Question 1

Figure 7-9 
-Refer to Figure 7-9 above to solve the following problems.
a.Calculate the fixed cost of production.
b.Calculate the average total cost of production when the firm produces 20 units of output.
c.Calculate the average variable cost of production when the firm produces 20 units of output.
d.Calculate the average fixed cost of production when the firm produces 20 units of output.
e.Calculate the average fixed cost of production when the firm produces 15 units of output.
f.If the firm increases output from 15 to 20 units what is the marginal cost of output?

Accepted Answer

a.$100
b.$...

Question 2

Which of the following are examples of a firm experiencing a positive technological change?
a.A firm is able to reduce its inputs by 15 per cent and still produce the same level of output.
b.A seminar attended by the firm's workers makes them more productive.
c.A firm adds 5 per cent to its workforce and is able to maintain its initial level of output.
d.A firm restructures its distribution system and is able to save on its shipping times.
e.A firm rearranges its warehouse and finds that it can use fewer workers to maintain its productivity level.

Accepted Answer

Examples a,b,d,and e are examples of pos...

Question 3

Figure 7-1 
-Refer to Figure 7-1.Diminishing marginal productivity sets in after

Accepted Answer

A)  the 2nd worker is hired.
B)  the 3rd worker is hired.
C)  the 4th worker is hired.
D)  the 5th worker is hired.

Question 4

Explain how the listed events (a-d)would affect the following at Hilton Hotels.
i.Marginal cost
ii.Average variable cost
iii.Average fixed cost
iv.Average total cost
a.Hilton decides on an across-the-board 5 per cent increase in executive salaries.
b.Hilton decides to eliminate all print advertising.
c.Hilton signs a new contract with the Culinary Workers Union that requires the company to increase wages for all its kitchen workers.
d.The federal government starts to levy a $5 room tax on all hotel rooms.

Accepted Answer

a.Average fixed cost and average total c...

Question 5

As a firm hires more labour in the short run,the

Accepted Answer

A)  level of total product stays constant.
B)  output per worker rises.
C)  extra output of another worker may rise at first,but eventually must fall.
D)  costs of production are increasing at a fixed rate per unit of output.

Question 6

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.

Question 7

Figure 7-6  Figure 7-6 contains information about the short-run cost structure of a firm.
-Refer to Figure 7-6.In the figure above,which letter represents the marginal cost curve?

Accepted Answer

A)  A
B)  B
C)  C
D)  D

Question 8

The processes a firm uses to turn inputs into outputs of goods and services is called

Accepted Answer

A)  technology.
B)  technological change.
C)  marginal analysis.
D)  positive economic analysis.

Question 9

Higher isocost lines correspond to higher

Accepted Answer

A)  profits.
B)  total costs of production.
C)  input prices.
D)  sales revenue.

Question 10

If marginal product is equal to average product,then total product is at a maximum.

Accepted Answer

A) True 
 B)False

Question 11

A firm has successfully adopted a positive technological change when

Accepted Answer

A)  it can produce more output using the same inputs.
B)  it produces less pollution in its production process.
C)  it can pay its workers less yet increase its output.
D)  it sees an increase in worker productivity.

Question 12

As the level of output increases,what happens to the value of average fixed cost,and what happens to the difference between the value of average total cost and average variable cost?

Accepted Answer

As the level of output increases,the val...

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Figure 7-2 2 because A) the marginal product of labour is below the average product of labour. B) the marginal product of labour is falling. C) the marginal product of labour is negative. D) the marginal product of labour is positive." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 7-2.The average product of labour declines after L2 because

Accepted Answer

A)  the marginal product of labour is below the average product of labour.
B)  the marginal product of labour is falling.
C)  the marginal product of labour is negative.
D)  the marginal product of labour is positive.

Question 15

Which of the following costs will not change as output changes?

Accepted Answer

A)  marginal cost
B)  total variable cost
C)  average variable cost
D)  total fixed cost

Question 16

The additional output a firm produces by hiring one more worker is called the marginal product of labour.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following can a firm do in the long run but not in the short run?

Accepted Answer

A)  decrease the size of its physical plant
B)  reduce its rate of output by laying off workers
C)  increase its variable costs
D)  increase its use of raw materials

Question 18

Average total cost is equal to

Accepted Answer

A)  average fixed cost minus average variable cost.
B)  total cost divided by the level of output.
C)  marginal cost plus variable cost.
D)  total cost divided by the number of workers.

Question 19

Figure 7-1 
-Refer to Figure 7-1.The marginal product of the 3rd worker is

Accepted Answer

A)  57.
B)  19.
C)  15.
D)  11.

Question 20

Which of the following describes how output changes in the short run? Because of specialisation and the division of labour,as more workers are hired

Accepted Answer

A)  output will first increase at an increasing rate,then output will increase at a decreasing rate.
B)  output will first decrease at an increasing rate,then increase at a decreasing rate.
C)  the marginal product of labour will first decrease,then increase at a decreasing rate.
D)  the marginal product of labour will first be negative and then will be positive.

Exam 7: Technology, Production and Costs

Correct Answer
verified
a.$100
b.$...
View Answer

Figure 7-1 -Refer to Figure 7-1.Diminishing marginal productivity sets in after

Correct Answer
verified

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

Correct Answer
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Which of the following costs will not change as output changes?

Correct Answer
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Figure 7-6 Figure 7-6 contains information about the short-run cost structure of a firm. -Refer to Figure 7-6.In the figure above,which letter represents the marginal cost curve?

Correct Answer
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Higher isocost lines correspond to higher

Correct Answer
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Which of the following describes how output changes in the short run? Because of specialisation and the division of labour,as more workers are hired

Correct Answer
verified

Figure 7-2 -Refer to Figure 7-2.The average product of labour declines after L₂ because

Correct Answer
verified

The additional output a firm produces by hiring one more worker is called the marginal product of labour.

Correct Answer
verified

A firm has successfully adopted a positive technological change when

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified
Examples a,b,d,and e are examples of pos...
View Answer

If marginal product is equal to average product,then total product is at a maximum.

Correct Answer
verified

As a firm hires more labour in the short run,the

Correct Answer
verified

Figure 7-1 -Refer to Figure 7-1.The marginal product of the 3rd worker is

Correct Answer
verified

Average total cost is equal to

Correct Answer
verified

The processes a firm uses to turn inputs into outputs of goods and services is called

Correct Answer
verified

As the level of output increases,what happens to the value of average fixed cost,and what happens to the difference between the value of average total cost and average variable cost?

Correct Answer
verified
As the level of output increases,the val...
View Answer

Correct Answer
verified
a.Average fixed cost and average total c...
View Answer

Which of the following can a firm do in the long run but not in the short run?

Correct Answer
verified

Exam 7: Technology, Production and Costs

Correct Answerverifieda.$100b.$...View AnswerShow Answer

Figure 7-1 -Refer to Figure 7-1.Diminishing marginal productivity sets in after

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following costs will not change as output changes?

Correct AnswerverifiedShow Answer

Figure 7-6 Figure 7-6 contains information about the short-run cost structure of a firm. -Refer to Figure 7-6.In the figure above,which letter represents the marginal cost curve?

Correct AnswerverifiedShow Answer

Higher isocost lines correspond to higher

Correct AnswerverifiedShow Answer

Which of the following describes how output changes in the short run? Because of specialisation and the division of labour,as more workers are hired

Correct AnswerverifiedShow Answer

Figure 7-2 -Refer to Figure 7-2.The average product of labour declines after L2 because

Correct AnswerverifiedShow Answer

The additional output a firm produces by hiring one more worker is called the marginal product of labour.

Correct AnswerverifiedShow Answer

A firm has successfully adopted a positive technological change when

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedExamples a,b,d,and e are examples of pos...View AnswerShow Answer

If marginal product is equal to average product,then total product is at a maximum.

Correct AnswerverifiedShow Answer

As a firm hires more labour in the short run,the

Correct AnswerverifiedShow Answer

Figure 7-1 -Refer to Figure 7-1.The marginal product of the 3rd worker is

Correct AnswerverifiedShow Answer

Average total cost is equal to

Correct AnswerverifiedShow Answer

The processes a firm uses to turn inputs into outputs of goods and services is called

Correct AnswerverifiedShow Answer

As the level of output increases,what happens to the value of average fixed cost,and what happens to the difference between the value of average total cost and average variable cost?

Correct AnswerverifiedAs the level of output increases,the val...View AnswerShow Answer

Correct Answerverifieda.Average fixed cost and average total c...View AnswerShow Answer

Which of the following can a firm do in the long run but not in the short run?

Correct AnswerverifiedShow Answer

Correct Answer
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a.$100
b.$...
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Figure 7-2 -Refer to Figure 7-2.The average product of labour declines after L₂ because

Correct Answer
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Examples a,b,d,and e are examples of pos...
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As the level of output increases,the val...
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a.Average fixed cost and average total c...
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Correct Answer
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