the total cost of producing six (6) units of output is $228 and the total cost of producing seven (7) units of output is $245, what is the average cost when producing seven (7) units? a. $35 b. $245
1. If the total cost of producing six (6) units of output is $228 and the total cost of producing seven (7) units of output is $245, what is the average cost when producing seven (7) units?
a. $35
b. $245
c. $3
d. $38
e. $17
2. Total costs in the short–run are
a. The costs of all variable resources.
b. The costs of all variable resources used to produce goods and services.
c. The costs of variable and fixed resources.
d. Defined to be equal to the value of
e. Defined to be equal to dollars multiplied by the marginal physical product.
3. After hiring a new employee, a manager sees that total output increases. If the manager hires another employee and discovers total output has risen but by much less than occurred when the previous employee was hired, the result is due to
a. Diseconomies of scale.
b. A poor hiring procedure.
c. Diminishing marginal returns.
d. The lack of skills of the two employees.
e. Marginal physical product.
4. In the long-run,
a. New technology cannot be introduced.
b. At least one of the firm’s resources is fixed
c. Most of the firm’s resources cannot be varied
d. All of the firm’s resources are variable.
e. None of the firm’s resources are variable.
5. Which of the following would not be a useful characteristic for determining the market structure in which a firm produces and sells its products?
a. Discovering who owns the firm in the market
b. Learning the number of firms in the market
c. Determining whether the products in the market are differentiated.
d. Determining the ease with which new firms may enter the market and begin producing the good or service.
e. Determining whether the products in the market are standardized.
6. The term price maker implies that a firm faces a downward – sloping demand curve.
a. True
b. False
7. An executive at a manufacturing plant that produces personal computers is attempting to decide whether or not to produce one or more of a certain type of computer. Which of the following is the executive most likely to consider when making this decision?
a. The amount of rent that is paid for the manufacturing facility
b. The amount of outstanding debt used for capital improvements last year
c. The corporate tax rate in effect for the next fiscal year.
d. The change in cost resulting from the production of one or more unit of this type of computer
8. Assume that one laborer can produce 8 units of output, 2 laborers 19 units, three laborers 24 units, and four laborers 28 units. If the cost is $20 per unit of labor and total costs for producing 8 units are $360, what are total fixed costs?
a. $20
b. $160
c. $340
d. $45
e. Total fixed costs cannot be determined from the information given.
9. The demand curve for all firms is downward sloping.
a. True
b. False
10. Which of the following sayings illustrates diminishing returns in the short - run?
a. “Too many cooks spoil the broth”.
b. “Jack be nimble, Jack be quick”.
c. When the cat’s away, the mice will play”.
d. “A rolling stone gathers no moss”.
e. “Hasta La Vista, Baby”.
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