ECP3704 UPDATED ALL EXAMS SCRIPT
QUESTIONS AND ANSWERS SURE A+
✔✔For the cost function C(Q) = 200 + 3Q + 8Q^2 + 4Q^3, what is the average fixed
cost of producing six units of output?
18.31
212.61
42.12
33.33 - ✔✔33.33
✔✔The marginal product of an input is defined as the change in
-Average output attributable to the last unit of an input
-Total output attributable to the last unit of an input
-Total input attributable to the last unit of an output
-Average output attributable to the last unit of an output. - ✔✔Total output attributable to
the last unit of an input
✔✔For the cost function C(Q) = 1000 + 14Q + 9Q^2 + 3Q^3, what is the marginal cost
of producing the fourth unit of output?
- $42
-$295
-$230
-$116
-$188 - ✔✔$188
✔✔The isoquants are normally drawn with a convex shape because:
-Inputs are perfectly substitutable
-Inputs are perfectly complementary
-Inputs are not perfectly substitutable
-Inputs are not perfectly complem - ✔✔Inputs are not perfectly substitutable
✔✔It is profitable to hire units of labor as long as the value of marginal product
, -Is less than the wage
-Exceeds average product
-Equals price
-Exceeds wage - ✔✔Exceeds wage
✔✔If ATC is $100, MC is $80, and AVC is $90, then
-ATC is rising and AVC is rising
-ATC is falling and AVC is falling
-ATC is rising and AVC is falling
-ATC is falling and AVC is rising - ✔✔ATC is falling and AVC is falling
✔✔The recipe that defines the maximum amount of output that can be produced with K
units of capital and L units of labor is the:
-Production function
-Technological constraint
-Research and development schedule
-Total product - ✔✔Production function
✔✔Diminishing marginal returns occur when
-One input is increased and the others are held constant
-All inputs are increased
-One input is decreased while the other is increased
-All inputs are decreased - ✔✔One input is increased and the others are held constant
✔✔If the price of a variable input increases, then
-the total cost curve will shift up
-The average total cost curve will shift down
-The marginal cost curve will shift down
-The fixed cost curve will shift up - ✔✔the total cost curve will shift up
✔✔As output expands from 199 to 200 units, total cost rise from $985 to $3000. At this
stage, the marginal cost and average cost of production are
-$1 and $200
-$15 and $15
-$29.85 and $15
-$1 and $1 - ✔✔$15 and $15
✔✔A firm that produces widgets must pay a fixed cost of $150. It costs an additional
$30 for every widget that they produce. If the market price is $40, how many widgets
does the firm have to sell so that it does not incur a loss?
-1
-5
-10
QUESTIONS AND ANSWERS SURE A+
✔✔For the cost function C(Q) = 200 + 3Q + 8Q^2 + 4Q^3, what is the average fixed
cost of producing six units of output?
18.31
212.61
42.12
33.33 - ✔✔33.33
✔✔The marginal product of an input is defined as the change in
-Average output attributable to the last unit of an input
-Total output attributable to the last unit of an input
-Total input attributable to the last unit of an output
-Average output attributable to the last unit of an output. - ✔✔Total output attributable to
the last unit of an input
✔✔For the cost function C(Q) = 1000 + 14Q + 9Q^2 + 3Q^3, what is the marginal cost
of producing the fourth unit of output?
- $42
-$295
-$230
-$116
-$188 - ✔✔$188
✔✔The isoquants are normally drawn with a convex shape because:
-Inputs are perfectly substitutable
-Inputs are perfectly complementary
-Inputs are not perfectly substitutable
-Inputs are not perfectly complem - ✔✔Inputs are not perfectly substitutable
✔✔It is profitable to hire units of labor as long as the value of marginal product
, -Is less than the wage
-Exceeds average product
-Equals price
-Exceeds wage - ✔✔Exceeds wage
✔✔If ATC is $100, MC is $80, and AVC is $90, then
-ATC is rising and AVC is rising
-ATC is falling and AVC is falling
-ATC is rising and AVC is falling
-ATC is falling and AVC is rising - ✔✔ATC is falling and AVC is falling
✔✔The recipe that defines the maximum amount of output that can be produced with K
units of capital and L units of labor is the:
-Production function
-Technological constraint
-Research and development schedule
-Total product - ✔✔Production function
✔✔Diminishing marginal returns occur when
-One input is increased and the others are held constant
-All inputs are increased
-One input is decreased while the other is increased
-All inputs are decreased - ✔✔One input is increased and the others are held constant
✔✔If the price of a variable input increases, then
-the total cost curve will shift up
-The average total cost curve will shift down
-The marginal cost curve will shift down
-The fixed cost curve will shift up - ✔✔the total cost curve will shift up
✔✔As output expands from 199 to 200 units, total cost rise from $985 to $3000. At this
stage, the marginal cost and average cost of production are
-$1 and $200
-$15 and $15
-$29.85 and $15
-$1 and $1 - ✔✔$15 and $15
✔✔A firm that produces widgets must pay a fixed cost of $150. It costs an additional
$30 for every widget that they produce. If the market price is $40, how many widgets
does the firm have to sell so that it does not incur a loss?
-1
-5
-10
