Question 1

Use a long-run average cost curve graph to illustrate how diseconomies of scale would not make it beneficial for two companies to go through with a merger.

Accepted Answer

Assume the two companies are o...

Question 2

The total output produced by a firm divided by the quantity of workers employed by the firm is the definition of

Accepted Answer

A)   the marginal product of labor.
B)   the division of labor.
C)   the average product of labor.
D)   the average cost of production.E) A) and B)
F) All of the above

Question 3

Figure 8-8
 
-Refer to Figure 8-8 above to answer the following questions.
a.Identify the curves in the diagram.
A ________ B ________ C ________
b.What is the numerical value of fixed cost when the quantity of output=10?
c.What is the numerical value of variable cost when the quantity of output=10?
d.What is the numerical value of total cost when the quantity of output =10?
e.What is the numerical value of average fixed cost when the quantity of output =10?
f.What is the numerical value of average total cost when the quantity of output =10?
g.On the graph identify the area that represents the total variable cost of production when the quantity of output =10.
h.On the graph identify the area that represents the fixed cost of production when the quantity of output =10.

Accepted Answer

a∙A=Marginal cost curve; B = A...

Question 4

Figure 8-1
 
-Refer to Figure 8-1.The marginal product of the 3rd worker is

Accepted Answer

A)   57.
B)   19.
C)   15.
D)   11.E) All of the above
F) A) and C)

Question 5

Stan owns a software design business.He obtained a bank loan to buy computer equipment for his business.He pays $1,000 per month for interest on the loan.He has 10 employees,each of whom is paid $4,000 per month.Because his business has been successful,next month he will increase employee wages to $5,000.If the revenue from his business remains at its current level,Stan is considering an addition to his office.Which of the following statements regarding Stan's business is false?

Accepted Answer

A)   The payments Stan makes to his employees are variable costs and explicit costs.
B)   The monthly payment Stan makes for his bank loan is an implicit cost.
C)   The monthly payment Stan makes for his bank loan is a fixed cost.
D)   The addition Stan is considering to make to his office would be an implicit cost.E) A) and B)
F) B) and D)

Question 6

Which of the following is typically considered a fixed cost by academic book publishers but a variable cost by companies that print books?

Accepted Answer

A)   postage and supplies
B)   travel
C)   rent
D)   wages and salariesE) C) and D)
F) B) and D)

Question 7

If production displays constant returns to scale,then all economies of scale have been exhausted.

Accepted Answer

A) True 
 B)False

Question 8

In economics,technology only refers to the development of new products.

Accepted Answer

A) True 
 B)False

Question 9

Figure 8-5
 
-Refer to Figure 8-5.Curve G approaches curve F because

Accepted Answer

A)   marginal cost is above average variable costs.
B)   average fixed cost falls as output rises.
C)   fixed cost falls as capacity rises.
D)   total cost falls as more and more is produced.E) All of the above
F) None of the above

Question 10

Jill Johnson owns a pizzeria.She currently produces 10,000 pizzas per month at a total cost of $500.If she produced one more pizza her total cost rises to $500.11.What does this tell us about Jill's marginal cost of producing pizzas?

Accepted Answer

A)   The marginal cost of producing pizzas is constant.
B)   The marginal cost of producing pizzas is falling.
C)   The marginal cost of producing pizzas cannot be determined without more information.
D)   The marginal cost of producing pizzas is rising.E) A) and B)
F) A) and C)

Question 11

Which of the following is a reason why a firm would experience diseconomies of scale?

Accepted Answer

A)   To finance an increase in the size of its plant a firm must borrow more money or sell more shares of stock.
B)   As the size of the firm increases, it becomes more difficult to find markets where it doesn't already have operations.
C)   As the size of the firm increases it becomes more difficult to coordinate the operations of its manufacturing plants.
D)   As the size of the firm increases, it must operate in other countries where differences in language, customs, and laws increase its average costs.E) A) and C)
F) B) and C)

Question 12

The level of output at which all economies of scale have been exhausted is known as

Accepted Answer

A)   constant returns to scale.
B)   minimum efficient scale.
C)   the economically efficient output level.
D)   optimal economic size.E) A) and B)
F) All of the above

Question 13

Which of the following equations is incorrect?

Accepted Answer

A)   ATC - AFC = AVC
B)   AVC + AFC = ATC
C)   AFC = ATC - AVC
D)   ATC = AVC - AFCE) B) and C)
F) B) and D)

Question 14

As output increases,average fixed cost gets smaller and smaller.

Accepted Answer

A) True 
 B)False

Exam 8: Technology,Production,and Costs

Use a long-run average cost curve graph to illustrate how diseconomies of scale would not make it beneficial for two companies to go through with a merger.

Correct Answer
verified
Assume the two companies are o...
View Answer

If production displays constant returns to scale,then all economies of scale have been exhausted.

Correct Answer
verified

The level of output at which all economies of scale have been exhausted is known as

Correct Answer
verified

In economics,technology only refers to the development of new products.

Correct Answer
verified

Jill Johnson owns a pizzeria.She currently produces 10,000 pizzas per month at a total cost of $500.If she produced one more pizza her total cost rises to $500.11.What does this tell us about Jill's marginal cost of producing pizzas?

Correct Answer
verified

Which of the following is typically considered a fixed cost by academic book publishers but a variable cost by companies that print books?

Correct Answer
verified

Correct Answer
verified
a∙A=Marginal cost curve; B = A...
View Answer

Figure 8-1 -Refer to Figure 8-1.The marginal product of the 3rd worker is

Correct Answer
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Figure 8-5 -Refer to Figure 8-5.Curve G approaches curve F because

Correct Answer
verified

Correct Answer
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Which of the following equations is incorrect?

Correct Answer
verified

Which of the following is a reason why a firm would experience diseconomies of scale?

Correct Answer
verified

The total output produced by a firm divided by the quantity of workers employed by the firm is the definition of

Correct Answer
verified

As output increases,average fixed cost gets smaller and smaller.

Correct Answer
verified

Exam 8: Technology,Production,and Costs

Use a long-run average cost curve graph to illustrate how diseconomies of scale would not make it beneficial for two companies to go through with a merger.

Correct AnswerverifiedAssume the two companies are o...View AnswerShow Answer

If production displays constant returns to scale,then all economies of scale have been exhausted.

Correct AnswerverifiedShow Answer

The level of output at which all economies of scale have been exhausted is known as

Correct AnswerverifiedShow Answer

In economics,technology only refers to the development of new products.

Correct AnswerverifiedShow Answer

Jill Johnson owns a pizzeria.She currently produces 10,000 pizzas per month at a total cost of $500.If she produced one more pizza her total cost rises to $500.11.What does this tell us about Jill's marginal cost of producing pizzas?

Correct AnswerverifiedShow Answer

Which of the following is typically considered a fixed cost by academic book publishers but a variable cost by companies that print books?

Correct AnswerverifiedShow Answer

Correct Answerverifieda∙A=Marginal cost curve; B = A...View AnswerShow Answer

Figure 8-1 -Refer to Figure 8-1.The marginal product of the 3rd worker is

Correct AnswerverifiedShow Answer

Figure 8-5 -Refer to Figure 8-5.Curve G approaches curve F because

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following equations is incorrect?

Correct AnswerverifiedShow Answer

Which of the following is a reason why a firm would experience diseconomies of scale?

Correct AnswerverifiedShow Answer

The total output produced by a firm divided by the quantity of workers employed by the firm is the definition of

Correct AnswerverifiedShow Answer

As output increases,average fixed cost gets smaller and smaller.

Correct AnswerverifiedShow Answer

Correct Answer
verified
Assume the two companies are o...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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a∙A=Marginal cost curve; B = A...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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