Economics Chapter 11 Reference Ref 112 Figure The Marginal Product

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Test Canvas : TestBanks Chapter 11: Behind the Supply Curve: Inputs and Costs

Microeconom ics, 3e

Test Canvas: TestBanks Chapter 11: Behind the Supply Curve:

Inputs and Costs

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1. True/False: Farmers in the United States grow abo…

Question Farmers in the United States grow about three times as much wheat per acre as do

farmers in Western Europe.

2. True/False: Scott operates a business that takes ...

Question 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.

3. True/False: In the long run, every input availabl…

Question In the long run, every input available to a television manufacturer is a fixed input.

4. True/False: Joan adds one more employee to her co...

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Question Joan adds one more employee to her construction company. The additional output

produced by this employee represents the average product of this employee.

5. True/False: The total product curve for the Wallm…

Question 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 associated with producing greeting cards.

6. True/False: The slope of the total product curve ...

Question The slope of the total product curve is equal to the average product of labor.

7. True/False: As more labor is added to a fixed amo...

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

labor decreases.

8. True/False: When diminishing returns exist, then ...

Question When diminishing returns exist, then the marginal cost curve is upward-sloping.

9. True/False: As a firm increases production in the…

Question As a firm increases production in the short run, the marginal cost of output increases

because the marginal product of the variable input decreases.

10. True/False: The short-run average total cost curv…

Question 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.

11. True/False: In the short run, the average total c…

Points: 0

Question In the short run, the average total cost curve always lies above the average variable cost

curve.

12. True/False: If the average total cost curve and t...

Question If the average total cost curve and the average variable cost curveare both U-shaped,

then the minimum point of the average total cost curve must lie above the minimum

point of the average variable cost curve.

13. True/False: If average total cost is declining, m...

Question If average total cost is declining, marginal cost cannot be increasing.

14. True/False: In the short run, if marginal cost is…

Question In the short run, if marginal cost is higher than average total cost, producing an extra

unit of output must raise average total cost.

15. True/False: In the short run, the average total c…

Question In the short run, the average total cost curve reaches its minimum point at a smaller

level of output than the short-run marginal cost curve reaches its minimum.

16. True/False: In some complex production processes ...

Question In some complex production processes (such as nuclear power plants), some inputs

have to be treated as being fixed even in the long run.

17. True/False: A production function that is charact…

Question A production function that is characterized by economies of scale will not be subject to

the operation of diminishing returns.

18. True/False: Diminishing returns are one explanati…

Question Diminishing returns are one explanation for diseconomies of scale.

Points: 0

19. True/False: If a firm builds a larger plant and i…

Question If a firm builds a larger plant and its long-run average total cost does not change, the

firm has constant returns to scale.

20. True/False: The advantage of specialization in pr...

Question The advantage of specialization in production is one of the primary reasons for

decreasing returns to scale.

21. Multiple Choice: A ________ is an organization that pr…

Question A ________ is an organization that produces goods or services for sale.

Answer production function

22. Multiple Choice: In the short run:

Question In the short run:

Answer all inputs are fixed.

23. Multiple Choice: The ________ is the increase in outpu...

Question The ________ is the increase in output that is produced when hiring an additional

worker.

Answer average product

Points: 0

24. Multiple Choice: Lauren has 11 people working in her t…

Question Lauren has 11 people working in her tangerine grove. The marginal product of the

eleventh worker equals 13 bushels of tangerines. If she hires a twelfth worker, the

marginal product of that worker will equal:

Answer 14 bushels.

25. Multiple Choice: The total product curve:

Question The total product curve:

Answer shows the relation between output and the quantity of a variable input for varying

levels of the fixed input.

26. Multiple Choice: Reference: Ref 11-1 (Table: Labor an…

Question

Reference: Ref 11-1

(Table: Labor and Output) Look at the table Labor and Output. The marginal product of

the fifth worker is:

Points: 0

Answer 8.

27. Multiple Choice: Reference: Ref 11-1 (Table: Labor an…

Question

Reference: Ref 11-1

(Table: Labor and Output) Look at the table Labor and Output. The marginal product of

the fourth worker is:

Answer 9.

28. Multiple Choice: The term diminishing returns refers to:

Question The term diminishing returns refers to:

Answer a falling interest rate that can be expected as one’s investment in a single asset

increases.

Points: 0

29. Multiple Choice: The idea of diminishing returns to an…

Question 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

________.

Answer increase at an increasing rate

30. Multiple Choice: Diminishing returns to an input occur:

Question Diminishing returns to an input occur:

Answer when all inputs are fixed.

31. Multiple Choice: If two firms are identical in all res...

Question If two firms are identical in all respects except that one has more capital than another,

the total product curve for the firm with more capital:

Answer must equal the total product curve for the firm with less capital.

32. Multiple Choice: If two firms are identical in all res...

Question If two firms are identical in all respects except that one has more capital than another,

the marginal product curve for the firm with more capital:

Answer must equal the marginal product curve for the firm with less capital.

Points: 0

33. Multiple Choice: Figure: The Marginal Product of Labor…

Question Figure: The Marginal Product of Labor

Reference: Ref 11-2

(Figure: The Marginal Product of Labor) Look at the figure The Marginal Product of

Labor. The total product for three workers is:

34. Multiple Choice: Figure: The Marginal Product of Labor…

Question

Points: 0

Figure: The Marginal Product of Labor

Reference: Ref 11-2

(Figure: The Marginal Product of Labor) Look at the figure The Marginal Product of

Labor. The total product of labor for five workers is:

35. Multiple Choice: Figure: The Marginal Product of Labor…

Question

Points: 0

Figure: The Marginal Product of Labor

Reference: Ref 11-2

(Figure: The Marginal Product of Labor) Look at the figure The Marginal Product of

Labor. The total product of labor for eight workers is:

Answer 40 bushels.

36. Multiple Choice: In economics, the short run is define…

Question In economics, the short run is defined as:

Answer less than 1 year.

37. Multiple Choice: In economics, the short run is:

Question In economics, the short run is:

Answer less than 1 week.

Points: 0

38. Multiple Choice: An input whose quantity can be change…

Question An input whose quantity can be changed in the short run is:

Answer a marginal input.

39. Multiple Choice: An input whose quantity cannot be cha...

Question An input whose quantity cannot be changed in the short run is:

Answer a marginal input.

40. Multiple Choice: A fixed input is one:

Question A fixed input is one:

Answer that exists in nature and there is only so much of it.

41. Multiple Choice: The long run is a planning period:

Question The long run is a planning period:

Points: 0

42. Multiple Choice: In the long run:

Question In the long run:

Answer all inputs are fixed.

43. Multiple Choice: A curve that shows the quantities of ...

Question A curve that shows the quantities of output that can be obtained from different quantities

of a variable input, assuming other inputs are fixed, is called the ________ curve.

Answer total input

44. Multiple Choice: A total product curve indicates the r…

Question A total product curve indicates the relationship between:

Answer a variable input and price.

45. Multiple Choice: The marginal product of labor is:

Question The marginal product of labor is:

Answer the change in labor divided by the change in total product.

Points: 0

46. Multiple Choice: A farm can produce 1,000 bushels of w…

Question 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:

Answer 100 bushels.

47. Multiple Choice: When Caroline‘s dress factory hires t…

Question 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 when two to four workers are

hired is

Answer upward sloping.

48. Multiple Choice: When Caroline‘s dress factory hires t…

Question 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 when two to four workers are

hired is

Points: 0

49. Multiple Choice: When Caroline‘s dress factory hires t…

Question 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 46. The marginal product of the third and fourth workers is

Answer increasing and positive

50. Multiple Choice: Reference: Ref 11-3 (Total Product a…

Question

Reference: Ref 11-3

(Total Product and Marginal Product) Look at the table Total Product and Marginal

Product. The marginal product of the second worker is:

Answer 10.

51. Multiple Choice: Reference: Ref 11-3 (Total Product a…

Question

Points: 0

Reference: Ref 11-3

(Total Product and Marginal Product) Look at the table Total Product and Marginal

Product. The marginal product of the fourth worker is ________ units.

52. Multiple Choice: Reference: Ref 11-3 (Total Product a…

Question

Reference: Ref 11-3

(Total Product and Marginal Product) Look at the table Total Product and Marginal

Product. Negative marginal returns begin when the ________ worker is added.

Points: 0

53. Multiple Choice: Figure: The Total Product Reference: …

Question Figure: The Total Product

Reference: Ref 11-4

(Figure: The Total Product) Look at the figure The Total Product. Between points A and

B the marginal product of labor is:

Answer increasing.

54. Multiple Choice: Figure: The Total Product Reference: …

Question Figure: The Total Product

Reference: Ref 11-4

(Figure: The Total Product) Look at the figure The Total Product. Labor added L1 and up

to L2 is:

Points: 0

55. Multiple Choice: Figure: The Total Product Reference: …

Question Figure: The Total Product

Reference: Ref 11-4

(Figure: The Total Product) Look at the figure The Total Product. As labor is hired

between L1 and L2, the ________ is ________ and the ________ is ________.

56. Multiple Choice: Figure: The Total Product Reference: …

Question Figure: The Total Product

Reference: Ref 11-4

(Figure: The Total Product) Look at the figure The Total Product. For hiring labor

between zero and L1, which of the following statements is true?

Points: 0

57. Multiple Choice: Figure: The Total Product Reference: …

Question Figure: The Total Product

Reference: Ref 11-4

(Figure: The Total Product) Look at the figure The Total Product. After hiring L2 labor

and producing at point B on the total product curve, hiring more labor beyond L2 would

result in which of the following statements being true of the total product curve?

58. Multiple Choice: Figure: The Total Product Reference: …

Question

Points: 0

Figure: The Total Product

Reference: Ref 11-4

(Figure: The Total Product) Look at the figure The Total Product. When L2 labor is hired,

the total product is at a ________and the marginal product of labor is________.

59. Multiple Choice: Figure: The Total Product Reference: …

Question Figure: The Total Product

Reference: Ref 11-4

(Figure: The Total Product) Look at the figure The Total Product. If after hiring L2 labor,

the firm hires more labor, the total product will ________ because the marginal product

of labor is ________.

Points: 0

60. Multiple Choice: When an additional unit of a variable...

Question When an additional unit of a variable input adds less to total product than the previous

unit, the firm must be experiencing:

Answer increasing returns.

61. Multiple Choice: Diminishing marginal returns occur when:

Question Diminishing marginal returns occur when:

Answer each additional unit of a variable factor adds more to total output than the previous

unit.

62. Multiple Choice: You own a small deli that produces sa…

Question You own a small deli that produces sandwiches, soups, and other items for customers

in your town. Which of the following is a fixed input for the production function at your

deli?

63. Multiple Choice: You own a small deli that produces sa…

Question You own a small deli that produces sandwiches, soups, and other items for customers

in your town. Which of the following is a decision most likely to be made in the long run

at your deli?

Points: 0