Alec quiz 5

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Karachi School for Business & Leadership *

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310

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Economics

Date

Nov 24, 2024

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docx

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Attempt History Attempt Time Score KEPT Attempt 2 49 minutes 18 out of 20 LATEST Attempt 2 49 minutes 18 out of 20 Attempt 1 59 minutes 15 out of 20 Score for this attempt: 18 out of 20 Submitted Mar 22 at 11:42am This attempt took 49 minutes. Question 1 0 / 1 pts How do economists distinguish between the long run and the short run? Correct Answer In the short run, at least one resource is fixed; in the long run, all resources are variable. You Answered In the long run, all resources are variable; in the short run, all resources are fixed. Incorrect. In the short run, not all resources are fixed. Resources have higher costs in the short run than in the long run. There are diminishing returns in the short run, but increasing returns in the long run. Question 2 1 / 1 pts If Jimmy’s Dairy, cheese producer, keeps hiring more workers for their production lines, the total production will Correct!

eventually peak then decrease. Correct. Total production falls because marginal product eventually becomes negative (reducing the total production). keep rising at a decreasing rate. eventually peak then remain at the peak. keep rising at an increasing rate. Question 3 1 / 1 pts In order to reduce the cost per unit over the long run, companies would add more workers to increase scale. decrease labor and reduce scale. Add managers Correct! add more capital to increase scale. Correct. Capital investment can increase productivity and counter diminishing returns. Question 4 1 / 1 pts

How much output can this cheese manufacturer produce if it employs four workers? 3 15 thousand pounds per day. 2 10 thousand pounds per day.

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4 65 thousand pounds per day. Correct! 1 60 thousand pounds per day. Correct. On the graph, 4 workers yield a production of 60 thousand pounds per day. Question 5 1 / 1 pts ________ occur when the marginal gain in output diminishes as each additional unit of input is added. Diminishing average returns. Correct! Diminishing marginal returns Correct. Diminishing marginal costs. Diminishing variable returns. Question 6 1 / 1 pts Using the following table with the resources and their cost per unit, which production choice would a business decide to use? Cost per unit $100 $30 $20 Capita l Labo r Lan d Production choice 1 2 1 2 Production choice 1 5 2

2 Production choice 3 2 4 3 Correct! Production choice 1 Correct. Production choice 1 is the least costly with $270. Production choice 2 Production choice 3 All production choices are equivalent. Question 7 1 / 1 pts If a firm’s average total cost is increasing, then marginal cost must be higher than total cost. marginal cost must be lower than average total cost. Correct! marginal cost must be higher than average total cost Correct. If marginal cost is greater than average total cost, then average total cost. marginal cost must be lower than total cost.

Question 8 1 / 1 pts See the cost information in the table below. When this firm produces 5 units of output, the average total and average variable cost respectively are Quantity produced/day Total Cost Variable Cost 0 $100 0 1 $150 $50 2 $175 $75 3 $225 $125 4 $300 $200 5 $400 $300 6 $550 $450 $100, $0 $400, $300 $75, $50 Correct! $80, $60 Correct. ATC = $400/5 and AVC = $300/5 = $60 Question 9 1 / 1 pts When a long-run average cost curve illustrates economies of scale it will be ________.

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downward-sloping and then flat. Correct! downward-sloping Correct. It illustrates falling average cost. Flat. Upward-sloping. Question 10 1 / 1 pts Jimmy’s Dairy produces cheddar cheese. Which of the following would be considered capital input for Jimmy’s Dairy? Correct! the cheese molds and machines Correct. Capital refers to the manufactured goods used in the production process. cow pastures milk cows Question 11 1 / 1 pts

In the short term, as production reaches high levels, Correct! all per unit costs increase except average fixed cost. Correct. Fixed cost divided by larger and larger quantities will keep falling. all per unit costs increase except average variable cost. all per uni costs increase except marginal cost. all per unit costs increase. Question 12 1 / 1 pts A construction company in the United States, in comparison with a small economically disadvantaged country, will most likely use less technology that the poorer nation. fewer capital resources. the same amount of capital resources. Correct! more capital resources. Correct. Capital is expensive and the US has more resources. Question 13

1 / 1 pts Select the true statement in the following statements about the activity of production. Correct! The process of production is the means by which a firm uses inputs to produce outputs. Correct. Taking inputs of production to turn them in to outputs (products) is production. With production activities, the inputs are as valuable as the outputs. production does not apply to agricultural products. Production activity only includes the manufacturing of things, not services. Question 14 1 / 1 pts Total product of labor refers to Correct! the quantity of output produced from a given amount of labor, holding other inputs constant. Correct. How many units can be produced given a certain number of workers. the cost of producing a given quantity of output. the quantity of additional output produced when the firm adds additional workers to the production process. the quantity of output produced from a given amount of capital, holding other inputs constant.

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Question 15 1 / 1 pts Suppose that a firm produces 10 units of output. Its average variable cost (AVC) = $25, average fixed cost (AFC) = $5, and marginal cost (MC) = $30. The firm's total cost is ________. Correct! $300 Correct. Total cost = ($25 + 5 ) x 10 units $330 $250 $30 Question 16 1 / 1 pts If there are rapid diseconomies of scale in a market, that market is likely to include Correct! many small firms. Correct. This is consistent with rapid diseconomies of scale. many firms of various sizes. One very large firm.

a few large firms. Question 17 0 / 1 pts f a producer increases the amount of labor used in production, holding other inputs constant, then total product will decrease at a decreasing rate. total product will continue to increase at a constant rate. You Answered total product will always increase at an increasing rate. Incorrect. Total product does not always increase at an increasing rate. Correct Answer total product will eventually increase at a decreasing rate. Question 18 1 / 1 pts Brushes and Co. produces toothbrushes and is considering adding a new production line with newer technology. This process is consistent with ________ decisions because ________. short-run production, raw materials are being changed. long-run production, raw materials are being changed. Correct!

long-run production, capital is being changed Correct. Major capital and production changes are usually long run decisions. short-run production, capital is being changed. Question 19 1 / 1 pts According to the following cost information, marginal cost and average total cost are equal when the firm produces ________. Quantity produced/day Total Cost 0 $100 1 $150 2 $195 3 $225 4 $275 5 $375 6 $450 3 units. Correct! 6 units Correct. ATC = $450/6 = $75 = MC = $450-375 5 units. 1 unit.

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Question 20 1 / 1 pts Dixie, a cattle ranch owner, earns $350,000/month in revenue. Her monthly costs include: Administrative cost: $35,000. Feed: $40,000. Equipment and maintenance. $55,000. Labor: $90,000. Transportation: $20,000. Miscellaneous: $35,000. Foregone rent for the land used for cattle grazing: $18,000. The value of her daughter’s time that helps on weekends: $4,000. Owner’s salary: $15,000. Dixie’s accounting and economic profit respectively are $45,000 and $38,000. $38,000 and $38,000. $60,000 and $48,000. Correct! $60,000 and $38,000. Correct. Accounting profit = Revenue - Explicit cost. Economic Profit = Revenue (sales) - Cost (explicit + implicit costs) Quiz Score: 18 out of 20 Previous Last Attempt Details: Time: 49 minutes Current Score: 18 out of 20 Kept Score: 18 out of 20 2 Attempts so far View Previous Attempts 1 More Attempt available

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