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Basic Quiz
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1
Which of the following statements about the MP of labour is correct?
A)It may either rise or fall as more labour is used.
B)It always falls as more labour is used.
C)It always rises as more labour is used.
D)It is always constant.
2
Which of the following statements about marginal cost is correct?
A)It is always below average total costs.
B)It can be either above or below average total costs.
C)It is always below average variable costs.
D)It is always above average variable costs.
3
Which of the following statements is true about the average product of labour?
A)It is equal to total output divided by the quantity of labour inputs used.
B)It is equal to the increase in total output divided by the quantity of labour used.
C)It is equal to the change in the marginal product of labour.
D)It is equal to the quantity of labour inputs used divided by total output.
4
Which of the statements below is true about the marginal product of labour?
A)It is total output divided by the quantity of labour used.
B)It is the increase in total output resulting from the use of one more unit of labour.
C)It is the increase in total output divided by the quantity of labour used.
D)It is always constant.
E)5
5
What is the sum of the marginal costs of all of the units produced?
A)Total cost
B)Average cost
C)Total variable cost
D)Total fixed costs
E)5
6
What is average fixed cost?
A)All the costs that do not vary with the level of output
B)Total cost less total variable cost
C)Total fixed cost divided by the level of output
D)Total fixed costs less total variable costs
7
What is the sum of total variable costs and total fixed costs?
A)The sum of average product and marginal product
B)The sum of all marginal costs
C)Total cost
D)AVC times the quantity of output
8
All of the following items, except one, are explicit costs. Which is the exception?
A)The weekly cost of a lease on a building
B)The total wages paid each week
C)The monthly hydro bill
D)Money withdrawn from the business by the owner
9
Which of the following conditions is necessary in order to consider a cost a sunk cost?
A)It must have occurred over six months ago.
B)It must have occurred as a result of the purchase of a fixed asset.
C)It must have occurred as a result of the purchase of a fixed asset and have no resale value.
D)It must have occurred as a result of the purchase of a fixed asset and be fully paid for.
10
How do economists define economic capacity?
A)The maximum physical output possible
B)The output that maximizes total cost
C)The output that maximizes total product
D)The output that minimizes marginal cost
E)The output that minimizes average total cost
11
What is true at the point of maximum productivity?
A)The marginal product of labour is at a maximum.
B)The marginal costs of production is at a minimum.
C)The average product of labour is at a maximum.
D)The average total costs of production is at a minimum.
12
All of the following curves, except one, form a U shape when graphed. Which is the exception?
A)The marginal cost curve
B)The average variable cost curve
C)The average total cost curve
D)The average fixed cost curve
13
Which of the following pairs are related?
A)Maximum average product and minimum marginal cost
B)Maximum average product and minimum average variable cost
C)Maximum average product and minimum average variable cost
D)Maximum marginal product and minimum average total cost





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