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| 1 | |
A firm will earn an economic profit if: |
| | A) | its total sales revenue equals the cost of labor and raw materials. |
| | B) | it produces its output utilizing the least-cost production method. |
| | C) | it is regulated by government. |
| | D) | its total sales revenue exceeds the sum of all of its economic costs. |
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| 2 | |
The distinguishing feature of the short run is that: |
| | A) | at least one input is fixed. |
| | B) | output is fixed. |
| | C) | input prices are variable. |
| | D) | technology is variable. |
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| 3 | |
The increase in total output arising from the employment of an additional worker describes: |
| | A) | marginal cost. |
| | B) | marginal revenue. |
| | C) | total product. |
| | D) | marginal product. |
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| 4 | |
The WXY Corporation has fixed costs of $50. Its total variable costs (TVC) vary with output as shown in the following table. <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073511455/991476/ch06_q4.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (10.0K)</a>]]>
Refer to the table. The average total cost of 4 units of output is: |
| | A) | $27.50 |
| | B) | $40.00 |
| | C) | $52.50 |
| | D) | $210.00 |
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| 5 | |
Which one of the following short-run cost curves would not be affected by an increase in the wage paid to a firm's workers? |
| | A) | Average variable cost |
| | B) | Average fixed cost |
| | C) | Average total cost |
| | D) | Marginal cost |
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| 6 | |
As output rises, average fixed cost: |
| | A) | remains constant as it contributes to the production of goods and services. |
| | B) | continues to rise as more and more output is produced. |
| | C) | falls. |
| | D) | experiences none of the above. |
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| 7 | |
Answer the question based on the cost data in the following table: <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073511455/991476/ch06_q7.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (22.0K)</a>]]>
Refer to the table. The total cost of producing 5 units of output is: |
| | A) | $64 |
| | B) | $200 |
| | C) | $320 |
| | D) | $400 |
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| 8 | |
The WXY Corporation has fixed costs of $30. Its total variable costs (TVC) vary with output as shown in the following table. <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073511455/991476/ch06_q8.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (9.0K)</a>]]>
Refer to the table. The marginal cost of the fourth unit of output is: |
| | A) | $30 |
| | B) | $40 |
| | C) | $50 |
| | D) | $60 |
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| 9 | |
Diminishing returns occur in the _______ and diseconomies of scale occur in the __________. |
| | A) | long run; long run |
| | B) | long run; short run |
| | C) | short run; long run |
| | D) | short run; short run |
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| 10 | |
Which one of the following must increase if output decreases? |
| | A) | Marginal cost |
| | B) | Average fixed cost |
| | C) | Average variable cost |
| | D) | Average total cost |
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