292. Multiple Choice: With one input fixed, a firm will fin...
Question With one input fixed, a firm will find that as it attempts to produce more, the total
product curve will increase at a decreasing rate and its marginal product curve will be:
293. Multiple Choice: Table: Linda‘s Copy Shop Production R...
Question Table: Linda‘s Copy Shop Production
Reference: Ref 11-28
(Table: Linda‘s Copy Shop Production) Look at the table Linda’s Copy Shop Production.
Linda‘s production runs into diminishing returns to her variable inputs when she employs
the ________ unit.
294. Multiple Choice: Janet’s poodle grooming salon has a t...
Question Janet’s poodle grooming salon has a total cost curve expressed by the equation TC =
100 + 3Q2, where Q is the quantity of dogs groomed. Given this expression, Janet is
operating in the:
Answer long run.
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295. Multiple Choice: Janet’s poodle grooming salon has a t...
Question Janet’s poodle grooming salon has a total cost curve expressed by the equation TC =
100 + 3Q2, where Q is the quantity of dogs groomed. Given this expression, if Janet
grooms five dogs, her total costs will be:
Answer $100.
296. Multiple Choice: Janet’s poodle grooming salon has a t...
Question Janet’s poodle grooming salon has a total cost curve expressed by the equation TC =
100 + 3Q2, where Q is the quantity of dogs groomed. Janet notices that as she grooms
more dogs, her total cost curve:
297. Multiple Choice: A firm‘s total fixed cost:
Question A firm’s total fixed cost:
298. Multiple Choice: Reference: Ref 11-29 (Table: Lindsay…
Question
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Reference: Ref 11-29
(Table: Lindsay‘s Farm) Look at the table Lindsay’s Farm. Lindsay‘s fixed cost of
production equals:
299. Multiple Choice: Reference: Ref 11-29 (Table: Lindsay…
Question
Reference: Ref 11-29
(Table: Lindsay‘s Farm) Look at the table Lindsay’s Farm. Lindsay‘s variable costs of
production:
Answer stay constant.
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300. Multiple Choice: Reference: Ref 11-29 (Table: Lindsay…
Question
Reference: Ref 11-29
(Table: Lindsay‘s Farm) Look at the table Lindsay’s Farm. When Lindsay produces 140
units of produce, her total cost is:
Answer $200.
301. Multiple Choice: Reference: Ref 11-29 (Table: Lindsay…
Question
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Reference: Ref 11-29
(Table: Lindsay‘s Farm) Look at the table Lindsay’s Farm. When Lindsay produces 50
units of produce, her total cost is:
302. Multiple Choice: Reference: Ref 11-30 (Table: Bonnie‘...
Question
Reference: Ref 11-30
(Table: Bonnie’s Production Function for Good Z) Look at the table Bonnie’s Production
Function for good Z. The marginal product of labor of the second worker is ________
units of good Z.
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303. Multiple Choice: Reference: Ref 11-30 (Table: Bonnie‘…
Question
Reference: Ref 11-30
(Table: Bonnie’s Production Function for Good Z) Look at the table Bonnie‘s Production
Function for good Z. Diminishing returns to labor occurs when Bonnie hires the
________ worker.
Answer second
304. Multiple Choice: Reference: Ref 11-30 (Table: Bonnie‘…
Question
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Reference: Ref 11-30
(Table: Bonnie’s Production Function for Good Z) Look at the table Bonnie‘s Production
Function for good Z. Suppose Bonnie spends $300 per month to rent the building, $100
per month to pay for insurance for her business, and $100 per worker per month for
every worker she hires. Given this information, Bonnie’s fixed costs equal:
305. Multiple Choice: Reference: Ref 11-30 (Table: Bonnie‘…
Question
Reference: Ref 11-30
(Table: Bonnie’s Production Function for Good Z) Look at the table Bonnie‘s Production
Function for good Z. The costs that vary with Bonnie’s level of production are her:
Answer fixed costs.
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306. Multiple Choice: Diminishing returns are a reason:
Question Diminishing returns are a reason:
Answer the marginal cost curve is downward sloping.
307. Multiple Choice: When a firm produces a small amount o...
Question When a firm produces a small amount of output, the spreading effect:
308. Multiple Choice: As production increases and the fixed…
Question As production increases and the fixed cost is divided by larger quantities of output, this
leads to lower average fixed cost. This is referred to as the ________ effect.
Answer diminishing returns
309. Multiple Choice: When AVC eventually increases as outp…
Question When AVC eventually increases as output increases, this is referred to as the
________ effect.
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310. Multiple Choice: If ATC is equal to MC, then the firm ...
Question If ATC is equal to MC, then the firm is operating:
311. Multiple Choice: The curve that illustrates the relati…
Question 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:
312. Multiple Choice: When all of a firm‘s inputs are doubl...
Question When all of a firm‘s inputs are doubled and this results in the firm‘s level of production
more than doubling, a firm is operating:
Answer on the upward-sloping portion of its LRATC curve.
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313. Multiple Choice: A firm finds that its long-run averag...
Question A firm finds that its long-run average total costs increase as it produces more output.
This firm is experiencing:
Answer economies of scale.
314. Multiple Choice: Economies and diseconomies of scale a…
Question Economies and diseconomies of scale are associated with the:
315. Essay: In the short run, why is it believed ...
Question In the short run, why is it believed that the total product curve increases at a decreasing
rate when more labor is added to the production function?
316. Essay: Some people use the phrase, “Th…
Question Some people use the phrase, “There are too many cooks in the kitchen” to describe
any chaotic scene where nothing gets done. Relate this phrase to short-run production
functions.
317. Essay: Suppose a short-run production functi...
Question Suppose a short–run production function always increases at a constant rate of three
units of output for every additional worker added. What does this imply about the
marginal product of labor? Is this realistic? Explain.
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318. Essay: You have rented a one-room apartment ...
Question You have rented a one-room apartment and it is time to pay the bills. You pay the rent,
the basic cable bill, the electricity bill, and your grocery bill. Which of these are good
examples of fixed costs and which are variable costs? Explain your reasoning.
319. Essay: Reference: Ref 11-25 (Table: Marie‘s…
Question
Reference: Ref 11-25
(Table: Marie’s Textbook Company) Look at the table Marie‘s Textbook Company. Marie
has a small publishing company that produces textbooks. She has fixed costs of $500
per month and hires workers for $2,000 each per month. The table shows Marie’s
monthly production function. With as much precision as possible, calculate the
following:
a) total cost of production when four workers are employed
b) the output level that produces the lowest average total cost
c) the price that Marie must charge in order to break even on the production of 130
textbooks
320. Essay: Describe the shape of the AFC curve a...
Question Describe the shape of the AFC curve and explain why it takes this shape. Can AFC
ever intersect the x-axis?
Answer
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321. Essay: Consider the statement, “When t...
Question Consider the statement, “When the marginal cost is rising, the average total cost must
also be rising.” Is this statement true or false? Explain your reasoning.
322. Essay: A firm employs capital as a fixed inp...
Question A firm employs capital as a fixed input and labor as a variable input in the short run. If
the cost of capital falls, what will happen to the AVC, ATC, and MC curves? Explain.
323. Essay: What are some factors that contribute...
Question What are some factors that contribute to a firm achieving increasing returns to scale (or
economies of scale) in the long run?
324. Essay: Reference: Ref 11-26 (Table: Marie‘s…
Question
Reference: Ref 11-26
(Table: Marie’s Production and Costs) Look at the table Marie’s Production and Costs.
Marie has a small publishing company that produces textbooks. She has fixed costs of
$500 per month and hires workers for $2,000 each per month. Some of Marie’s monthly
production and cost information is in the accompanying table. Complete the table by
calculating the missing information.
Answer
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