Econ 528 Final Exam – Questions With Correct
Solutions
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Terms in this set (151)
If, when a firm double all its inputs, its Economies of scale
average cost of production
decreases, then production displays
A - diminishing returns
B - economies of scale
C - diseconomies of scale
D - declinging fixed costs
,The long-run average cost curve The lowest average cost of producing every level of
shows output in the long run
A - the lowest average cost of
producing every level of output in the
long run
B - where the most profitable level of
output occurs
C - the average cost of producing
where diminishing returns are not
present
D - the plant size of scale that the
firm should build
All of the following statements are An increase in the output level will increase profit
true of the minimum efficient scale
except one. Which one?
A - all possible economies of scale
have been exhausted
B - the short-run average total cost
curve's minimum point is equal to the
long run average cost curve's
minimum point
C - an increase in the scale of
operation will encounter
diseconomies of scale.
D - an increase in the output level will
increase profit
At the minimum efficient scale The firm has achieved the lowest possible average
cost of production
A - all possible economies of scale
have not been exhausted
B - the firm has achieved the lowest
possible average cost of production
C - any increases in the scale of
operation will encounter further
economies of scale
D - marginal cost is at its minimum
,The President of Toyota's It is upward-sloping
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." Based on this quote,
what must be true of the plant's
average cost of production curve?
A - it is upward-sloping
B - it is downward-sloping
C - it is a ray from the origin
D - it is U-shaped
Economies of scope refers to the Produces more than one product
decrease in average total cost that
can occur when a firm
A - produces more than one product
B - has monopoly power in world
markets
C - controls the raw materials used as
inputs
D - narrows the scope of its regional
markets
, Producing 200 units of good Y and Economies of Scope
100 units of good X in the same
factory costs the firm $50,000. In
contrast, producing 200 units of
good Y in one factory and 100 units of
good X in another factory costs the
firm $75,000. So if the firm produces
the two goods together, it achieves
A - quadratic returns of scale
B - diseconomies of scope
C - economies of scope
D - diseconomies of scale and
diseconomies of scope
The marginal revenue product of All of the above are correct
labor for a firm
A - will increase if the price of the
firm's output increases.
B - is the firm's demand curve for
labor
C - will decrease if the firm hires
more labor
D - all of the above are correct
Answer whether the following A - False
statements are true or false: B - False
A - Over time, more experienced
workers will demand higher wage
and therefore, will lead to an increase
in the cost of production for the
producers
B - When you produce more, average
cost of production increases
Solutions
Add to calendar
Play your way to mastery with fun games
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Terms in this set (151)
If, when a firm double all its inputs, its Economies of scale
average cost of production
decreases, then production displays
A - diminishing returns
B - economies of scale
C - diseconomies of scale
D - declinging fixed costs
,The long-run average cost curve The lowest average cost of producing every level of
shows output in the long run
A - the lowest average cost of
producing every level of output in the
long run
B - where the most profitable level of
output occurs
C - the average cost of producing
where diminishing returns are not
present
D - the plant size of scale that the
firm should build
All of the following statements are An increase in the output level will increase profit
true of the minimum efficient scale
except one. Which one?
A - all possible economies of scale
have been exhausted
B - the short-run average total cost
curve's minimum point is equal to the
long run average cost curve's
minimum point
C - an increase in the scale of
operation will encounter
diseconomies of scale.
D - an increase in the output level will
increase profit
At the minimum efficient scale The firm has achieved the lowest possible average
cost of production
A - all possible economies of scale
have not been exhausted
B - the firm has achieved the lowest
possible average cost of production
C - any increases in the scale of
operation will encounter further
economies of scale
D - marginal cost is at its minimum
,The President of Toyota's It is upward-sloping
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." Based on this quote,
what must be true of the plant's
average cost of production curve?
A - it is upward-sloping
B - it is downward-sloping
C - it is a ray from the origin
D - it is U-shaped
Economies of scope refers to the Produces more than one product
decrease in average total cost that
can occur when a firm
A - produces more than one product
B - has monopoly power in world
markets
C - controls the raw materials used as
inputs
D - narrows the scope of its regional
markets
, Producing 200 units of good Y and Economies of Scope
100 units of good X in the same
factory costs the firm $50,000. In
contrast, producing 200 units of
good Y in one factory and 100 units of
good X in another factory costs the
firm $75,000. So if the firm produces
the two goods together, it achieves
A - quadratic returns of scale
B - diseconomies of scope
C - economies of scope
D - diseconomies of scale and
diseconomies of scope
The marginal revenue product of All of the above are correct
labor for a firm
A - will increase if the price of the
firm's output increases.
B - is the firm's demand curve for
labor
C - will decrease if the firm hires
more labor
D - all of the above are correct
Answer whether the following A - False
statements are true or false: B - False
A - Over time, more experienced
workers will demand higher wage
and therefore, will lead to an increase
in the cost of production for the
producers
B - When you produce more, average
cost of production increases
