ECON 528 Final Exam Study Guide. complete questions and answers

ECON 528 Final Exam Study Guide. complete questions and answers ECON 528 Dr. Rahmad Final Exam Chapter 4: Cost and Production 1. Economies of scale exist as a firm increases its size in the long run because of all the following except:  As a firm expands its production, its profit margin per-unit of output increases. 2. Over the past twenty years, the number of small family farms has fallen significantly and in their place there are fewer, but larger, farms owned by corporations. Which of the following best explains this trend?  Economies of scale in farming. 3. The president of Toyota’s Georgetown plant was quoted as saying, “Demand for high volumes saps your energy. Over a period of time, it eroded our focus [and] thinned out the expertise and knowledge we painstakingly built up over the years.” This quote suggests that:  As Toyota expanded its capacity, it experienced diseconomies of scale. 4. The marginal revenue product of labor for a firm:  Will decrease if the firm hires more labor.  Will increase if the price of the firm’s output increases.  Is the firm’s demand curve for labor.  ALL OF THE ABOVE ARE CORRECT. 5. Evaluate the Statement; Cost approach is the easier approach to achieve optimal production when the firm is at the start of their production plan.  False.