Question 1

A characteristic of the long run that is not available in the short run is that a firm is free to vary its output.

Accepted Answer

A) True 
 B)False

Question 2

Figure 11-5 
-Refer to Figure 11-5. Identify the curves in the diagram.

Accepted Answer

A)   E = average fixed cost curve; F = variable cost curve; G = total cost curve; H = marginal cost curve
B)   E = marginal cost curve; F = total cost curve; G = variable cost curve; H = average fixed cost curve
C)   E = average fixed cost curve; F = average total cost curve; G = average variable cost curve; H = marginal cost curve
D)   E = marginal cost curve; F = average total cost curve; G = average variable cost curve; H = average fixed cost curveE) B) and C)
F) All of the above

Question 3

What is the marginal product of labor and what is the average product of labor.

Accepted Answer

The marginal product of labor is the add...

Question 4

An avocado orchard employs five full-time workers. Currently, the average product of labor is 120 pounds of avocados per day. The orchard hires a 6th full-time worker and his marginal product is 150 pounds of avocados. The average product of the six workers will now be

Accepted Answer

A)   more than 120 pounds.
B)   less than 120 pounds.
C)   equal to 120 pounds.
D)   less than the marginal product of labor.E) None of the above
F) B) and C)

Question 5

In his book The Wealth of Nations, Adam Smith employed the example of a pin factory in order to explain what economic concept?

Accepted Answer

A)   the relationship between the marginal and average product of labor
B)   the law of diminishing returns
C)   why no firm would want to hire so many workers as to experience a negative marginal product of labor
D)   the division of laborE) A) and B)
F) B) and C)

Question 6

The additional output a firm produces by hiring one more worker is called the marginal product of labor.

Accepted Answer

A) True 
 B)False

Question 7

Economic costs of production differ from accounting costs in that

Accepted Answer

A)   economic costs include expenditures for hired resources while accounting costs do not.
B)   economic costs add the opportunity costs of a firm using its own resources while accounting costs do not.
C)   accounting costs include expenditures for hired resources while economic costs do not.
D)   accounting costs are always larger than economic cost.E) A) and C)
F) None of the above

Question 8

If average product is decreasing, then marginal product must be negative.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following are examples of a firm experiencing a positive technological change?
a. A firm is able to reduce its inputs by 15 percent and still produce the same level of output.
b. A seminar attended by the firm's workers makes them more productive.
c. A firm adds 5 percent to its workforce and is able to maintain its initial level of output.
d. A firm restructures its distribution system and is able to save on its shipping times.
e. A firm rearranges its warehouse and finds that it can use fewer workers to maintain its productivity level.

Accepted Answer

Examples a., b., d., and e. are examples...

Question 10

When a firm experiences negative technological change it can produce the same output with fewer inputs.

Accepted Answer

A) True 
 B)False

Question 11

Figure 11-5 
-Refer to Figure 11-5. The vertical difference between curves F and G measures

Accepted Answer

A)   average fixed costs.
B)   marginal costs.
C)   fixed costs.
D)   sunk costs.E) C) and D)
F) B) and D)

Question 12

Which of the following is an example of a long-run adjustment?

Accepted Answer

A)   Your university offers Saturday morning classes next fall.
B)   Ford Motor Company lays off 2,000 assembly line workers.
C)   A soybean farmer turns on the irrigation system after a month long dry spell.
D)   Wal-Mart builds another Supercenter.E) All of the above
F) B) and C)

Question 13

If average total cost is falling, marginal cost must also be falling.

Accepted Answer

A) True 
 B)False

Question 14

An explicit cost is defined as

Accepted Answer

A)   a cost that does not change as output changes.
B)   a nonmonetary opportunity cost.
C)   a cost that involves spending money.
D)   a nonmonetary accounting cost.E) C) and D)
F) A) and D)

Question 15

Costs that change as output changes are called incremental costs.

Accepted Answer

A) True 
 B)False

Question 16

A firm has successfully adopted a positive technological change when

Accepted Answer

A)   it can produce more output using the same inputs.
B)   it produces less pollution in its production process.
C)   it can pay its workers less yet increase its output.
D)   it sees an increase in worker productivity.E) C) and D)
F) A) and B)

Question 17

Long-run cost curves are U-shaped because

Accepted Answer

A)   of the law of demand.
B)   of the law of diminishing returns.
C)   of economies and diseconomies of scale.
D)   of the law of supply.E) A) and D)
F) B) and D)

Question 18

Average total cost is equal to

Accepted Answer

A)   average fixed cost minus average variable cost.
B)   total cost divided by the level of output.
C)   marginal cost plus variable cost.
D)   total cost divided by the number of workers.E) None of the above
F) C) and D)

Question 19

If we have information about workers' marginal products, then total and average product can be found by

Accepted Answer

A)   dividing marginal costs by the number of workers.
B)   multiplying the average marginal product times the number of workers.
C)   summing the marginal values to find the total and multiplying it times the number of workers to get the average.
D)   summing the marginal values to find the total and dividing it by the number of workers to get the average.E) A) and C)
F) B) and D)

Question 20

The shape of the average total cost curve is determined by the shape of

Accepted Answer

A)   the marginal cost curve.
B)   the average fixed cost curve.
C)   the average product curve.
D)   the firm's production function.E) B) and D)
F) All of the above

Exam 11: Technology, Production, and Costs

If we have information about workers' marginal products, then total and average product can be found by

Correct Answer
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An explicit cost is defined as

Correct Answer
verified

Correct Answer
verified
Examples a., b., d., and e. are examples...
View Answer

When a firm experiences negative technological change it can produce the same output with fewer inputs.

Correct Answer
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A firm has successfully adopted a positive technological change when

Correct Answer
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Figure 11-5 -Refer to Figure 11-5. Identify the curves in the diagram.

Correct Answer
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Which of the following is an example of a long-run adjustment?

Correct Answer
verified

Economic costs of production differ from accounting costs in that

Correct Answer
verified

Long-run cost curves are U-shaped because

Correct Answer
verified

The additional output a firm produces by hiring one more worker is called the marginal product of labor.

Correct Answer
verified

Average total cost is equal to

Correct Answer
verified

In his book The Wealth of Nations, Adam Smith employed the example of a pin factory in order to explain what economic concept?

Correct Answer
verified

Figure 11-5 -Refer to Figure 11-5. The vertical difference between curves F and G measures

Correct Answer
verified

If average product is decreasing, then marginal product must be negative.

Correct Answer
verified

What is the marginal product of labor and what is the average product of labor.

Correct Answer
verified
The marginal product of labor is the add...
View Answer

A characteristic of the long run that is not available in the short run is that a firm is free to vary its output.

Correct Answer
verified

An avocado orchard employs five full-time workers. Currently, the average product of labor is 120 pounds of avocados per day. The orchard hires a 6th full-time worker and his marginal product is 150 pounds of avocados. The average product of the six workers will now be

Correct Answer
verified

The shape of the average total cost curve is determined by the shape of

Correct Answer
verified

Costs that change as output changes are called incremental costs.

Correct Answer
verified

If average total cost is falling, marginal cost must also be falling.

Correct Answer
verified

Exam 11: Technology, Production, and Costs

If we have information about workers' marginal products, then total and average product can be found by

Correct AnswerverifiedShow Answer

An explicit cost is defined as

Correct AnswerverifiedShow Answer

Correct AnswerverifiedExamples a., b., d., and e. are examples...View AnswerShow Answer

When a firm experiences negative technological change it can produce the same output with fewer inputs.

Correct AnswerverifiedShow Answer

A firm has successfully adopted a positive technological change when

Correct AnswerverifiedShow Answer

Figure 11-5 -Refer to Figure 11-5. Identify the curves in the diagram.

Correct AnswerverifiedShow Answer

Which of the following is an example of a long-run adjustment?

Correct AnswerverifiedShow Answer

Economic costs of production differ from accounting costs in that

Correct AnswerverifiedShow Answer

Long-run cost curves are U-shaped because

Correct AnswerverifiedShow Answer

The additional output a firm produces by hiring one more worker is called the marginal product of labor.

Correct AnswerverifiedShow Answer

Average total cost is equal to

Correct AnswerverifiedShow Answer

In his book The Wealth of Nations, Adam Smith employed the example of a pin factory in order to explain what economic concept?

Correct AnswerverifiedShow Answer

Figure 11-5 -Refer to Figure 11-5. The vertical difference between curves F and G measures

Correct AnswerverifiedShow Answer

If average product is decreasing, then marginal product must be negative.

Correct AnswerverifiedShow Answer

What is the marginal product of labor and what is the average product of labor.

Correct AnswerverifiedThe marginal product of labor is the add...View AnswerShow Answer

A characteristic of the long run that is not available in the short run is that a firm is free to vary its output.

Correct AnswerverifiedShow Answer

An avocado orchard employs five full-time workers. Currently, the average product of labor is 120 pounds of avocados per day. The orchard hires a 6th full-time worker and his marginal product is 150 pounds of avocados. The average product of the six workers will now be

Correct AnswerverifiedShow Answer

The shape of the average total cost curve is determined by the shape of

Correct AnswerverifiedShow Answer

Costs that change as output changes are called incremental costs.

Correct AnswerverifiedShow Answer

If average total cost is falling, marginal cost must also be falling.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Examples a., b., d., and e. are examples...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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The marginal product of labor is the add...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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