed cost?
A)$0.025
B)$2.50
C)$1,000
D)$400,000

Free

Multiple Choice

Q 168Q 168

Use the following to answer questions 208-234:
-(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 1 mixer and bakes 400 cakes per day,what is her average total cost?
A)$2.50
B)$10
C)$12.50
D)$1,010

Free

Multiple Choice

Q 169Q 169

Use the following to answer questions 208-234:
-(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 1 mixer,her average fixed cost _____ in the range of output between 100 and 400 cakes.
A)increases
B)decreases
C)remains the same
D)can't be calculated

Free

Multiple Choice

Q 170Q 170

Use the following to answer questions 208-234:
-(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 1 mixer,her average total cost _____ in the range of output between 100 and 400 cakes.
A)increases
B)decreases
C)remains the same
D)can't be calculated

Free

Multiple Choice

Q 171Q 171

Use the following to answer questions 208-234:
-(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 2 mixers and bakes 100 cakes per day,what is her average fixed cost?
A)$10,000
B)$1,000
C)$15
D)$10

Free

Multiple Choice

Q 172Q 172

Use the following to answer questions 208-234:
-(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 2 mixers and bakes 100 cakes per day,what is her average total cost?
A)$8
B)$10
C)$15
D)$22

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Multiple Choice

Q 173Q 173

Use the following to answer questions 208-234:
-(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 2 mixers and bakes 200 cakes per day,what is her average fixed cost?
A)$300,000
B)$1,508
C)$187.50
D)$7.50

Free

Multiple Choice

Q 174Q 174

Use the following to answer questions 208-234:
-(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 2 mixers and bakes 200 cakes per day,what is her average total cost?
A)$8
B)$14.50
C)$1,492
D)$1,508

Free

Multiple Choice

Q 175Q 175

Use the following to answer questions 208-234:
-(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 2 mixers and bakes 400 cakes per day,what is her average fixed cost?
A)$0.02
B)$3.75
C)$500
D)$1,508

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Multiple Choice

Q 176Q 176

Use the following to answer questions 208-234:
-(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 2 mixers and bakes 400 cakes per day,what is her average total cost?
A)$0.02
B)$10.75
C)$500
D)$1,507

Free

Multiple Choice

Q 177Q 177

Use the following to answer questions 208-234:
-(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 2 mixers,her average fixed cost _____ in the range of output between 100 and 400 cakes.
A)increases
B)decreases
C)remains the same
D)can't be calculated

Free

Multiple Choice

Q 178Q 178

Use the following to answer questions 208-234:
-(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 2 mixers,her average total cost _____ in the range of output between 100 and 400 cakes.
A)increases
B)decreases
C)remains the same
D)can't be calculated

Free

Multiple Choice

Q 179Q 179

Use the following to answer questions 208-234:
-(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 3 mixers and bakes 100 cakes per day,what is her average fixed cost?
A)$4
B)$25
C)$2,496
D)$10,000

Free

Multiple Choice

Q 180Q 180

Use the following to answer questions 208-234:
-(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 3 mixers and bakes 100 cakes per day,what is her average total cost?
A)$4
B)$25
C)$29
D)$625

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Multiple Choice

Q 181Q 181

Use the following to answer questions 208-234:
-(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 3 mixers and bakes 200 cakes per day,what is her average fixed cost?
A)$0.05
B)$2.50
C)$5.00
D)$12.50

Free

Multiple Choice

Q 182Q 182

Use the following to answer questions 208-234:
-(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 3 mixers and bakes 200 cakes per day,what is her average total cost?
A)$50.00
B)$12.50
C)$16.50
D)$800.00

Free

Multiple Choice

Q 183Q 183

Use the following to answer questions 208-234:
-(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 3 mixers and bakes 400 cakes per day,what is her average fixed cost?
A)$0.05
B)$2.50
C)$5.00
D)$6.25

Free

Multiple Choice

Q 184Q 184

Use the following to answer questions 208-234:
-(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 3 mixers and bakes 400 cakes per day,what is her average total cost?
A)$10.25
B)$12.50
C)$16.50
D)$2,504.00

Free

Multiple Choice

Q 185Q 185

Use the following to answer questions 208-234:
-(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 3 mixers,her average fixed cost _____ in the range of output between 100 and 400 cakes.
A)increases
B)decreases
C)remains the same
D)can't be calculated

Free

Multiple Choice

Q 186Q 186

Use the following to answer questions 208-234:
-(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 3 mixers,her average total cost _____ in the range of output between 100 and 400 cakes.
A)increases
B)decreases
C)remains the same
D)can't be calculated

Free

Multiple Choice

Q 187Q 187

Use the following to answer questions 208-234:
-(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.How many mixers should Pat buy to get the lowest average total cost if she plans to make 100 cakes?
A)1
B)2
C)3
D)Can't be determined without more information

Free

Multiple Choice

Q 188Q 188

Use the following to answer questions 208-234:
-(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.How many mixers should Pat buy to get the lowest average total cost if she plans to make 200 cakes?
A)1
B)2
C)3
D)Can't be determined without more information

Free

Multiple Choice

Q 189Q 189

Use the following to answer questions 208-234:
-(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.How many mixers should Pat buy to get the lowest average total cost if she plans to make 400 cakes?
A)1
B)2
C)3
D)Can't be determined without more information

Free

Multiple Choice

Q 190Q 190

The long-run average cost curve will be upward-sloping when the firm has:
A)economies of scale.
B)diseconomies of scale.
C)constant returns to scale.
D)diminishing returns.

Free

Multiple Choice

Q 191Q 191

Use the following to answer question 236:
-(Table: Long-Run Total Cost)Use Table: Long-Run Total Cost.This soybean grower receives constant returns to scale over the _____ and _____ bushels.
A)first;second
B)third;fourth
C)fourth;fifth
D)fifth;sixth

Free

Multiple Choice

Q 192Q 192

When an increase in the firm's output reduces its long-run average total cost,it achieves _____ scale.
A)economies of
B)diseconomies of
C)constant returns to
D)variable returns to

Free

Multiple Choice

Q 193Q 193

A university that benefits from lower costs per enrolled student as it builds more buildings and enrolls more students is an example of a service provider with:
A)economies of scale.
B)diseconomies of scale.
C)increasing opportunity costs.
D)scale reduction.

Free

Multiple Choice

Q 194Q 194

The slope of a long-run average total cost curve exhibiting diseconomies of scale is:
A)zero.
B)infinite.
C)positive.
D)negative.

Free

Multiple Choice

Q 195Q 195

When diseconomies of scale occur:
A)long-run average cost rises.
B)marginal cost declines.
C)average total cost declines.
D)average variable cost declines.

Free

Multiple Choice

Q 196Q 196

Use the following to answer questions 241-245:
-(Figure: Long-Run Average Cost)Use Figure: Long-Run Average Cost.This firm has _____ in the output region from 0 to A.
A)diseconomies of scale
B)constant returns to scale
C)economies of scale
D)negative costs of production

Free

Multiple Choice

Q 197Q 197

Use the following to answer questions 241-245:
-(Figure: Long-Run Average Cost)Use Figure: Long-Run Average Cost.This firm has _____ in the output region from A to B.
A)constant returns to scale
B)economies of scale
C)diseconomies of scale
D)constant total cost as output increases

Free

Multiple Choice

Q 198Q 198

Use the following to answer questions 241-245:
-(Figure: Long-Run Average Cost)Use Figure: Long-Run Average Cost.This firm has _____ in the output region from B to C.
A)constant returns to scale
B)diseconomies of scale
C)economies of scale
D)falling marginal cost

Free

Multiple Choice

Q 199Q 199

Use the following to answer questions 241-245:
-(Figure: Long-Run Average Cost)Use Figure: Long-Run Average Cost.This firm has _____ in the output region from 0 to A.
A)decreasing returns to scale
B)constant returns to scale
C)increasing returns to scale
D)negative costs of production

Free

Multiple Choice

Q 200Q 200

Use the following to answer questions 241-245:
-(Figure: Long-Run Average Cost)Use Figure: Long-Run Average Cost.This firm has _____ in the output region from B to C.
A)constant returns to scale
B)decreasing returns to scale
C)increasing returns to scale
D)falling marginal cost

Free

Multiple Choice

Q 201Q 201

A firm that is able to use its inputs more efficiently as it increases production in the long run BEST demonstrates:
A)economies of scale.
B)diseconomies of scale.
C)labor-intensive production.
D)capital-intensive production.

Free

Multiple Choice

Q 202Q 202

A firm that has diminishing returns in the management's ability to use and disseminate information as it increases production in the long run BEST demonstrates:
A)economies of scale.
B)diseconomies of scale.
C)being too small for the relevant market.
D)not having enough managers.

Free

Multiple Choice

Q 203Q 203

It is common in large breweries for the long-run average total cost to decline as output increases.This indicates that many breweries operate with:
A)diseconomies of scale.
B)diminishing marginal returns.
C)economies of scale.
D)constant returns to scale.

Free

Multiple Choice

Q 204Q 204

Buffalo Aircraft doubles the amount of all of the inputs it uses-the factory doubles in size and twice as many workers are hired.After this expansion,the number of aircraft produced triples.If the price of inputs is unchanged,this means that Buffalo Aircraft is operating with:
A)increasing marginal cost.
B)economies of scale.
C)increasing average total cost.
D)decreasing average variable cost.

Free

Multiple Choice

Q 205Q 205

The long-run average total cost of producing 100 units of output is $4,while the long-run average cost of producing 110 units of output is $4.These numbers suggest that between 100 and 110 units of output,the firm producing this output has:
A)economies of scale.
B)diseconomies of scale.
C)constant returns to scale.
D)diminishing returns.

Free

Multiple Choice

Q 206Q 206

The -shape of the long-run average total cost curve is primarily due to:
A)technological change.
B)economies and diseconomies of scale.
C)fixed costs.
D)diminishing returns.

Free

Multiple Choice

Q 207Q 207

When an increase in the firm's output reduces its long-run average total cost,it has _____ returns to scale.
A)increasing
B)decreasing
C)constant
D)variable

Free

Multiple Choice

Q 208Q 208

If your firm is operating in the negatively sloped portion of a long-run average total cost curve,then your production exhibits:
A)higher wages.
B)increasing returns to scale.
C)decreasing returns to scale.
D)increased input prices.

Free

Multiple Choice

Q 209Q 209

A manufacturing company that benefits from lower costs per unit as it grows is an example of a firm exhibiting:
A)increasing returns to scale.
B)decreasing returns to scale.
C)increasing opportunity costs.
D)scale reduction.

Free

Multiple Choice

Q 210Q 210

A firm that has lower costs per unit as it increases production in the long run has:
A)increasing returns to scale.
B)decreasing returns to scale.
C)increasing opportunity costs.
D)scale reduction.

Free

Multiple Choice

Q 211Q 211

The slope of a long-run average total cost curve exhibiting decreasing returns to scale is:
A)zero.
B)infinite.
C)positive.
D)negative.

Free

Multiple Choice

Q 212Q 212

Decreasing and increasing returns to scale account for the shape of the:
A)short-run average total cost curve.
B)short-run average variable cost curve.
C)long-run average total cost curve.
D)marginal cost curve in both the short run and the long run.

Free

Multiple Choice

Q 213Q 213

The slope of a long-run average total cost curve exhibiting increasing returns to scale is:
A)zero.
B)infinite.
C)positive.
D)negative.

Free

Multiple Choice

Q 214Q 214

Use the following to answer questions 259-266:
-(Table: Workers and Output)Use Table: Workers and Output.After graduation,you achieve your dream of opening an art shop that specializes in selling mud statues.You pay $10 per day on a loan from your uncle,regardless of how much you produce.You also pay $10 per day to each of the workers who you hire to make the mud statues.The fixed cost of producing 25 statues is:
A)$10.
B)$20.
C)$25.
D)$35.

Free

Multiple Choice

Q 215Q 215

Use the following to answer questions 259-266:
-(Table: Workers and Output)Use Table: Workers and Output.After graduation,you achieve your dream of opening an art shop that specializes in selling mud statues.You pay $10 per day on a loan from your uncle,regardless of how much you produce.You also pay $10 per day to each of the workers who you hire to make the mud statues.The variable cost of producing 25 statues is:
A)$10.
B)$20.
C)$25.
D)$35.

Free

Multiple Choice

Q 216Q 216

Use the following to answer questions 259-266:
-(Table: Workers and Output)Use Table: Workers and Output.After graduation,you achieve your dream of opening an art shop that specializes in selling mud statues.You pay $10 per day on a loan from your uncle,regardless of how much you produce.You also pay $10 per day to each of the workers who you hire to make the mud statues.The total cost of producing 25 statues is:
A)$10.
B)$20.
C)$25.
D)$30.

Free

Multiple Choice

Q 217Q 217

Use the following to answer questions 259-266:
-(Table: Workers and Output)Use Table: Workers and Output.After graduation,you achieve your dream of opening an art shop that specializes in selling mud statues.You pay $10 per day on a loan from your uncle,regardless of how much you produce.You also pay $10 per day to each of the workers who you hire to make the mud statues.The variable cost of producing 43 statues is:
A)$10.
B)$20.
C)$40.
D)$43.

Free

Multiple Choice

Q 218Q 218

Use the following to answer questions 259-266:
-(Table: Workers and Output)Use Table: Workers and Output.After graduation,you achieve your dream of opening an art shop that specializes in selling mud statues.You pay $10 per day on a loan from your uncle,regardless of how much you produce.You also pay $10 per day to each of the workers who you hire to make the mud statues.The total cost of producing 43 statues is:
A)$10.
B)$20.
C)$40.
D)$50.

Free

Multiple Choice

Q 219Q 219

Use the following to answer questions 259-266:
-(Table: Workers and Output)Use Table: Workers and Output.After graduation,you achieve your dream of opening an art shop that specializes in selling mud statues.You pay $10 per day on a loan from your uncle,regardless of how much you produce.You also pay $10 per day to each of the workers who you hire to make the mud statues.The variable cost of producing 48 statues is:
A)$50.
B)$48.
C)$20.
D)$10.

Free

Multiple Choice

Q 220Q 220

Use the following to answer questions 259-266:
-(Table: Workers and Output)Use Table: Workers and Output.After graduation,you achieve your dream of opening an art shop that specializes in selling mud statues.You pay $10 per day on a loan from your uncle,regardless of how much you produce.You also pay $10 per day to each of the workers who you hire to make the mud statues.The total cost of producing 48 statues is:
A)$240.
B)$60.
C)$50.
D)$10.

Free

Multiple Choice

Q 221Q 221

Use the following to answer questions 259-266:
-(Table: Workers and Output)Use Table: Workers and Output.After graduation,you achieve your dream of opening an art shop that specializes in selling mud statues.You pay $10 per day on a loan from your uncle,regardless of how much you produce.You also pay $10 per day to each of the workers who you hire to make the mud statues.How many workers should you hire to minimize your marginal cost?
A)two
B)three
C)four
D)five

Free

Multiple Choice

Q 222Q 222

Use the following to answer questions 259-266:
-(Table: Output and Costs)Use Table: Output and Costs.When output increases from 1 to 2,marginal cost equals:
A)$13.
B)$10.
C)$8.
D)$17.

Free

Multiple Choice

Q 223Q 223

Use the following to answer questions 259-266:
-(Table: Output and Costs)Use Table: Output and Costs.When output is 4,total variable cost equals:
A)$48.
B)$38.
C)$58.
D)$28.

Free

Multiple Choice

Q 224Q 224

Use the following to answer questions 259-266:
-(Table: Output and Costs)Use Table: Output and Costs.When output is 3,average total cost equals:
A)$13.
B)$10.
C)$8.
D)$17.

Free

Multiple Choice

Q 225Q 225

Use the following to answer questions 270-273:
-(Table: Costs of Producing Bagels)Use Table: Cost of Producing Bagels.The total cost of producing 6 bagels is:
A)$0.10.
B)$0.20.
C)$0.80.
D)$0.90.

Free

Multiple Choice

Q 226Q 226

Use the following to answer questions 270-273:
-(Table: Costs of Producing Bagels)Use Table: Cost of Producing Bagels.The marginal cost of producing the sixth bagel is:
A)$0.10.
B)$0.15.
C)$0.20.
D)$0.80.

Free

Multiple Choice

Q 227Q 227

Use the following to answer questions 270-273:
-(Table: Costs of Producing Bagels)Use Table: Cost of Producing Bagels.Marginal cost reaches its minimum value for the _____ bagel.
A)first
B)third
C)fourth
D)fifth

Free

Multiple Choice

Q 228Q 228

Use the following to answer questions 270-273:
-(Table: Costs of Producing Bagels)Use Table: Cost of Producing Bagels.Average total cost reaches its minimum value for the _____ bagel.
A)first
B)third
C)fourth
D)fifth

Free

Multiple Choice

Q 229Q 229

Use the following to answer questions 270-273:
-(Table: Costs of Producing Bagels)Use Table: Cost of Producing Bagels.The average total cost of producing 6 bagels is:
A)$0.10.
B)$0.15.
C)$0.20.
D)$0.80.

Free

Multiple Choice

Q 230Q 230

Use the following to answer questions 270-273:
-(Table: Costs of Producing Bagels)Use Table: Cost of Producing Bagels.The total cost of producing 2 bagels is:
A)$0.10.
B)$0.20.
C)$0.40.
D)$0.50.

Free

Multiple Choice

Q 231Q 231

Use the following to answer questions 270-273:
-(Table: Costs of Producing Bagels)Use Table: Cost of Producing Bagels.The average total cost of producing 2 bagels is:
A)$0.05.
B)$0.10.
C)$0.20.
D)$0.40.

Free

Multiple Choice

Q 232Q 232

Use the following to answer questions 270-273:
-(Table: Costs of Producing Bagels)Use Table: Cost of Producing Bagels.The marginal cost of producing the second bagel is:
A)$0.05.
B)$0.10.
C)$0.30.
D)$0.40.

Free

Multiple Choice

Q 233Q 233

Use the following to answer questions 278-292:
-(Table: Costs of Birthday Cakes)Use Table: Costs of Birthday Cakes.Assume that fixed costs are $10.What is the average variable cost of 2 cakes?
A)$40.00
B)$35.00
C)$25.00
D)$12.50

Free

Multiple Choice

Q 234Q 234

Use the following to answer questions 278-292:
-(Table: Costs of Birthday Cakes)Use Table: Costs of Birthday Cakes.Assume that fixed costs are $10.What is the average fixed cost of 2 cakes?
A)$5
B)$10
C)$25
D)$30

Free

Multiple Choice

Q 235Q 235

Use the following to answer questions 278-292:
-(Table: Costs of Birthday Cakes)Use Table: Costs of Birthday Cakes.Assume that fixed costs are $10.What is the average total cost of 2 cakes?
A)$35.00
B)$25.00
C)$17.50
D)$12.50

Free

Multiple Choice

Q 236Q 236

Use the following to answer questions 278-292:
-(Table: Costs of Birthday Cakes)Use Table: Costs of Birthday Cakes.Assume that fixed costs are $10.What is the marginal cost of the second cake?
A)$5
B)$10
C)$25
D)$35

Free

Multiple Choice

Q 237Q 237

Use the following to answer questions 278-292:
-(Table: Costs of Birthday Cakes)Use Table: Costs of Birthday Cakes.Assume that fixed costs are $10.What is the average variable cost of 4 cakes?
A)$38.00
B)$10.00
C)$9.50
D)$8.00

Free

Multiple Choice

Q 238Q 238

Use the following to answer questions 278-292:
-(Table: Costs of Birthday Cakes)Use Table: Costs of Birthday Cakes.Assume that fixed costs are $10.What is the average fixed cost of 4 cakes?
A)$48.00
B)$10.00
C)$5.00
D)$2.50

Free

Multiple Choice

Q 239Q 239

Use the following to answer questions 278-292:
-(Table: Costs of Birthday Cakes)Use Table: Costs of Birthday Cakes.Assume that fixed costs are $10.What is the average total cost of 4 cakes?
A)$35.00
B)$25.00
C)$9.50
D)$12.00

Free

Multiple Choice

Q 240Q 240

Use the following to answer questions 278-292:
-(Table: Costs of Birthday Cakes)Use Table: Costs of Birthday Cakes.Assume that fixed costs are $10.What is the marginal cost of the fourth cake?
A)$8
B)$10
C)$25
D)$35

Free

Multiple Choice

Q 241Q 241

Use the following to answer questions 278-292:
-(Table: Costs of Birthday Cakes)Use Table: Costs of Birthday Cakes.Assume that fixed costs are $10.What is the average variable cost of 5 cakes?
A)$300
B)$250
C)$50
D)$10

Free

Multiple Choice

Q 242Q 242

Use the following to answer questions 278-292:
-(Table: Costs of Birthday Cakes)Use Table: Costs of Birthday Cakes.Assume that fixed costs are $10.What is the average fixed cost of 5 cakes?
A)$1
B)$2
C)$5
D)$10

Free

Multiple Choice

Q 243Q 243

Use the following to answer questions 278-292:
-(Table: Costs of Birthday Cakes)Use Table: Costs of Birthday Cakes.Assume that fixed costs are $10.What is the average total cost of 5 cakes?
A)$110
B)$60
C)$12
D)$2

Free

Multiple Choice

Q 244Q 244

Use the following to answer questions 278-292:
-(Table: Costs of Birthday Cakes)Use Table: Costs of Birthday Cakes.Assume that fixed costs are $10.What is the marginal cost of the fifth cake?
A)$2
B)$10
C)$12
D)$20

Free

Multiple Choice

Q 245Q 245

Farmers in the United States grow about three times as much wheat per acre as do farmers in Western Europe.

Free

True False

Q 246Q 246

Scott operates a business that takes people on boat tours in Crystal River,Florida.The amount of fuel Scott uses each day is a variable input.

Free

True False

Free

True False

Q 248Q 248

Joan adds one more employee to her construction company.The additional output produced by this employee represents the average product of this employee.

Free

True False

Q 249Q 249

The total product curve for the Wallmark Greeting Card Company shows how the quantity of output depends on the quantity of the variable input for a given amount of the fixed inputs.

Free

True False

Free

True False

Q 251Q 251

As more labor is added to a fixed amount of capital,eventually the marginal product of labor decreases.

Free

True False

Free

True False

Q 253Q 253

As a firm increases production in the short run,the marginal cost of output increases because the marginal product of the variable input decreases.

Free

True False

Q 254Q 254

The short-run average total cost curve is U-shaped because at low output levels the spreading effect of falling average fixed costs dominates the diminishing returns effect,while at high output levels the reverse is true.

Free

True False

Q 255Q 255

In the short run,and with nonzero fixed costs,the average total cost curve always lies above the average variable cost curve.

Free

True False

Q 256Q 256

If the average total cost curve and the average variable cost curve are both U-shaped,and fixed costs are nonzero,then the minimum point of the average total cost curve must lie above the minimum point of the average variable cost curve.

Free

True False

Free

True False

Q 258Q 258

In the short run,if marginal cost is higher than average total cost,producing an extra unit of output must raise average total cost.

Free

True False

Q 259Q 259

In the short run,the average total cost curve reaches its minimum point at a lower level of output than the short-run marginal cost curve reaches its minimum.

Free

True False

Q 260Q 260

In some complex production processes,such as nuclear power plants,some inputs have to be treated as being fixed even in the long run.

Free

True False

Free

True False

Q 262Q 262

Firms choose their level of fixed cost in the long run based on the amount of output that they expect to produce.

Free

True False

Free

True False

Free

True False

Free

True False

Free

True False

Q 267Q 267

In the long run,when a firm adds physical capital,workers become more productive,so variable costs increase.

Free

True False

Q 268Q 268

The long-run average total cost curve shows the relationship between output and the average total cost when fixed cost has been chosen to minimize average total cost for each level of output.

Free

True False

Q 269Q 269

The long-run average total cost curve shows the relationship between output and the average total cost when variable cost has been chosen to minimize average total cost for each level of output.

Free

True False

Q 270Q 270

A firm always operates at some point on its long-run average total cost curve in both the long run and the short run.

Free

True False

Q 271Q 271

If output increases,a firm will move along its short-run average total cost curve in the short run until it has time to adjust its fixed cost.

Free

True False

Q 272Q 272

The long-run average cost curve is tangent to a series of short-run average fixed cost curves.

Free

True False

Q 273Q 273

The long-run average cost curve is tangent to a series of short-run average total cost curves.

Free

True False

Q 274Q 274

If a firm has to increase output suddenly to meet an increase in demand,its average total cost will increase in the short run until it has time to add physical capital.

Free

True False

Q 275Q 275

If a firm has to increase output suddenly to meet an increase in demand,its average total cost will decrease in the short run until it has time to add physical capital.

Free

True False

Q 276Q 276

When a firm has to increase its output,average total costs will increase in the short run and then decrease in the long run,after the firm has time to add physical capital.

Free

True False

Q 277Q 277

When a firm has to increase its output,average total costs will decrease in the short run and then increase in the long run after the firm has time to add physical capital.

Free

True False

Free

True False

Q 279Q 279

When the long-run average total cost curve is downward-sloping as output increases,the firm has diseconomies of scale.

Free

True False

Q 280Q 280

When long-run average total cost is constant as output increases,the firm has constant returns to scale.

Free

True False

Q 281Q 281

When the long-run average total cost curve is upward sloping as output increases,the firm has diseconomies of scale.

Free

True False

Q 282Q 282

Economies of scale are often the result of increased specialization,which can occur when output levels increase.

Free

True False

Q 283Q 283

Economies of scale most often occur in industries whose initial fixed cost of plant and equipment is low.

Free

True False

Q 284Q 284

A production function that is characterized by economies of scale will not be subject to diminishing returns.

Free

True False

Free

True False

Q 286Q 286

If a firm builds a larger plant and increases output and if its long-run average total cost does not change,the firm has constant returns to scale.

Free

True False

Q 287Q 287

The advantage of specialization in production is one of the primary reasons for decreasing returns to scale.

Free

True False

Q 288Q 288

The production function provides information about:
A)a firm's profit level.
B)the transformation of inputs into output.
C)the location of the firm's production.
D)a firm's market structure.

Free

Multiple Choice

Q 289Q 289

The level of inputs a firm employs will determine a firm's:
A)ability to produce output.
B)elasticity of demand.
C)stock price.
D)location of production.

Free

Multiple Choice

Q 290Q 290

(Table: Tonya's Production Function for Apples)Use Table: Tonya's Production Function for Apples.Tonya is operating:
A)in the long run.
B)in the short run.
C)in a very expensive location.
D)at a loss.

Free

Multiple Choice

Q 291Q 291

(Table: Tonya's Production Function for Apples)Use Table: Tonya's Production Function for Apples.In the short run,Tonya's fixed input(s)is/are:
A)land.
B)labor.
C)land and labor.
D)neither land nor labor.

Free

Multiple Choice

Q 292Q 292

(Table: Tonya's Production Function for Apples)Use Table: Tonya's Production Function for Apples.In the short run,Tonya's variable input(s)is/are:
A)land.
B)labor.
C)land and labor.
D)neither land nor labor.

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Multiple Choice

Q 293Q 293

(Table: Tonya's Production Function for Apples)Use Table: Tonya's Production Function for Apples.As she hires more labor,Tonya's production function shows that the number of apples picked increases at a decreasing rate because of:
A)diminishing returns.
B)increasing returns.
C)constant returns.
D)workers becoming lazier.

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Multiple Choice

Q 294Q 294

(Table: Tonya's Production Function for Apples)Use Table: Tonya's Production Function for Apples.The marginal product of the fourth worker is _____ apples.
A)7
B)26
C)5
D)21

Free

Multiple Choice

Q 295Q 295

With one input fixed,a firm will find that as it attempts to produce more,the total product curve increases at a decreasing rate and its marginal product curve is:
A)downward sloping.
B)upward sloping.
C)constant and horizontal at the marginal product axis.
D)constant and vertical at the quantity axis.

Free

Multiple Choice

Q 296Q 296

(Table: Linda's Copy Shop Production)Use Table: Linda's Copy Shop Production.Linda's production runs into diminishing returns to her variable inputs when she employs the _____ unit.
A)second
B)third
C)fourth
D)fifth

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Multiple Choice

Q 297Q 297

Janet's poodle grooming salon has a total cost curve expressed by the equation TC = 100 + 3Q

^{2},^{ }where Q is the quantity of dogs groomed.Given this expression,Janet is operating in the: A)long run. B)short run,and her fixed costs are $100. C)long run,and her fixed costs are $100. D)short run,and there are no fixed costs.Free

Multiple Choice

Q 298Q 298

Janet's poodle grooming salon has a total cost curve expressed by the equation TC = 100 + 3Q

^{2},where Q is the quantity of dogs groomed.Given this expression,if Janet grooms five dogs,her total costs will be: A)$100. B)$175. C)$225. D)$75.Free

Multiple Choice

Q 299Q 299

Janet's poodle grooming salon has a total cost curve expressed by the equation TC = 100 + 3Q

^{2},where Q is the quantity of dogs groomed.Janet notices that,as she grooms more dogs,her total cost curve: A)becomes steeper. B)becomes flatter. C)stays constant. D)becomes steeper and then becomes horizontal.Free

Multiple Choice

Q 300Q 300

A firm's total fixed cost:
A)stays constant in the short run.
B)falls as the firm produces more output in the short run.
C)falls as the firm produces more output in the long run.
D)increases as the firm produces more output.

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Multiple Choice

Q 301Q 301

(Table: Lindsay's Farm)Use Table: Lindsay's Farm.Lindsay's fixed cost of production is:
A)$200.
B)$450.
C)$2,500.
D)$2,700.

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Multiple Choice

Q 302Q 302

(Table: Lindsay's Farm)Use Table: Lindsay's Farm.Lindsay's variable costs of production:
A)stay constant.
B)are equal to 10.
C)are zero when she produces no crops.
D)fall as soon as she starts producing.

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Multiple Choice

Q 303Q 303

(Table: Lindsay's Farm)Use Table: Lindsay's Farm.When Lindsay produces 140 units of produce,her total cost is:
A)$200.
B)$150.
C)$350.
D)$500.

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Multiple Choice

Q 304Q 304

(Table: Lindsay's Farm)Use Table: Lindsay's Farm.When Lindsay produces 50 units of produce,her total cost is:
A)$250.
B)$50.
C)$200.
D)$350.

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Multiple Choice

Q 305Q 305

(Table: Bonnie's Production Function for Good Z)Use Table: Bonnie's Production Function for Good Z.The marginal product of labor of the second worker is _____ units of good Z.
A)150
B)225
C)75
D)250

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Multiple Choice

Q 306Q 306

(Table: Bonnie's Production Function for Good Z)Use Table: Bonnie's Production Function for Good Z.Diminishing returns to labor begin to kick in after Bonnie hires the _____ worker.
A)second
B)third
C)fourth
D)fifth

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Multiple Choice

Q 307Q 307

(Table: Bonnie's Production Function for Good Z)Use Table: Bonnie's Production Function for Good Z.Suppose Bonnie spends $300 per month to rent the building,$100 per month on insurance,and $100 per worker per month.Given this information,Bonnie's monthly fixed costs equal:
A)$400.
B)$300.
C)$500.
D)$100.

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Multiple Choice

Q 308Q 308

(Table: Bonnie's Production Function for Good Z)Use Table: Bonnie's Production Function for Good Z.The costs that vary with Bonnie's level of production are her:
A)fixed costs.
B)variable costs.
C)rent and insurance.
D)costs that remain the same regardless of what she produces.

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Multiple Choice

Q 309Q 309

Diminishing returns are a reason that:
A)the marginal cost curve is downward sloping.
B)fixed costs remain constant.
C)the marginal cost curve is upward sloping.
D)the average fixed cost curve is downward sloping.

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Multiple Choice

Q 310Q 310

When a firm produces a small amount of output,the spreading effect:
A)is stronger than the diminishing returns effect.
B)is weaker than the diminishing returns effect.
C)and the diminishing returns effect are equal.
D)is zero.

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Multiple Choice

Q 311Q 311

As production increases and the fixed cost is divided by larger quantities of output,average fixed cost drops.This is referred to as the _____ effect.
A)diminishing returns
B)spreading
C)constant cost
D)increasing returns

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Multiple Choice

Q 312Q 312

The eventual increase in AVC as output increases is the _____ effect.
A)diminishing returns
B)spreading
C)constant cost
D)increasing returns

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Multiple Choice

Q 313Q 313

If ATC is equal to MC,then the firm is operating:
A)at the minimum point of ATC.
B)on the downward-sloping portion of ATC.
C)on the upward-sloping portion of ATC.
D)with increasing returns to scale.

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Multiple Choice

Q 314Q 314

The curve that illustrates the relationship between output and average total cost when the fixed cost has been chosen to minimize average total cost for each level of output is the _____ curve.
A)short-run average total cost
B)long-run average total cost
C)marginal cost
D)total product

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Multiple Choice

Q 315Q 315

When all of a firm's inputs are doubled,input prices do not change,and this results in the firm's level of production more than doubling,a firm is operating:
A)on the upward-sloping portion of its long-run average total cost curve.
B)on the downward-sloping portion of its long-run average total cost curve.
C)at the minimum of its long-run average total cost curve.
D)on the upward-sloping portion of its marginal cost curve.

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Multiple Choice

Q 316Q 316

A firm's long-run average total costs increase as it produces more output.This firm has:
A)economies of scale.
B)constant returns to scale.
C)diseconomies of scale.
D)a spreading effect.

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Multiple Choice

Q 317Q 317

Economies and diseconomies of scale are associated with the:
A)long-run average total cost curve and the long run.
B)short-run average total cost curve and the short run.
C)marginal cost curve and both the long and short run.
D)average fixed cost curve and the short run.

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Multiple Choice