Econ 1580 Graded Quiz 1 UPDATED
ACTUAL Questions and CORRECT
Answers
At 36 units of labor, a firm finds that both average product of labor and marginal product of
labor equal 42. We can conclude that the average product curve at 36 units of labor is: -
CORRECT ANSWER - horizontal
Diminishing marginal returns for the first four units of a variable input is exhibited by the
marginal product sequence: - CORRECT ANSWER - 50, 40, 30, 20
Fixed costs include: - CORRECT ANSWER - op management salaries
If the slope of the total product curve is decreasing, the slope of the total variable cost curve is: -
CORRECT ANSWER - increasing
The marginal cost curve intersects the total variable cost curve at: - CORRECT
ANSWER - no point; the curves don't intersect
Average total cost is the ratio of: - CORRECT ANSWER - total cost to the quantity of
output
If marginal cost is equal to average total cost, then: - CORRECT ANSWER - average total
cost is at its minimum
(Graph) In this exhibit (A Firm's Cost Curves) the curve labeled W represents the firm's _______
curve. - CORRECT ANSWER - average total cost
When an increase in the firm's output reduces its long-run average cost, it experiences: -
CORRECT ANSWER - economies of scale
, The slope of a long-run average cost curve exhibiting diseconomies of scale is: - CORRECT
ANSWER - positive
Which of the following statements is false?
Select one:
a. The income effect of normal goods counters the substitution effect so the demand curve is
upsloping.
b. The income effect and the substitution effect reinforce each other when there are price changes
for a normal good.
c. The income effect represents the decrease in quantity demanded caused by the implicit change
in income due to a fall in the price of an inferior good but not for a normal good.
d. The substitution effect represents the change in quantity demanded solely due to a change in
the relative price of a good. - CORRECT ANSWER - The income effect of normal goods
counters the substitution effect so the demand curve is upsloping
For a/an _______ good, an increase in income will lead to an increase in _______ . - CORRECT
ANSWER - normal; consumption
Assume that the total utilities for the fifth and sixth units of a good consumed are 83 and 97,
respectively. The marginal utility for the sixth unit is: - CORRECT ANSWER - 14
(TAble) In this exhibit (Consumer Equilibrium 1), assume that the price of good X is $2 per unit
and the price of good Y is $1 per unit, and you consume 3 units of good X and 3 units of good Y.
To maximize utility, assuming that the goods are divisible, you would consume: - CORRECT
ANSWER - less of X and more of Y
If the price of apples falls and the price of oranges remains constant:
Select one:
a. apples are now relatively cheaper.
b. the fall in the price of apples made consumers richer.
ACTUAL Questions and CORRECT
Answers
At 36 units of labor, a firm finds that both average product of labor and marginal product of
labor equal 42. We can conclude that the average product curve at 36 units of labor is: -
CORRECT ANSWER - horizontal
Diminishing marginal returns for the first four units of a variable input is exhibited by the
marginal product sequence: - CORRECT ANSWER - 50, 40, 30, 20
Fixed costs include: - CORRECT ANSWER - op management salaries
If the slope of the total product curve is decreasing, the slope of the total variable cost curve is: -
CORRECT ANSWER - increasing
The marginal cost curve intersects the total variable cost curve at: - CORRECT
ANSWER - no point; the curves don't intersect
Average total cost is the ratio of: - CORRECT ANSWER - total cost to the quantity of
output
If marginal cost is equal to average total cost, then: - CORRECT ANSWER - average total
cost is at its minimum
(Graph) In this exhibit (A Firm's Cost Curves) the curve labeled W represents the firm's _______
curve. - CORRECT ANSWER - average total cost
When an increase in the firm's output reduces its long-run average cost, it experiences: -
CORRECT ANSWER - economies of scale
, The slope of a long-run average cost curve exhibiting diseconomies of scale is: - CORRECT
ANSWER - positive
Which of the following statements is false?
Select one:
a. The income effect of normal goods counters the substitution effect so the demand curve is
upsloping.
b. The income effect and the substitution effect reinforce each other when there are price changes
for a normal good.
c. The income effect represents the decrease in quantity demanded caused by the implicit change
in income due to a fall in the price of an inferior good but not for a normal good.
d. The substitution effect represents the change in quantity demanded solely due to a change in
the relative price of a good. - CORRECT ANSWER - The income effect of normal goods
counters the substitution effect so the demand curve is upsloping
For a/an _______ good, an increase in income will lead to an increase in _______ . - CORRECT
ANSWER - normal; consumption
Assume that the total utilities for the fifth and sixth units of a good consumed are 83 and 97,
respectively. The marginal utility for the sixth unit is: - CORRECT ANSWER - 14
(TAble) In this exhibit (Consumer Equilibrium 1), assume that the price of good X is $2 per unit
and the price of good Y is $1 per unit, and you consume 3 units of good X and 3 units of good Y.
To maximize utility, assuming that the goods are divisible, you would consume: - CORRECT
ANSWER - less of X and more of Y
If the price of apples falls and the price of oranges remains constant:
Select one:
a. apples are now relatively cheaper.
b. the fall in the price of apples made consumers richer.
