ECON 2102 Exam Questions and Correct Verified
Answers
A production function shows - ✔✔How a firm's production changes as quantity of labor and
other inputs changes.
A production function shows the - ✔✔Maximum output that can be produced with varying
combinations of factor inputs.
The period in which at least one input is fixed in quantity is the - ✔✔Short run.
The short-run production function shows how output changes when - ✔✔The quantity of
labor changes.
The marginal physical product is the - ✔✔Change in total output associated with one
additional unit of the variable input.
If a firm could hire all the workers it wanted at a zero wage (i.e., the workers are volunteers), the
firm should hire - ✔✔Enough workers to produce where the MPP equals zero.
The change in total output associated with one additional unit of input is the - ✔✔Marginal
physical product.
Diminishing returns occur because - ✔✔A firm increases the amount of a variable input
without changing a fixed input.
In the short run, the law of diminishing returns - ✔✔Can be observed in every production
process.
, Which of the following is the best explanation of why the law of diminishing returns does not
apply in the long run? - ✔✔In the long run, firms can increase the availability of space and
equipment to keep up with the increase in variable inputs.
If an additional unit of labor costs $20 and has a MPP of 15 units of output, the marginal cost is -
✔✔$1.33.
If the marginal physical product (MPP) is falling, then the - ✔✔Marginal cost of each unit of
output is rising.
Marginal cost - ✔✔Rises as a direct result of diminishing returns.
Which of the following costs do not change when output changes in the short run?
In the short run, when a firm produces zero output, total cost equals - ✔✔Fixed costs.
Marginal cost is equal to - ✔✔The change in total costs divided by the change in quantity
produced.
At any given rate of output, the difference between total cost and fixed cost is
Changes in short-run total costs result from changes in - ✔✔Variable cost.
The marginal cost curve intersects the minimum of the curve representing - ✔✔ATC.
Average total cost is important to a business because - ✔✔It tells the firm what the profit per
unit produced is.
If the marginal cost curve is rising, which of the following must be true? - ✔✔Total costs
must be rising.
Answers
A production function shows - ✔✔How a firm's production changes as quantity of labor and
other inputs changes.
A production function shows the - ✔✔Maximum output that can be produced with varying
combinations of factor inputs.
The period in which at least one input is fixed in quantity is the - ✔✔Short run.
The short-run production function shows how output changes when - ✔✔The quantity of
labor changes.
The marginal physical product is the - ✔✔Change in total output associated with one
additional unit of the variable input.
If a firm could hire all the workers it wanted at a zero wage (i.e., the workers are volunteers), the
firm should hire - ✔✔Enough workers to produce where the MPP equals zero.
The change in total output associated with one additional unit of input is the - ✔✔Marginal
physical product.
Diminishing returns occur because - ✔✔A firm increases the amount of a variable input
without changing a fixed input.
In the short run, the law of diminishing returns - ✔✔Can be observed in every production
process.
, Which of the following is the best explanation of why the law of diminishing returns does not
apply in the long run? - ✔✔In the long run, firms can increase the availability of space and
equipment to keep up with the increase in variable inputs.
If an additional unit of labor costs $20 and has a MPP of 15 units of output, the marginal cost is -
✔✔$1.33.
If the marginal physical product (MPP) is falling, then the - ✔✔Marginal cost of each unit of
output is rising.
Marginal cost - ✔✔Rises as a direct result of diminishing returns.
Which of the following costs do not change when output changes in the short run?
In the short run, when a firm produces zero output, total cost equals - ✔✔Fixed costs.
Marginal cost is equal to - ✔✔The change in total costs divided by the change in quantity
produced.
At any given rate of output, the difference between total cost and fixed cost is
Changes in short-run total costs result from changes in - ✔✔Variable cost.
The marginal cost curve intersects the minimum of the curve representing - ✔✔ATC.
Average total cost is important to a business because - ✔✔It tells the firm what the profit per
unit produced is.
If the marginal cost curve is rising, which of the following must be true? - ✔✔Total costs
must be rising.
