Quiz 11: Output and Costs

All the decisions made by people who operate firms have one overriding objective, which is to ________. A) make maximum attainable profit B) maximize the firm's total revenue C) maximize the firm's market share D) maximize the quantity that the firm sells

The short run is a period of time in which A) the quantity of at least one factor of production is fixed. B) the amount of output is fixed. C) prices and wages are fixed. D) nothing the firm does can be altered.

The short run is a period of time in which A) the quantity used of at least one factor of production is fixed. B) the quantities used of all factors of production are fixed. C) output prices are fixed. D) factor of production prices are fixed.

A period of time in which the quantity of at least one factor of production used by a firm is fixed is called the A) market period. B) intermediate run. C) short run. D) long run.

Economists define the short run as a period of time so short that A) the amount of output cannot be changed except under diminishing marginal returns. B) the amount of output cannot be changed at all. C) only one factor of production can be varied. D) at least one factor of production cannot be varied.

The short run is a time frame in which A) at least one factor of production is fixed. B) all factors of production can be varied. C) all factors of production are fixed. D) at least one factor of production can be varied.

In the short run, A) all factors of production are fixed. B) at least one factor of production is fixed. C) all factors of production are variable. D) there are no variable costs.

In the short run, A) all factors of production are fixed. B) labor usage must remain fixed. C) a firm's plant is fixed. D) no factors of production are fixed.

The short run is a time period during which A) a firm can earn a normal profit. B) all factors of production are variable. C) at least one factor of production is fixed. D) all factors of production are fixed.

The short run is a time frame in which A) the quantities of some factors of production are fixed and the quantities of other factors of production can be varied. B) the quantities of all factors of production can be varied. C) the quantities of all factors of production are fixed. D) all costs are sunk costs.

An example of a variable factor of production in the short run is A) a building. B) capital equipment. C) an employee. D) land.

When the demand for electricity peaks during the hottest days of summer, Florida Power and Light Company can generate more electricity by using more fuel and increasing the working hours of many of its employees. The company cannot, however, increase electric power production by building additional generating capacity. This means that the company is in the A) market run. B) short run. C) intermediate run. D) long run.

An example of a short-run fixed factor of production is A) capital equipment. B) labor. C) electricity. D) postage for mailing.

A cost that has already been made and cannot be recovered is called a A) variable cost. B) fixed cost. C) sunk cost. D) marginal cost.

After constructing a new factory, the cost of building the factory is a A) past cost. B) sunk cost. C) variable cost. D) None of the above answers are correct.

The long run is a time frame in which A) the quantities of some factors of production are fixed and the quantities of other factors of production can be varied. B) the quantities of all factors of production can be varied. C) the quantities of all factors of production are fixed. D) all costs are sunk costs.

A period of time in which the quantity of all factors of production used by a firm can be varied is called the A) market period. B) variable run. C) short run. D) long run.

In the long run, a firm has A) no factors of production that are fixed. B) no factors of production that are variable. C) no factors of production that are either fixed or variable. D) fixed factors of production but no variable resources.

The long run A) means a long period of time, always longer than a year. B) is a period of time in which all factors of production can be varied. C) is different for different firms. D) Both answers B and C are correct.

The long run is a period of time in which A) all factors of production are variable. B) all factors of production are fixed. C) some but not all factors of production are fixed. D) some but not all factors of production are variable.

Which of the following factors is fixed in the long run? A) Capital B) Land C) Entrepreneurship D) None of the above because all factors are variable in the long run.

In the long run, a firm can vary A) its capital but not its labor. B) its labor but not its capital. C) both its labor and its capital. D) neither its labor nor its capital.

The long run is distinguished from the short run because only in the long run A) output prices can vary. B) factor of production prices can vary. C) the quantities of all factors of production can be varied. D) the firm no longer maximizes its profit.

In economics, the short run is the time frame in which the quantities of ________ and the long run is the period of time in which ________. A) some factors of production are variable; the quantities of all factors of production are fixed B) all factors of production are variable but technology is fixed; technology is variable C) all factors of production are fixed; the quantities of all factors of production can be varied D) some factors of production are fixed; the quantities of all factors of production can be varied

In the short run, A) the size of the plant is fixed. B) all factors of production are variable. C) all factors of production are fixed. D) some firms experience increasing returns to scale.

The long run is a time period in which A) one year or less elapses. B) all factors of production are variable. C) all factors of production are fixed. D) there is at least one fixed factor of production and at least one variable factor of production.

Which of the following statements is correct? A) A firm does not need to take into account its sunk cost when making current decisions. B) Long-run decisions are easily reversed. C) Short-run decisions are not easily reversed. D) In the long run, a firm can change its plant but not the quantity of its labor.

Total product is A) the increase in output that results from a one-unit increase in the quantity of labor employed with all other inputs remaining the same. B) maximum output that a given quantity of labor can produce. C) maximum amount of output produced by a given quantity of labor divided by the given quantity of labor employed. D) maximum amount of amount of output produced by a given quantity of labor divided by price of the output.

Points below a firm's total product curve are A) both attainable and technologically efficient. B) neither attainable nor technologically efficient. C) attainable but not technologically efficient. D) technologically efficient but not attainable.

Points on a firm's total product curve are A) both attainable and technologically efficient. B) neither attainable nor technologically efficient. C) attainable but not technologically efficient. D) technologically efficient but not attainable.

When the total product curve is drawn in a figure that measures employment along the horizontal axis, it is a graph that shows the A) minimum cost of producing a given amount of output using different techniques. B) maximum profit attainable for each unit of output sold per unit of labor employed. C) maximum output attainable for each quantity of labor employed. D) minimum output attainable for each quantity of labor employed.

All the production points that lie ________ the total product curve are attainable and ________. A) above; efficient B) above; inefficient C) below; efficient D) below; inefficient

A firm's total product curve shows A) that inefficiency is not possible. B) how the cost of the fixed resources change when output changes. C) how the amount of output changes when the quantity of labor changes. D) that in the long run the firm must adjust the quantity of all the resources it employs.

Most total product curves have A) first increasing and then decreasing marginal returns to labor. B) output first increasing and then decreasing as labor is added. C) first decreasing and then increasing marginal returns to labor. D) output increasing at an increasing rate as labor is added.

The marginal product of labor is equal to the A) total product divided by the total number of workers hired. B) increase in the total product that results from hiring one more worker with all other inputs remaining the same. C) slope of the marginal product of labor curve. D) None of the above answers are correct.

Marginal product is A) the increase in output that results from a one-unit increase in the quantity of labor employed with all other inputs remaining the same. B) total amount of output produced. C) total amount of output produced divided by the quantity of labor employed. D) total amount of output produced divided by price of the output.

The marginal product of labor is the increase in total product from a A) one unit increase in the quantity of labor, while holding the quantity of other inputs constant. B) one unit increase in the quantity of labor, while also increasing the quantity of other inputs by one unit. C) one dollar increase in the wage rate, while holding the price of other inputs constant. D) one percent increase in the wage rate, while also increasing the price of other inputs by one percent.

The marginal product of labor is the change in total product from a one-unit increase in A) the quantity of labor employed, holding the quantity of other inputs constant. B) the quantity of capital employed, holding the quantity of labor constant. C) both the quantity of labor and the quantity of other inputs employed. D) the wage rate.

The marginal product of labor is the A) change in output resulting from a one-unit increase in labor with all other inputs remaining the same. B) maximum output attainable with fixed factors of production when labor is the only variable factor of production. C) output level above which the slope of the total product curve falls. D) output level above which the rate of total product per unit of labor falls.

The total output produced with any quantity of labor is equal to the sum of the A) marginal products of each of the workers hired. B) average products of each of the workers hired. C) total wages the firm pays its workers. D) Both answers A and B are correct.

The average product of labor is equal to the A) total product divided by the total number of workers hired. B) total number of workers hired divided by the total product. C) slope of the marginal product of labor curve. D) Both answers B and C are correct.

Average product equals the A) increase in output that results from a one-unit increase in the quantity of labor employed with all other inputs remaining the same. B) total amount of output produced. C) total amount of output produced divided by the quantity of labor employed. D) total amount of output produced divided by price of the output.

Average product of labor is equal to ________. A) total product multiplied by the quantity of labor employed. B) the total product produced C) the quantity of labor employed divided by total product D) total product divided by the quantity of labor employed

The average product of labor is A) the inverse of the average product of capital. B) the slope of the curve showing the marginal product of labor. C) the slope of the curve showing the total product of labor. D) total product divided by the total quantity of labor employed.

Pizza Hut -Using the data in the above table, what is the marginal product of the second worker? A) 4.5 pizzas per hour B) 4 pizzas per hour C) 5 pizzas per hour D) The marginal product is undefined.

Pizza Hut -Using the data in the above table, what is the marginal product of the third employee? A) 2 pizzas per hour B) 3 pizzas per hour C) 4 pizzas per hour D) 12 pizzas per hour

Pizza Hut -Using the data in the above table, what is the average product of three employees? A) 2 pizzas per hour B) 3 pizzas per hour C) 4 pizzas per hour D) 12 pizzas per hour

-The above table shows the total product of producing baseball hats. The marginal product of the 4th worker is equal to A) 25 baseball hats. B) 21 baseball hats. C) 7 baseball hats. D) 6.25 baseball hats.

-The above table shows the total product of producing baseball hats. The average product of 3 workers is equal to A) 1.67 baseball hats. B) 6.00 baseball hats. C) 12.78 baseball hats. D) 18.00 baseball hats.

-The above (incomplete) table provides information about the relationships between labor and various product measures. The total product that can be produced with 6 units of labor is A) 20. B) 19. C) More information is needed to answer the question. D) None of the above answers is correct.

-The above (incomplete) table provides information about the relationships between labor and various product measures. The amount of labor that maximizes the marginal product of labor is A) 2 units of labor. B) 3 units of labor. C) 4 units of labor. D) 5 units of labor.

-The above (incomplete) table provides information about the relationships between labor and various product measures. The average product of the fourth unit of labor A) exceeds the marginal product of the fourth unit of labor. B) is less than the marginal product of the fourth unit of labor. C) is equal to the marginal product of the fourth unit of labor. D) is equal to 4.0.

Total Product, Marginal Product, Average Product -In the above table, the marginal product of the second worker is A) 1. B) 2. C) 3. D) 4.

Total Product, Marginal Product, Average Product -In the above table, the marginal product of the third worker is A) 1. B) 2. C) 3. D) 4.

Total Product, Marginal Product, Average Product -In the above table, the marginal product of the fourth worker is A) 1. B) 3. C) 4. D) 6.

Total Product, Marginal Product, Average Product -In the above table, the marginal product is greatest when the A) first worker is hired. B) second worker is hired. C) third worker is hired. D) fourth worker is hired.

Total Product, Marginal Product, Average Product -In the above table, the average product of three workers is A) 1. B) 2. C) 3. D) 4.

Total Product, Marginal Product, Average Product -In the above table, the average product is less than the marginal product A) when the first worker is hired. B) when the second worker is hired. C) when the third worker is hired. D) for the entire range of output given.

-The table shows some data that describes Tom's T-Shirts' total product when Tom's has 1 sewing machine. When 4 workers are employed, ________. A) average product of labor is a maximum B) marginal product of labor is less than average product of labor C) marginal product of labor exceeds average product of labor D) marginal product of labor equals average product of labor

-Based on the production data for Pat's Pizza Parlor in the above table, the marginal product of the 4th worker is ________ pizzas. A) 5 B) 8 C) 10 D) 45

-Based on the production data for Pat's Pizza Parlor in the above table, which worker has the largest marginal product? A) Worker 1 B) Worker 2 C) Worker 3 D) Worker 4

-Based on the above production data table for Ken's Pizza Parlor, we know that the average product of labor curve begins to decrease after hiring worker ________. A) 1 B) 2 C) 3 D) 4

-Based on the production data for Pat's Pizza Parlor in the above table, the average product of labor when 4 workers are hired is ________ pizzas. A) 8 B) 10 C) 11.25 D) 45

-Based on the production data for Pat's Pizza Parlor in the above table, which of the following pair of workers have the same average product? A) 1 and 2 B) 2 and 4 C) 1 and 5 D) 2 and 5

-In the figure above, the marginal product of the second worker is A) 10 units. B) 5 units. C) 2 units. D) 1 units.

-In the above figure, after the second worker is hired, the marginal product of labor is A) increasing. B) diminishing. C) constant. D) zero.

At point d in the above figure, the average product of labor equals A) 15. B) 4. C) 3.75. D) approximately 1.

In the above figure, the average product of labor at point c is A) 10. B) 5. C) 2. D) None of the above answers is correct.

In the figure above, ________ is a technologically efficient point. A) d B) f C) g D) None of the selections is correct.

In the above figure, a technologically inefficient point is A) a. B) e. C) g. D) f.

In the above figure, an unattainable point is A) a. B) e. C) g. D) f.

In the above figure, the most efficient way to produce 10 units is to hire A) 1 worker. B) 2 workers. C) 3 workers. D) 5 workers.

In the above figure, the most efficient way to produce 15 units is to hire A) 2 workers. B) 3 workers. C) 4 workers. D) 5 workers.

In the above figure, the maximum number of units that 4 workers can produce is A) 5 units. B) 10 units. C) 15 units. D) more than 15 units.

In the above figure, the marginal product of labor is zero at point A) a. B) c. C) e. D) f.

At point e in the above figure, the marginal product of labor A) is less than the average product of labor. B) equals the average product of labor. C) is greater than the average product of labor. D) is at its maximum.

The steeper the slope of the total product curve, the A) larger is the marginal product of labor. B) smaller is the marginal product of labor. C) higher is the level of the total cost curve. D) more efficient is the technology employed.

Increasing marginal returns to labor might occur at low levels of labor input because of A) increasing average costs. B) differing factor proportions. C) increasing specialization of tasks. D) decreasing use of machinery and increasing use of technology.

In general, increasing marginal returns occur A) as output expands at low levels of production. B) through the entire range of production. C) as output expands at high levels of production. D) whenever the slope of the total product curve is positive.

At that amount of output where diminishing marginal returns first sets in, A) total product will begin to decline. B) average product will begin to decline. C) marginal product will begin to decline. D) all of the above

"Diminishing marginal returns" refer to a situation in which the A) marginal cost of the next worker hired is less than the marginal cost of the previous worker hired. B) average cost of the next worker hired is less than the average cost of the previous worker hired. C) marginal product of the next worker hired is less than the marginal product of the previous worker hired. D) average product of the next worker hired is less than the average product of the previous worker hired.

A firm's total product curve shows that at first it has A) economies of scale and then diseconomies of scale. B) diseconomies of scale and then economies of scale. C) increasing marginal returns and then diminishing marginal returns. D) diminishing marginal returns and then increasing marginal returns.

Diminishing marginal returns to labor occur because A) after a while it is hard to find a good worker. B) the capital resources used by the firm are fixed in the short run. C) workers become more efficient over time. D) larger companies are less efficient.

Which of the following statements regarding the marginal product curve is FALSE? A) Increasing marginal returns occur only when the total product increases as the number of workers increases. B) Increasing marginal returns is due to greater efficiency from specialization in the production process. C) The law of diminishing returns applies in the short run. D) Along the marginal product curve, increasing marginal returns occur first and then diminishing marginal returns.

Diminishing marginal returns occur when ________. A) the average product of the variable input eventually diminishes B) the marginal product of an additional worker is less than the marginal product of the previous worker hired C) the firm hires cheap, less-skilled workers in place of expensive, high-skilled workers D) total product diminishes

The law of diminishing returns states that as A) the size of a plant increases, the firm's fixed cost decreases. B) the size of a plant increases, the firm's fixed cost increases. C) a firm uses more of a variable input, given the quantity of fixed inputs, the marginal product of the variable input eventually diminishes. D) a firm uses more of a variable input, given the quantity of fixed inputs, the firm's average total cost will decrease eventually.

The law of diminishing returns states that as a firm increases A) all the inputs is uses, the marginal product of each of these inputs always decreases. B) a variable input, with a given quantity of fixed inputs, the firm's marginal cost eventually decreases. C) a variable input, with a given quantity of fixed inputs, the marginal product of the variable input eventually decreases. D) a variable input, given the quantity of fixed inputs, the firm's average total cost will eventually decrease.

The law of diminishing marginal returns says that as the firm uses more of ________, with a given quantity of ________, the ________ product of the variable input eventually diminishes. A) a fixed input; variable inputs; marginal B) all inputs; capital; average C) a variable input; fixed inputs; average D) a variable input; fixed inputs; marginal

The law of diminishing returns makes it clear that as more a variable input is employed, in the ________ the marginal product of the variable input eventually will ________. A) short run; rise B) long run; rise C) short run; fall D) long run; fall

The law of diminishing returns occurs because A) the marginal product of an additional worker is greater than the marginal product of the previous worker. B) the marginal product of a variable input, such as labor, depends in part on the amount of fixed inputs, such as capital. C) total production decreases as more of the variable inputs are used. D) adding more and more workers leads to a decrease in the quantity of capital.

The law of diminishing returns implies that, with the quantity of capital fixed, as the use of labor rises, A) total product will fall eventually. B) the marginal product of labor will fall eventually. C) the total product of labor will fall below the marginal product of labor. D) the production process will become technologically inefficient eventually.

-In the above table, between what two levels of output does one first observe the law of diminishing returns? A) 0 and 1000 B) 1000 and 3000 C) 3000 and 4000 D) 4000 and 4500

Decent Donuts -Using the table above, what is the marginal product of the 5th worker hired at Decent Donuts? A) 86 dozen donuts per day B) 22 dozen donuts per day C) 17.2 dozen donuts per day D) 64 dozen donuts per day

Decent Donuts -Based on the data in the table above, which worker at Decent Donuts has the highest marginal product? A) the fourth B) the fifth C) the sixth D) the seventh

Decent Donuts -Based on the data in the table above, what is the average product of labor when Decent Donuts employs five workers? A) 16.66 dozen donuts per day B) 17.2 dozen donuts per day C) 20 dozen donuts per day D) 22 dozen donuts per day

Decent Donuts -Based on the data in the table above, when Decent Donuts hires eight workers, the A) average product of labor is greater than the marginal product. B) marginal product of labor is greater than the average product. C) marginal product of labor is equal to the average product. D) marginal product of labor is not defined.

Using the table above, for which of the following levels of employment does the marginal product of labor exceed the average product of labor at Decent Donuts? A) four workers B) seven workers C) both of the above D) neither of the above

Using the table above, for which of the following levels of employment does the average product of labor exceed the marginal product of labor at Decent Donuts? A) ten workers B) seven workers C) both of the above D) neither of the above

Based on the data in the table above, after which worker is hired do diminishing marginal returns begin? A) the first B) the fifth C) the sixth D) the ninth

-The table above shows the short-run product schedule for Virginia's Tee-Shirts. What is the marginal product associated with the hiring the fifth worker? A) 30 shirts B) 50 shirts C) 235 shirts D) 250 shirts

-The table above shows the short-run product schedule for Virginia's Tee-Shirts. What is the average product associated with hiring the fourth worker? A) 40 shirts B) 55 shirts C) 50 shirts D) 220 shirts

-The table above shows the short-run product schedule for Virginia's Tee-Shirts. The worker for whom the law of diminishing returns initially occurs is the ________ worker. A) 5th B) 4th C) 3rd D) 2nd

Jefferson's Cleaners -Based on the above table, what is the marginal product of the 6th worker hired at Jefferson's Cleaners? A) 10 suits per day B) 11 suits per day C) 14 suits per day D) 84 suits per day

Jefferson's Cleaners -Using the data in the above table, which worker at Jefferson's Cleaners has the highest marginal product? A) the second B) the third C) the fourth D) the fifth

Jefferson's Cleaners -Using the above table, what is the average product of labor when Jefferson's Cleaners employs six workers? A) 11 suits per day B) 12 suits per day C) 13 suits per day D) 14 suits per day

Jefferson's Cleaners -Using the above table, when Jefferson's Cleaners hires three workers, A) the average product of labor is greater than the marginal product. B) the marginal product of labor is greater than the average product. C) it has already experienced diminishing marginal returns. D) Both answers A and C are correct.

Jefferson's Cleaners -Using the data in the above table, which worker hired at Jefferson's Cleaners is the first to show diminishing marginal returns? A) the second B) the third C) the fourth D) the fifth

Jefferson's Cleaners -Based on the data in the above table, at what level of output does the marginal cost start to rise at Jefferson's Cleaners? A) 45 suits per day B) 47 suits per day C) 74 suits per day D) 85 suits per day

-The above table shows the short-run total product schedule for the campus book store. What is the marginal product (MP) of going from 5 to 6 employees at the book store? A) 83 books sold B) 13.83 books sold C) 10 books sold D) between 11 and 14 books sold

-The above table shows the short-run total product schedule for the campus book store. Which employee has the highest marginal product (MP)? A) the 10th employee B) the 5th employee C) the 4th employee D) the 1st employee

-The above table shows the short-run total product schedule for the campus book store. What is the average product (AP) of the 4th employee? A) 58 books sold B) 14.5 books sold C) 18 books sold D) 13.3 books sold

-The above table shows the short-run total product schedule for the campus book store. When the fifth employee is hired, the marginal product is ________ and is ________ the average product. A) increasing; greater than B) increasing; less than C) decreasing; greater than D) decreasing; less than

-The above table shows the short-run total product schedule for the campus book store. At what levels of books sold per hour will the marginal product of labor be greater than the average product of labor? A) 40 books sold per hour B) 73 books sold per hour C) Both A and B are correct. D) Neither A nor B is correct.

-The above table shows the short-run total product schedule for the campus book store. When the book store hires the 3rd employee, A) the bookstore is still experiencing increasing marginal returns. B) the book store has already begun to experience diminishing marginal returns, but average product is still rising. C) both marginal and average product have already begun to decline. D) marginal product is at its maximum.

-The above table shows the short-run total product schedule for the campus book store. With which employee do diminishing marginal returns set in? A) the 9th employee B) the 6th employee C) the 5th employee D) the 2nd employee

-The table above shows some data that describe Tom's T-Shirts' total product when Tom has 1 sewing machine. An increase in the number of workers from 1 to 2 a day increases average product of labor from ________ T shirts per worker and marginal product of labor is ________ T shirts per worker. A) 10 to 11; 22 B) 10 to 22; 12 C) 10 to 22; 22 D) 10 to 11; 12

-The table above shows some data that describe Tom's T-Shirts' total product when Tom's has 1 sewing machine. Diminishing marginal returns begin when the ________ is employed. A) second worker B) fifth worker C) fourth worker D) third worker

-In the above table, the marginal product of the 7th worker is 6. What is the total product when 7 workers are employed? A) 68 B) 70 C) 72 D) 76

-In the above table, what is marginal product of labor for the 2nd worker? A) 20 B) 8 C) 10 D) 12

-In the above table, what is marginal product of labor for the 5th worker? A) 10 B) 14 C) 9 D) 11.2

-In the above table, what is average product when 4 workers are employed? A) 12 B) 10 C) 11.5 D) 9.5

-In the above table, diminishing marginal returns start to occur when the A) 3rd worker is employed. B) 4th worker is employed. C) 5th worker is employed. D) 6th worker is employed.

If a firm's marginal product of labor is less than its average product of labor, then an increase in the quantity of labor it employs definitely will A) decrease its total product. B) decrease its average product of labor. C) increase its marginal product of labor. D) not change its average product of labor.

Which of the following statements is true? A) When marginal product is less than average product, average product is increasing. B) When marginal product is less than average product, average product is decreasing. C) When marginal product is falling, average product is decreasing. D) When marginal product is rising, average product is decreasing.

Which of the following statements is true? A) If average product equals marginal product, average product decreases. B) If marginal product equals average product, average product is a maximum. C) If marginal product equals average product, marginal product is a maximum. D) If marginal product exceeds average product, marginal product increases.

When the marginal product of labor is greater than the average product of labor, the A) marginal product of labor must be increasing as labor increases. B) average product of labor must be increasing as labor increases. C) total product must be increasing at an increasing rate as labor increases. D) None of the above answers is correct.

When the average product of labor is greater than the marginal product of labor, A) the marginal product of labor must be increasing as labor increases. B) there must be increasing marginal returns. C) the average product of labor is decreasing as labor increases. D) None of the above answers is correct

When the marginal and average products of labor are equal to each other, the A) average product must be at its maximum value. B) marginal product must be at its maximum value. C) total product must be at its maximum value. D) None of the above answers is correct

When the marginal product of labor is a maximum, the average product of labor is ________. A) a maximum B) increasing C) decreasing D) equal to marginal product

When the marginal product equals the average product, the A) average product curve is downward sloping. B) average product curve is upward sloping. C) marginal product is at its maximum. D) average product is at its maximum.

Which of the following statements is true for any marginal and average? A) When the marginal is greater than the average, the average increases. B) When the marginal is less than the average, the average increases. C) When the marginal is rising, the average is increasing. D) When the marginal is equal to the average, the average decreases.

When the marginal product curve is above the average product curve, ________ as output increases. A) average product must decrease B) average product must increase C) marginal product must decrease D) marginal product must increase

Which of the following statements is true? A) The marginal and average product curves intersect at the maximum level of output. B) At every output level the marginal product curve lies above the average product curve. C) The marginal product and average product curves intersect when average product is at its maximum. D) The marginal product curve always has a positive slope.

The marginal product and average product curves A) never intersect. B) intersect at the maximum point of the marginal product curve. C) intersect at the maximum point of the average product curve. D) do not intersect at any predictable point.

When the marginal product curve is downward sloping, the average product curve A) must also be downward sloping. B) might be either upward or downward sloping. C) must be upward sloping. D) must be horizontal.

If a firm's marginal product of labor is greater than its average product of labor, then an increase in the quantity of labor it employs definitely A) increases its total product. B) increases its marginal product of labor. C) decreases its average product of labor. D) does not change its average product of labor.

With a technological change that increases productivity, the average product curve ________ and the marginal product curve ________. A) shifts upward; is unchanged B) is unchanged; is unchanged C) is unchanged; shifts upward D) shifts upward; shifts upward

Total product divided by the total quantity of labor employed equals the A) average product of labor. B) marginal product of labor. C) average total cost. D) average variable cost.

Diminishing marginal returns occurs when A) all inputs are increased and output decreases. B) all inputs are increased and output increases by a smaller proportion. C) a variable input is increased and output decreases. D) a variable unit is increased and its marginal product falls.

The average product of labor exceeds the marginal product of labor A) when the average product of labor is falling. B) when the average product of labor is rising. C) when the marginal product of labor is at its maximum. D) when the average product of labor is at its maximum.

When the marginal product of labor exceeds the average product of labor, A) the average product of labor is increasing. B) the average product of labor is decreasing. C) the total product curve is negatively sloped. D) the firm is experiencing decreasing returns to scale.

-Using the data in the above table, if the firm employs 3 workers, total product (measured in units per day) and average product and marginal product of the third worker (measured in units per worker) are A) 19, 6 1/3, and 9 respectively. B) 3, 19, and 6 1/3 respectively. C) 19, 3, and 9 respectively. D) 19, 6 1/3, and 7 respectively.

-Using the data in the above table, if the firm employs 5 workers, total product (measured in units per day) and average product and marginal product of the fifth worker (measured in units per worker) are A) 23, 5.00, and 4 respectively. B) 23, 5.75, and 4 respectively. C) 25, 5.00, and 2 respectively. D) 25, 5.75, and 4 respectively.

A firm's total cost (TC) equals the sum of its fixed cost plus its A) marginal cost. B) variable cost. C) variable cost plus its marginal cost. D) sunk cost plus its variable cost plus its marginal cost.

Total cost is equal to the A) sum of the total fixed cost and the total variable cost. B) sum of the average fixed cost and the average variable cost. C) difference between the average variable cost and the average fixed cost. D) product of the marginal cost multiplied by the average total cost.

Which of the following statements is correct? A) As output increases, total cost and total fixed cost increase by the same amount. B) As output increases, total cost and total fixed cost increase but not necessarily by the same amount. C) As output increases, total cost increases and total fixed cost decreases. D) Total fixed cost plus total variable cost equals total cost.

A firm has fixed costs A) in the short run and in the long run. B) in the short run but not in the long run. C) in the long run but not in the short run. D) neither in the long run nor in the short run.

Total fixed cost is the sum of all A) costs of the firm's fixed factors of production. B) costs associated with the production of goods. C) costs that rise as output increases. D) the marginal costs of the different factors of production.

A firm's total fixed cost (TFC) is a cost A) it is certain ("fixed") that the firm must pay. B) that does not change as output changes. C) that is dependent on marginal cost. D) that is paid in only the long run.

Total fixed cost A) increases as output increases. B) does not change as output changes. C) decreases as output increases. D) initially decreases and then increases as output increases.

Which type of cost is does not change as the quantity of output produced changes? A) total cost B) average cost C) fixed cost D) marginal cost

Which of the following would be classified as a fixed cost for the local supermarket? A) The cost of the boxes of cereal sold in the store. B) The salary and any overtime paid the store's manager. C) The rent from the six-year lease for the building the store uses. D) The Social Security tax the store pays the federal government on the workers' income.

Which of the following would be classified as a fixed cost for the proprietor who owns and operates the local Texaco station? A) The federal excise tax paid on each gallon of Texaco gasoline sold. B) The state income tax on the profit earned. C) The rent paid on the 10 year lease for the property on which the station is located. D) The Social Security tax the owner pays the federal government on the owner's income.

Total variable cost is the sum of all A) costs of the firm's fixed factors of production. B) costs associated with the production of goods. C) costs that rise as output increases. D) implicit costs.

A firm's total variable cost (TVC) is defined as a cost that A) does not change (is not "variable") as the firm changes its output. B) changes as the firm changes its output. C) falls as the firm increases its output. D) varies only when the firm reaches the long run.

Total variable cost A) increases as output increases. B) does not change as output changes. C) decreases as output increases. D) initially decreases and then increases as output increases.

Ernie's Earmuffs produces 200 earmuffs per year at a total cost of $2,000 and $400 of this cost is fixed. What is Ernie's total variable cost? A) $2,400 B) $2,000 C) $1,600 D) $800

Which of the following would be classified as a variable cost for the local Texaco station? A) Interest payments to a local bank for a 5-year loan. B) The total wages paid to the workers who are all paid $16.00 per hour, no matter how many hours they work each week. C) The premiums paid for liability insurance, which are constant throughout the life of the contract. D) The opportunity cost of money used to finance the installation of some new pumps.

In a diagram with the total cost curve and the total variable cost curve, as output increases, the vertical distance between these two curves A) is constant. B) decreases. C) increases. D) gets smaller and then bigger again.

Ernie's Earmuffs produces 200 earmuffs per year at a total cost of $2,000 and $400 of this cost is fixed. What is Ernie's average total cost? A) $12 B) $10 C) $8 D) $2

-The table above gives costs at Jan's Bike Shop. Unfortunately, Jan's record keeping has been spotty. Each worker is paid $100 a day. Labor costs are the only variable costs of production. What is the total cost of producing 50 bikes? A) $100 B) $200 C) $300 D) $400

-The table above gives costs at Jan's Bike Shop. Unfortunately, Jan's record keeping has been spotty. Each worker is paid $100 a day. Labor costs are the only variable costs of production. What is the total fixed cost of producing 64 bikes? A) $200 B) $300 C) $400 D) $500

-The table above gives costs at Jan's Bike Shop. Unfortunately, Jan's record keeping has been spotty. Each worker is paid $100 a day. Labor costs are the only variable costs of production. What is the total variable cost of producing 60 bikes? A) $200 B) $300 C) $400 D) $500

A firm's marginal cost is the increase in its total cost divided by the increase in its A) quantity of labor. B) average cost. C) output. D) average revenue.

Marginal cost is equal to A) total cost divided by output. B) output divided by total cost. C) the change in total cost divided by the change in total revenue. D) the change in total cost divided by the change in output.

Marginal cost is the increase in total ________ that results from a one-unit increase in ________. A) fixed cost; the fixed input B) cost; output C) variable cost; the variable input D) fixed cost; output

Marginal cost is A) all the costs of the fixed inputs. B) all the costs of production of goods. C) all the costs that vary with output. D) the change in the total cost resulting from a one-unit change in output.

Marginal cost is calculated as A) total cost divided by output. B) the increase in total cost divided by the increase in output. C) the increase in total cost divided by the increase in labor, given the amount of capital. D) total cost minus total fixed cost.

Marginal cost ________ as the quantity produced is increased. A) first increases and then decreases B) first decreases and then increases C) always increases D) always decreases

A decrease in the price of a fixed factor of production decreases total cost and A) increases marginal cost. B) leaves marginal cost unchanged. C) decreases marginal cost. D) increases variable cost.

Ernie's Earmuffs produces 200 earmuffs per year at a total cost of $2,000 and $400 of this cost is fixed. If he increases output to 220 earmuffs, his total cost increases to $2100, and his fixed cost remains $400. What is Ernie's marginal cost per earmuff? A) $105 B) $35 C) $9.55 D) $5

A company could produce 99 units of a good for $316 or produce 100 units of the same good for $320. The marginal cost of the 100th unit A) is $3.20. B) is $4.00. C) is $320. D) cannot be calculated with this information.

A company could produce 100 units of a good for $320 or produce 101 units of the same good for $324. The $4 difference in costs is A) the marginal benefit of producing the 101st unit. B) the marginal cost of producing the 101st unit. C) both the marginal benefit and the marginal cost of producing the 101st unit. D) neither the marginal benefit nor the marginal cost of producing the 101st unit.

As output increases, marginal cost will eventually A) increase because of the law of increasing returns. B) increase because of the law of diminishing returns. C) decrease because of the law of diminishing returns. D) decrease because of the law of increasing returns.

Which of the following statements is true? A) Average fixed cost equals average total cost plus average variable cost. B) Average variable cost is always greater than average fixed cost. C) Average fixed cost equals total fixed cost divided by total output. D) Average total cost always falls as output increases.

As output increases, average fixed cost A) always decreases. B) increases, then decreases. C) decreases, then increases. D) remains constant.

By using more labor to produce more output, a firm can always reduce its A) marginal cost. B) average variable cost. C) average total cost. D) average fixed cost.

Average total cost minus average variable cost ________ as output increases because ________ as output increases. A) decreases and then increases; marginal cost initially decreases and then increases B) decreases; average fixed cost decreases C) decreases; marginal returns diminish D) decreases; economies of scale are present

As output increases, AVC approaches ATC because of A) diseconomies of scale. B) diminishing marginal returns. C) decreasing average fixed cost. D) increasing marginal cost.

Average variable cost is equal to A) average total cost minus average fixed cost. B) average total cost multiplied by output. C) total cost divided by output. D) the change in total cost divided by the change in output.

The average total cost curve eventually slopes upwards because of the A) law of diminishing returns. B) reductions in average fixed costs. C) increase in capital costs. D) decrease in labor costs.

The average total cost curve A) is U-shaped. B) diminishes initially because average fixed costs diminish. C) increases eventually because of diminishing returns. D) All of the above answers are correct.

Average total costs are total costs divided by A) total output. B) total fixed costs. C) total variable costs. D) the total number of workers employed.

Average total costs are A) total costs divided by total output. B) total output divided by total costs. C) the change in total costs divided by the change in output. D) the change in output divided by the change in total costs.

A firm's average total cost is $60, its average variable cost is $30, and its total fixed cost is $600. Its output is A) 20 units. B) 30 units. C) 40 units. D) 50 units.

-Sandra's Sweaters' production function is shown in the above table. Sandra rents three knitting machines for $30 a day each and hires workers at a wage rate of $40 a day. If Sandra produces 18 sweaters per day, what is her average total cost? A) $5.00 B) $6.67 C) $9.44 D) $10.00

-Sandra's Sweaters' production function is shown in the above table. Sandra rents three knitting machines for $30 a day each and hires workers at a wage rate of $40 a day. If the rental rate of capital rises to $50 per machine a day, Sandra's ________ curve shifts upward. A) average variable cost B) total variable cost C) average fixed cost D) marginal cost

-The above table gives some production and cost information for Flaming Fernando's, a restaurant that sells Fiery Frijoles. What is the total fixed cost of producing 4,500 frijoles? A) $1000 B) $8000 C) $9000 D) More information is needed to determine the answer.

-The above table gives some production and cost information for Flaming Fernando's, a restaurant that sells Fiery Frijoles. Between what two levels of output does the marginal cost of producing Fiery Frijoles first begin to rise? A) 0 and 1000 B) 1000 and 3000 C) 3000 and 4000 D) 4000 and 4500

-The above table gives some production and cost information for Flaming Fernando's, a restaurant that sells Fiery Frijoles. What is the average variable cost of producing 1,000 frijoles? A) $1 B) $2 C) $3 D) More information is needed to determine the answer.

-The above table gives some production and cost information for Flaming Fernando's, a restaurant that sells Fiery Frijoles. What is the average total cost of producing 4,500 frijoles? A) $2 B) $225 C) $9000 D) More information is needed to determine the answer.

The production and cost information provided in the table above for Flaming Fernando's, a restaurant that sells Fiery Frijoles, is for the A) short run because there are no variable costs. B) short run because there is a fixed cost. C) long run because there are no variable costs. D) long run because there are no fixed costs.

As output increases, total cost ________, total fixed cost ________, and total variable cost ________. A) increases; increases; increases B) increases; increases; does not change C) increases; does not change; increases D) does not change; increases; increases

The vertical distance between the total variable cost curve and the total cost curve ________ as output increases; the vertical distance between the average variable cost curve and the average total cost curve ________ as output increases. A) decreases; remains the same B) is constant; becomes smaller C) increases; becomes smaller at first but then increases D) increases; remains the same

If total fixed cost increases, then the average total cost curve ________ and the marginal cost curve ________. A) does not shift; shifts upward B) shifts upward; shifts upward C) does not shift; does not shift D) shifts upward; does not shift

-In the table above, the marginal product of the 5th worker is ________ units per week. A) 2 B) 5 C) 10 D) 19

-The table above gives a firm's total product schedule. Suppose labor is the only variable factor of production. The price of labor is $500 per week and total fixed costs are $600 per week. What is the total cost of producing 70 units? A) $1,700 B) $1,900 C) $2,100 D) $2,300

-The table above gives a firm's total product schedule. Suppose labor is the only variable factor of production. The price of labor is $500 per week and total fixed costs are $600 per week. If 95 units are produced, the average total cost is A) $6.31. B) $17.45. C) $26.32. D) $32.63.

-The table above gives a firm's total product schedule. Suppose labor is the only variable factor of production. The price of labor is $500 per week and total fixed costs are $600 per week. What is the marginal cost of producing the 90th unit? A) $10.00 B) $24.92 C) $31.61 D) $50.00

Decent Donuts -Use the data in the table above and suppose that labor is the only variable factor of production. If each worker is paid $42.00 per day, what is the average variable cost to Decent Donuts of producing 122 dozen donuts per day? A) $1.91 B) $2.16 C) $2.41 D) $3.06

Decent Donuts -Use the data in the table above and suppose that labor is the only variable factor of production. When 122 dozen donuts are produced at Decent Donuts, the MC curve A) has a positive slope. B) shows the effect of increasing marginal returns. C) Both answers A and B are correct. D) Neither answer A nor B is correct.

Decent Donuts -Use the data in the table above and suppose that labor is the only variable factor of production. When 122 dozen donuts are produced at Decent Donuts, the AVC curve A) has a negative slope. B) has a positive slope. C) is at its minimum point. D) is at its maximum point.

Decent Donuts -Use the data in the above table and suppose that labor is the only variable factor of production. At what level of output does the marginal cost start to rise at Decent Donuts? A) 0 dozen donuts B) 111 dozen donuts C) 128 dozen donuts D) There is not enough information given to determine when the marginal cost starts to increase.

-Cindy's Sweaters' production function is shown in the above table. What is the marginal product of labor when the 4th worker is hired? A) 4 sweaters per day B) 2 sweaters per day C) 20 sweaters per day D) 5 sweaters per day

-Cindy's Sweaters' production function is shown in the above table. Cindy rents two knitting machines for $30 a day each and hires workers at a wage rate of $40 a day. If Cindy produces 18 sweaters per day, what is her total cost? A) $120 B) $140 C) $180 D) $60

-Cindy's Sweaters' production function is shown in the above table. Cindy rents two knitting machines for $30 a day each and hires workers at a wage rate of $40 a day. If Cindy produces 20 sweaters per day, what is her average fixed cost of production? A) $3.00 B) $3.33 C) $8.00 D) $11.00

-Cindy's Sweaters' production function is shown in the above table. Cindy rents two knitting machines for $30 a day each and hires workers at a wage rate of $40 a day. What is the marginal cost of the 19th sweater? A) $40.00 B) $20.00 C) $10.00 D) $8.00

-Cindy's Sweaters' production function is shown in the above table. Cindy rents two knitting machines for $30 a day each and hires workers at a wage rate of $40 a day. If Cindy produces 18 sweaters per day, what is her average total cost? A) $6.67 B) $10.00 C) $11.00 D) $13.33

-The above table shows the total product schedule for the campus book store. If employees are paid $6 per hour and there are no other variable costs, then what is the marginal cost (MC) per book of increasing book sales from 83 to 87 books per hour? A) $6.00 B) $4.00 C) $2.07 D) $1.50

-The above table shows the total product schedule for the campus book store. If each employee is paid $6 per hour and there are no other variable costs, then at what level of books sold per hour does the marginal cost begin to increase? A) 41 books per hour B) 59 books per hour C) 73 books per hour D) 90 books per hour

-The above table shows the total product schedule for the campus book store. If each employee is paid $6 per hour, what is the average variable cost of selling 83 books per hour (assuming labor costs are the only variable costs of production)? A) $0.43 per book B) $0.07 per book C) $2.30 per book D) $6.00 per book

-The above table shows the total product schedule for the campus book store. If employees are paid $6 per hour, assuming there are no other variable costs, then the average variable cost of selling books will reach its minimum at A) 58 books sold per hour. B) 59 books sold per hour. C) 73 books sold per hour. D) 83 books sold per hour.

-The above table shows the total product schedule for the campus book store. When the book store is selling 60 books per hour it is certain that A) marginal costs are increasing, but average variable costs are still decreasing. B) both marginal and average costs are decreasing. C) both marginal and average costs are increasing. D) hiring one more employee per hour will lead to fewer books being sold.

Cost schedule -In the above table, the total cost of producing 9 units of output is A) $20. B) $30. C) $50. D) $70.

Cost schedule -The above table shows a firm's A) long-run costs. B) short-run costs. C) short-run and long-run costs. D) More information is needed to determine if the costs are long-run costs or short-run costs.

Cost schedule -In the above table, the total variable cost of producing 16 units of output is A) $20. B) $60. C) $100. D) $120.

Cost schedule -Using the data in the above table, when output increases from 4 to 9 units, the marginal cost of one of those 5 units is A) $4.00. B) $4.25. C) $5.00. D) $6.25.

Cost schedule -Using the data in the above table, the average fixed cost of producing 9 units per day is A) $2.22. B) $5.00. C) $5.55. D) $20.00.

Cost schedule -Using the data in the above table, the average total cost of producing 16 units per day is A) $1.25. B) $6.25. C) $7.00 D) $7.50.

-The above table gives some of the costs of the Delicious Pie Company. What is the total fixed cost of producing 100 pies? A) $300 B) $400 C) $700 D) More information is needed to calculate the total fixed cost.

-The above table gives some of the costs of the Delicious Pie Company. The marginal cost of increasing pie output from 200 to 300 pies equals ________ per pie. A) $1.800 B) $1,000 C) $8 D) $6

-The above table gives some of the costs of the Delicious Pie Company. What is the average variable cost of producing 300 pies? A) $1,800 B) $6 C) $5 D) More information is needed to calculate the average variable cost.

-The above table gives some of the costs of the Delicious Pie Company. What is the average total cost of producing 200 pies? A) $5.00 B) $650 C) $6.50 D) More information is needed to calculate the average total cost.

-The table above gives production information for Bob's Baseball Cap Company. Bob's total cost when zero caps are produced is $200 and workers cost $10 per hour. The total fixed cost of producing 10 baseball hats per hour is A) $400. B) $200. C) $22. D) More information is needed to answer the question.

-The table above gives production information for Bob's Baseball Cap Company. Bob's total cost when zero caps are produced is $200 and workers cost $10 per hour. The total variable cost of producing 18 baseball hats per hour is A) $200.00 B) $30.00. C) $1.67. D) More information is needed to answer the question.

-The table above gives production information for Bob's Baseball Cap Company. Bob's total cost when zero caps are produced is $200 and workers cost $10 per hour. The total cost of producing 30 baseball hats per hour is A) $50. B) $200. C) $250. D) More information is needed to answer the question.

-The table above gives production information for Bob's Baseball Cap Company. Bob's total cost when zero caps are produced is $200 and workers cost $10 per hour. The average fixed cost of producing 25 baseball hats per hour is A) $1.60 B) $8.00. C) $9.60. D) More information is needed to answer the question.

-The table above gives production information for Bob's Baseball Cap Company. Bob's total cost when zero caps are produced is $200 and workers cost $10 per hour. The average variable cost of producing 10 baseball hats per hour is A) $1. B) $2. C) $20. D) More information is needed to answer the question.

-The table above gives production information for Bob's Baseball Cap Company. Bob's total cost when zero caps are produced is $200 and workers cost $10 per hour. The average total cost of producing 4 baseball hats per hour is A) $1.67. B) $50.00. C) $52.50. D) More information is needed to answer the question.

-The table above gives production information for Bob's Baseball Cap Company. Bob's total cost when zero caps are produced is $200 and workers cost $10 per hour. The marginal cost per hat of producing 30 hats per hour (instead of 25) is A) $240.00 per hat. B) $250.00 per hat. C) $8.33 per hat. D) $2.00 per hat.

-The above (incomplete) table provides information about the relationships between output and various cost measures. The total fixed cost (TFC) for the firm is A) zero. B) $45. C) $10. D) None of the above answers is correct.

-The above (incomplete) table provides information about the relationships between output and various cost measures. The total cost (TC) of producing 9 units of output is A) $180. B) $190. C) $20. D) None of the above answers is correct.

-The above (incomplete) table provides information about the relationships between output and various cost measures. The marginal cost per unit when increasing output from 14 to 17 units is A) $20. B) $30. C) $380. D) None of the above answers is correct.

-The above table shows some cost data for Tracey's Tents. What is the marginal cost of the 3rd tent? A) $25 B) $20 C) $70 D) $120

-The above table shows some cost data for Tracey's Tents. What is the average total cost when output is 3? A) $120 B) $30 C) $40 D) $50

-The above table shows some cost data for Tracey's Tents. What is the average fixed cost when 4 tents are produced? A) $50.00 B) $12.50 C) $25.00 D) $37.50

-The above table gives some cost data for Peter's Pickles. Peter's fixed cost is $20. His total cost of producing 6 barrels of pickles is A) $160. B) $180. C) $450. D) There is not enough information to answer the question.

-The above table gives some cost data for Peter's Pickles. Peter's fixed cost is $20. The marginal cost of increasing output from 3 to 4 barrels of pickles is A) $25. B) $75. C) $20. D) $50.

-The above table gives some cost data for Peter's Pickles. Peter's fixed cost is $20. The average total cost (ATC) when 5 barrels of pickles are produced is A) $22. B) $26. C) $35. D) There is not enough information to answer the question.

-The above table gives some cost data for Peter's Pickles. Peter's fixed cost is $20. Average variable cost (AVC) is lowest when output is equal to A) 1 barrel of pickles. B) 2 barrels of pickles. C) 3 barrels of pickles. D) 4 barrels of pickles.

-The table above gives the cost of producing T-shirts. The total fixed cost is ________ and the marginal cost of increasing production from 5 to 6 T shirts is ________. A) $20; $6 B) $20; $10 C) $10.40; $8 D) unable to be determined; $8

-The table above gives the cost of producing T-shirts. When 5 T-shirts are produced, the average fixed cost is ________ and the average variable cost is ________. A) $4; $10 B) $10; $6 C) $5; $3 D) $4; $6

Cost schedule -In the above table, the total fixed cost is A) $0. B) $20. C) $30. D) $50.

Cost schedule -In the above table, when output increases from 8 to 12 units, the marginal cost of one of those 4 units is A) $1.20. B) $2.00. C) $5.00. D) $15.00.

Cost schedule -In the above table, the average fixed cost of producing 15 units of output is A) $0.50. B) $2.00. C) $6.66. D) $8.66.

Cost schedule -In the above table, the average variable cost of producing 14 units of output is A) $0.175. B) $5.71. C) $7.86. D) $10.00.

Cost schedule -In the above table, the average total cost of producing 14 units of output is A) $5.71. B) $6.75. C) $7.00. D) $7.86.

A firm's average total cost is $100, its average variable cost is $90, and its total fixed cost is $1,000. Its output is A) less than 70 units. B) between 70 and 120 units. C) between 120 and 170 units. D) more than 170 units.

A firm's average total cost is $80, its average variable cost is $75, and its output is 50 units. Its total fixed cost is A) less than $100. B) between $100 and $200. C) between $200 and $300. D) more than $300.

A firm's average variable cost is $60, its total fixed cost is $3,000, and its output is 600 units. Its average total cost is A) less than $58. B) between $58 and $62. C) between $62 and $64. D) more than $64.

A firm's average variable cost is $90, its total fixed cost is $10,000, and its output is 1,000 units. Its total cost is A) less than $85,000. B) between $85,000 and $95,000. C) between $95,000 and $105,000. D) more than $105,000.

A firm's average total cost is $80, its fixed cost is $1000, and its output is 100 units. Its average variable cost A) is less than $40. B) is between $40 and $60. C) is more than $60. D) cannot be determined without more information.

A firm's marginal cost is $30, its average total cost is $50, and its output is 800 units. Its total cost of producing 801 units is A) less than $40,000. B) between $40,000 and $40,050. C) between $40,050 and $40,080. D) greater than $40,080.

A firm's marginal cost is $82, its average total cost is $50, and its output is 800 units. Its total cost of producing 801 units is A) less than $40,000. B) between $40,000 and $40,050. C) between $40,050 and $40,080. D) greater than $40,080.

The vertical distance between a firm's total cost (TC) and its total variable cost (TVC) curves A) decreases as output decreases. B) is equal to the average variable cost, AVC. C) is equal to the total fixed cost, TFC. D) is equal to the marginal cost, MC.

-In the above figure, the total fixed cost curve is curve A) A. B) B. C) C. D) none of the curves in the figure

-In the above figure, the total variable cost curve is curve A) A. B) B. C) C. D) none of the curves in the figure

-In the above figure, the total cost curve is curve A) A. B) B. C) C. D) none of the curves in the figure

-In the above figure, the relationship between costs indicates that the distance between curves A) A and B is equal to the fixed cost. B) A and B is equal to the variable cost. C) B and C is equal to the fixed cost. D) B and C is equal to the average total cost.

-Fernando charges the restaurant Flaming Fernando's $1,000 annually for use of his name. If Fernando increases the fee for use of his name, A) the restaurant's average fixed cost, average variable cost, average total cost, and marginal cost curves all shift upward. B) the restaurant's average fixed cost, average total cost, and marginal cost curves shift upward. C) the restaurant's average variable cost, average total cost, and marginal cost curves shift upward. D) the restaurant's average fixed cost and average total cost curves shift upward.

-As output increases, the slope of the curve showing the firm's average fixed cost is A) first negative, then positive. B) first positive, then negative. C) always negative. D) always positive.

-The vertical distance between a firm's average total cost curve, ATC, and its average variable cost curve, AVC, A) decreases as output increases. B) is equal to its marginal cost, MC. C) is equal to its total fixed cost, TFC. D) is equal to its average product.

-The output at which average variable cost is a minimum is ________ than the output at which ________ is a minimum. A) the same as; average total cost B) the same as; marginal cost C) less than; average total cost D) less than; marginal cost

-Which of the following curves is not U-shaped? A) average variable cost curve B) average fixed cost curve C) average total cost curve D) marginal cost curve

-In the figure above, curve C is the ________ curve. A) average fixed cost B) average variable cost C) average total cost D) marginal cost

-In the figure above, curve A is the ________ curve. A) average fixed cost B) average variable cost C) average total cost D) marginal cost

-In the figure above, curve B is the ________ curve. A) average fixed cost B) average variable cost C) average total cost D) marginal cost

-In the figure above, when 20 units are produced the marginal cost is A) less than $8. B) $8. C) more than $8 and less than $16. D) None of the above answers is correct.

-In the figure above, when 40 units are produced the average fixed cost is A) $4. B) $8. C) $12. D) $20.

-In the above figure, the marginal cost curve is curve A) A. B) B. C) C. D) D.

-In the above figure, the average fixed cost curve is curve A) A. B) B. C) C. D) D.

-In the above figure, the average variable cost curve is curve A) A. B) B. C) C. D) D.

-In the above figure, the average total cost curve is curve A) A. B) B. C) C. D) D.

-In the above figure, as output increases, the distance between curves B and C decreases because A) total cost decreases as output increases. B) average fixed cost decreases as output increases. C) there are diminishing returns to average total cost. D) there are increasing marginal costs as output increases.

-In the above figure, curve D slopes downward because A) average fixed costs decrease as output increases. B) all costs decrease as output increases. C) there are diminishing returns. D) there are decreasing marginal costs.

-In the above figure, the intersection of curves A and C is the point at which A) average total cost is minimized. B) average variable cost is minimized. C) average fixed cost is minimized. D) total product is maximized.

-In the above figure, the intersection of curves A and B is the point at which A) average total cost is minimized. B) average variable cost is minimized. C) average fixed cost is minimized. D) total product is maximized.

-The above figure shows the costs at Barney's Bagel Bakery. At which of the following amounts of output is the AFC be the lowest? A) at 2000 bagels B) at 3000 bagels C) at 3500 bagels D) None of the above because the AFC is constant regardless of how many bagels are produced each day.

-The above figure shows the costs at Barney's Bagel Bakery. As the amount of output increases, the AVC curve approaches the ATC curve because the A) TFC curve (not shown) slopes down. B) AFC curve (not shown) slopes down. C) MC curve is rising. D) AVC curve is rising.

-The above figure shows the costs at Barney's Bagel Bakery. After 3000 bagels are produced each day, the ATC curve starts to slope upward because the A) MC curve slopes upward. B) MC exceeds the ATC. C) AFC curve (not shown) starts to slope upward. D) None of the above answers is correct.

-The above figure shows the costs at Barney's Bagel Bakery. Up to which level of output will increasing marginal returns in production be experienced at Barney's Bagel Bakery? A) up to 500 bagels B) up to 2000 bagels C) up to 3000 bagels D) up to 3500 bagels

-Based on the above figure of the costs at Barney's Bagel Bakery, at which level of output will diminishing marginal returns first occur? A) at 1 bagel B) at 500 bagels C) at 2000 bagels D) at 3000 bagels

-Based on the above figure of the costs at Barney's Bagel Bakery, at which of the following levels of output does the marginal product of labor equal the average product of labor? A) at 500 bagels B) at 2000 bagels C) at 3000 bagels D) None of the above because the marginal and average products of labor can never be equal.

-The above figure shows the costs at Barney's Bagel Bakery. For which of the following levels of output does the marginal product of labor exceed the average product of labor? A) at 1000 bagels daily B) at 2000 bagels daily C) at 3000 bagels daily D) all of the above

-The above figure shows the costs at Barney's Bagel Bakery. For which of the following levels of output does the average product of labor exceed the marginal product of labor? A) at 1000 bagels daily B) at 2000 bagels daily C) at 3000 bagels daily D) all of the above

-Some of the cost curves for Ike's Ice Cream Kitchen are given in the above figure. At which of the following levels of output will AFC be the lowest? A) at 0 gallons B) at 10 gallons C) at 40 gallons D) at 70 gallons

As illustrated in the above figure, after 40 gallons are produced each hour at Ike's Ice Cream Kitchen, the AVC curve starts to slope upward. The AVC starts to slope upward because the A) MC curve slopes upward. B) MC exceeds the AVC. C) ATC curve has not yet reached its minimum. D) None of the above answers is correct.

As illustrated in the above figure, after 60 gallons are produced each hour at Ike's Ice Cream Kitchen, the ATC curve starts to slope upward. The ATC starts to slope upward because the A) MC curve slopes upward. B) MC exceeds the ATC. C) distance between the ATC and the AVC curve is shrinking. D) None of the above answers is correct.

Based on the above figure, up to which level of output will Ike's Ice Cream Kitchen have increasing marginal returns? A) only at 0 gallons B) up to 10 gallons C) up to 40 gallons D) up to 60 gallons

Based on the above figure, at which level of output does diminishing marginal returns first occur at Ike's Ice Cream Kitchen? A) at 0 gallons B) at 10 gallons C) at 40 gallons D) at 60 gallons

Some of the cost curves for Ike's Ice Cream Kitchen are given in the above figure. At which of the following levels of output does the marginal product of labor equal the average product of labor? A) at 0 gallons B) at 10 gallons C) at 40 gallons D) at 60 gallons

Based on the above figure, for which of the following levels of output at Ike's Ice Cream Kitchen does the marginal product of labor exceed the average product of labor? A) at 10 gallons B) at 40 gallons C) at 70 gallons D) all of the above

Based on the above figure, for which of the following amounts of output at Ike's Ice Cream Kitchen does the average product of labor exceed the marginal product of labor? A) at 10 gallons B) at 40 gallons C) at 70 gallons D) all of the above

The marginal cost (MC) curve intersects the A) ATC, AVC, and AFC curves at their minimum points. B) ATC and AFC curves at their minimum points. C) AVC and AFC curves at their minimum points. D) ATC and AVC curves at their minimum points.

If average variable cost is decreasing as output increases, then marginal cost is definitely A) decreasing as output increases. B) increasing as output increases. C) less than average variable cost. D) greater than average variable cost.

When marginal cost is greater than average total cost, the A) marginal cost decreases as output increases. B) marginal cost does not change as output increases. C) average total cost increases as output increases. D) average total cost decreases as output increases.

If marginal cost is less than average variable cost and output increases, average total cost ________ and average variable cost ________. A) increases; increases B) decreases; decreases C) decreases; increases D) increases; decreases

If marginal cost exceeds average variable cost but is less than average total cost, then as output increases average total cost ________ and average variable cost ________. A) increases; decreases B) decreases; decreases C) increases; increases D) decreases; increases

If marginal cost is less than average total cost, then ________ is ________. A) average total cost; falling B) average variable cost; falling C) marginal cost; falling D) marginal cost; rising

The marginal cost curve passes through the ________ points of the ________ cost curve and the ________ cost curve. A) minimum; average total; average variable B) minimum; average total; average fixed C) maximum; total cost; total variable D) minimum; average variable; average fixed

If marginal cost exceeds average variable cost, then ________ cost is ________ as output increases. A) average total; at a maximum B) average total; falling C) average variable; rising D) average fixed; at a maximum

Average variable cost is at a minimum at the same amount of output at which A) average product is at a maximum. B) marginal product is at a maximum. C) average product is at a minimum. D) marginal product is at a minimum.

The range of output over which a firm's average variable cost is decreasing is the same as the range over which its A) marginal cost is increasing. B) average fixed cost is decreasing. C) average product is increasing. D) average product is decreasing.

If as output increases average product increases, then ________. A) average total cost decreases B) average fixed cost decreases C) marginal cost decreases D) average variable cost decreases

The output at which average product is a maximum is the same output at which ________ is a minimum. A) average fixed cost B) average variable cost C) average total cost D) marginal cost

Increasing marginal returns means that as the firm expands its output, its A) long-run average total cost increases. B) long-run average total cost decreases. C) short-run average total cost increases. D) short-run average total cost decreases.

Marginal cost eventually increases because A) of the law of diminishing returns. B) eventually each additional worker produces a successively smaller addition to output. C) the marginal product of the variable input eventually falls. D) All of the above answers are correct.

A technological change that increases productivity ________ marginal product and ________ marginal cost. A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases