2) Using the data in the above table, the average total cost of producing 16 units per day is A) $ B) $5.00. C) $5.55. D) $2.22.

Transcription

1 Eco201, Fall 2007, Quiz 6 Prof. Bill Even Name Assigned Seat MULTIPLE CHOICE. Put all answers in the space provided at the end of the quiz. Labor (workers) Output (units per day) Cost schedule Total fixed cost Total variable cost ) Using the data in the above table, the average fixed cost of producing 9 units per day is A) $ B) $5.00. C) $5.55. D) $ ) Using the data in the above table, the average total cost of producing 16 units per day is A) $7.50. B) $6.25. C) $1.25. D) $7.00 3) In the above table, the total cost of producing 9 units of output is A) $50. B) $30. C) $70. D) $20. 4) In the above figure, the long-run average cost curve exhibits economies of scale A) between 5 and 10 units per hour. B) along the entire curve. C) between 20 and 25 units per hour. D) between 10 and 20 units per hour. 1

2 5) In the above figure, the marginal cost curve is curve A) A. B) B. C) C. D) D. 6) In the above figure, the average variable cost curve is curve A) A. B) B. C) C. D) D. 7) In the figure above, the marginal product of the second worker is A) 5 units. B) 10 units. C) 1 units. D) 2 units. 8) At point d in the above figure, the average product of labor equals A) B) 4. C) 15. D) approximately 1. 2

3 Labor (workers) Output (units) Total fixed cost, TFC Total variable cost, TVC Total cost, TC ) Using the data in the above table, when the firm increases its output from 4 to 9 units, the marginal cost of a unit is A) $6.00 a unit. B) $5.00 a unit. C) $7.00 a unit. D) $4.00 a unit. 10) Using the data in the above table, the average fixed cost of producing 16 units is A) $1.54 a unit. B) $1.11 a unit. C) $2.22 a unit. D) $1.25 a unit. 11) ʺDiminishing marginal returnsʺ refer to a situation in which the A) marginal cost of the last worker hired is less than the marginal cost of the previous worker hired. B) marginal product of the last worker hired is less than the marginal product of the previous worker hired. C) average cost of the last worker hired is less than the average cost of the previous worker hired. D) average product of the last worker hired is less than the average product of the previous worker hired. Total Product, Marginal Product, Average Product Labor (workers per day) Total product (units per day) Marginal product Average product ) In the above table, the average product of three workers is A) 3. B) 4. C) 1. D) 2. 13) In the above table, the marginal product of the third worker is A) 4. B) 2. C) 3. D) 1. 14) A firm experiences when its downward at larger outputs. A) diminishing marginal returns; long-run average cost curve slopes B) diseconomies of scale; average total cost curve slopes C) economies of scale; long-run average cost curve slopes D) diminishing marginal returns; average total cost curve shifts 3

4 15) The average product of labor exceeds the marginal product of labor A) when the average product of labor is falling. B) when the average product of labor is rising. C) when the average product of labor is at its maximum. D) when the marginal product of labor is at its maximum. Output (units) Total cost Average variable cost Marginal cost ) The above (incomplete) table provides information about the relationships between output and various cost measures. The total cost (TC) of producing 9 units of output is A) $20. B) $190. C) $180. D) None of the above answers is correct. 17) The above (incomplete) table provides information about the relationships between output and various cost measures. The marginal cost per unit when increasing output from 14 to 17 units is A) $30. B) $20. C) $380. D) None of the above answers is correct. 18) The long run is distinguished from the short run because only in the long run A) output prices can vary. B) the firm no longer maximizes its profit. C) the quantities of all resources can be varied. D) resource prices can vary. 19) A cost that has already been made and cannot be recovered is called a A) fixed cost. B) sunk cost. C) marginal cost. D) variable cost. 20) Sticky Cakes is a bakery. A decrease in the wage rate that Sticky Cakes pays its workers A) shifts both its MC curve and its ATC curve downward. B) does not shift its MC curve but shifts its ATC curve downward. C) shifts its MC curve downward but not its ATC curve. D) does not shift its MC curve or its ATC curve. 4

5 21) The average total cost curves for plants A, B, C and D are shown in the above figure. Which plant is best to use to produce 60 units per day? A) plant A B) plant B C) plant C D) plant D 22) In the short run, A) all inputs are variable. B) some firms experience increasing returns to scale. C) all inputs are fixed. D) the size of the plant is fixed. Record all your answers in the space below. 23)

6 Answer Key Testname: Q6F2F07 1) D 2) A 3) C 4) A 5) A 6) C 7) A 8) A 9) B 10) D 11) B 12) B 13) A 14) C 15) A 16) B 17) A 18) C 19) B 20) A 21) B 22) D 23) 6