ULL ECON 528 FINAL EXAM – Questions With
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Terms in this set (162)
If, when a firm doubles all its inputs, B) economies of scale.
its average cost of production
decreases, then production displays
A) diminishing returns.
B) economies of scale.
C) diseconomies of scale.
D) declining fixed costs.
,The long-run average cost curve A) the lowest average cost of producing every level
shows of 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 or scale that the firm
should build.
All of the following statements are D) An increase in the output level will increase
true of the minimum efficient scale profit.
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) Any 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 B) the firm has achieved the lowest possible average
A) all possible economies of scale cost of production.
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 A) 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 A) 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 C) 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 to scale.
B) diseconomies of scope.
C) economies of scope.
D) diseconomies of scale and
diseconomies of scope.
, The marginal revenue product of D) 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 & B) False
statements are true or false:
A) Over time, more experienced
workers will demand higher wages
and therefore, will lead to an
increased in the cost of production
for the producers.
B) When you produce more, the
average cost of production increases.
A reason why a perfectly competitive B) in the short run, as more labor is hired, labor's
firm's demand for labor curve slopes marginal product falls because of the law of
downward is that diminishing returns.
A) each additional unit of labor hired
is less efficient than previously hired
units.
B) in the short run, as more labor is
hired, labor's marginal product falls
because of the law of diminishing
returns.
C) the extra cost of hiring additional
units of labor increases as a firm hires
more units of labor.
D) the firm's demand curve for the
product that uses labor is downward
sloping.
Complete Solutions
Add to calendar
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Terms in this set (162)
If, when a firm doubles all its inputs, B) economies of scale.
its average cost of production
decreases, then production displays
A) diminishing returns.
B) economies of scale.
C) diseconomies of scale.
D) declining fixed costs.
,The long-run average cost curve A) the lowest average cost of producing every level
shows of 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 or scale that the firm
should build.
All of the following statements are D) An increase in the output level will increase
true of the minimum efficient scale profit.
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) Any 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 B) the firm has achieved the lowest possible average
A) all possible economies of scale cost of production.
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 A) 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 A) 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 C) 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 to scale.
B) diseconomies of scope.
C) economies of scope.
D) diseconomies of scale and
diseconomies of scope.
, The marginal revenue product of D) 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 & B) False
statements are true or false:
A) Over time, more experienced
workers will demand higher wages
and therefore, will lead to an
increased in the cost of production
for the producers.
B) When you produce more, the
average cost of production increases.
A reason why a perfectly competitive B) in the short run, as more labor is hired, labor's
firm's demand for labor curve slopes marginal product falls because of the law of
downward is that diminishing returns.
A) each additional unit of labor hired
is less efficient than previously hired
units.
B) in the short run, as more labor is
hired, labor's marginal product falls
because of the law of diminishing
returns.
C) the extra cost of hiring additional
units of labor increases as a firm hires
more units of labor.
D) the firm's demand curve for the
product that uses labor is downward
sloping.
