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- 1. Multiple ChoiceShort run marginal costs eventually increase because of the effects of:increasing marginal productdiminishing marginal productincreasing fixed costsdiseconomies of scale
- 2. Multiple ChoiceWhat is the only curve that continues to fall as output increases?Average Fixed CostAverage Variable CostAverage Total CostMarginal Cost
- 3. Multiple Choice
What causes marginal product to increase at an increasing rate in Stage 1?increasing costsworker specializationunderutilizationfixed resources - 4. Multiple ChoiceThe following graph illustratesThe Law of Increasing CostsThe Law of DemandCircular Flow Diagram of Mixed EconomyThe Marginal Product of Labor
- 5. Multiple ChoiceAccording to the graph, increasing marginal returns occur from0 to Labor1Labor1 to Labor20 to Labor L2After L2
- 6. Multiple ChoiceThe term for costs that cannot be avoided in the short runTotal CostFixed CostAverage CostVariable Cost
- 7. Multiple ChoiceTerm for costs that change with productionFixed CostAverage CostVariable CostMarginal Cost
- 8. Multiple ChoiceExtra cost of producing one more unitMarginal costVariable CostFixed CostAverage Cost
- 9. Multiple ChoiceATC x ___=TCVariable CostQuantityPriceNone of the Above
- 10. Multiple ChoiceWhat is the only curve that continues to fall as output increases?Average Fixed CostAverage Variable CostAverage Total CostMarginal Cost
- 11. Multiple ChoiceThese costs are calculate by diving the cost by the outputFixed CostAverage CostTotal CostVariable Cost
- 12. Multiple ChoiceWhen marginal revenue equals marginal cost, a perfectly competitive firm isdetermining the price it will set.maximizing its revenuesestablishing its shutdown pointmaximizing its profit.
- 13. Multiple ChoiceTotal Costs / Quantity = _____Marginal CostAverage Total CostImplicit CostExplicit Cost
- 14. Multiple ChoiceVariable Cost/Quantity = _______Marginal Variable CostAverage Fixed CostAverage Variable CostMarginal Total Cost
- 15. Multiple ChoiceChange in Total Revenue/Change in Quantity
ΔTR/ΔQ = _____Marginal costMarginal RevenueProfitMarginal Profit - 16. Multiple ChoiceCosts that do not change when the quantity of output produced changes?Fixed CostsVariable CostsExplicit CostsImplicit Costs
- 17. Multiple ChoiceTime period in which one of the costs is fixed?Long RunShort Run
- 18. Multiple ChoiceThe relationship between the quantity of inputs used to make a good and the quantity of output produced.Diminishing Marginal UtilityProduction FunctionConjunction JunctionEconomies of Scale
- 19. Multiple ChoiceOccurs when each addition of an input results in declining quantity of the outputDiminishing Marginal UtilityDiminishing Marginal CostsDiminishing Marginal ReturnsDiminishing Marginal Profits
- 20. Multiple ChoiceWhich line represents the average fixed costs of production?RedGreenBlueBlack
- 21. Multiple ChoiceWhich line is the average variable costs?BlueRedGreenBlack
- 22. Multiple ChoiceWhich line is the average total cost of production?RedGreenBlueBlack
- 23. Multiple ChoiceWhich line shows the fixed cost?ABC
- 24. Multiple ChoiceWhich line shows the variable costs?ABC
- 25. Multiple Choice
A unique short-run problem in the production of a particular good is the Law of Diminishing Marginal Returns. Which of the following statements best explains this phenomenon?
As Jack eats continuous slices of pizza, he gains less and less enjoyment from each slice.
Because large-scale production allows the realization of economies of scale, the real costs of production vary directly with the level of output.
As more workers are added to work on a project that has a fixed amount of fixed resources for them to work on, beyond some point the resulting extra output will begin to decline.
Population growth automatically adjusts to the level at which the average per worker will be at a maximum.
- 26. Multiple Choice
Curves 1, 2, 3 and 4 represent...
average total cost, average variable cost, marginal cost and average fixed cost respectively (in that order)
marginal cost, average variable cost, average fixed cost, and average total cost respectively (in that order)
marginal cost, average total cost, average variable cost and average fixed cost respectively (in that order)
- 27. Multiple Choice
The distance between curves 2 and 3 represents
Average total cost
Average variable cost
Average fixed cost
Marginal Cost
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