Chapter 07 Test Answers – Flashcards
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Flour
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Which of the following is a factor of production for the Little Biscuit Bread Company
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How a firms' production increases as it adds more labor
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A production function shows
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Higher output per worker
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Greater labor productivity means
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Using the fewest resources to produce a good or service
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When a firm produces a technically efficient output level, it is
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The quantity of labor changes
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The short-run production function shows how output changes when
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A production function tells us the maximum amount of output attainable from the use of all resources.
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Which of the following statements is NOT True regarding the production function and the production possibilities curve?
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Marginal physical product
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The change in total output associated with one additional unit of input is the
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Enough workers to produce where the MPP equals zero.
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If a firm could hire all the work or is it wanted at a zero wage (the workers are volunteers) the firm should hire
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Efficiency will suffer as a restaurant becomes too crowded with employees
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As in and out burger restaurant increases the number of employees for a specific restaurant
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The difference between total revenue and total cost
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Profit is
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Is the change in total cost from producing one additional unit of output
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Marginal cost
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$1.33
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If an additional unit of labor cost $20 and has a MPP of 15 units of output, the marginal cost is
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Rises as a direct result of diminishing returns
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Marginal cost
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Marginal cost of each unit of output is rising
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If the marginal physical product MPP is
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Total cost
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The sum of fixed costs and variable costs at any rate of output is
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Fixed costs
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In the short run, when a firm produces zero output, total cost equals
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Fixed costs
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Which of the following do NOT change when output changes in the short run?
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Property taxes
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Which of the following is most likely a fixed cost?
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The rent for a factory
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Which of the following is most likely a fixed cost?
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Variable costs
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Changes in short-run total cost result from changes in
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The cost divided by quantity produced
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Average total cost is equal to
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The change in total cost divided by the change in quantity produced
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Marginal cost is equal to
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Labor and raw material costs
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In the short-run, which of the following is most likely a variable cost?
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Rent, wages, and all other costs are variable in the long run.
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In the long run which of the following is likely to be a variable cost
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Fixed costs are $2000
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Sam surf shop has total cost of $2000 when it's not producing any surfboards. This means that
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It tells the firm what the profit per unit is produced is
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Average total cost is important to a business because
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Long-run decision, and therefore an investment decision
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Intel's chief executive says the company my expanded technology it is using in its planned to $2.5 billion chip-manufacturing factory in China if the US government allows it, underscoring the technology giant's ambitions in the world fourth biggest economy. The InTell executive is making a
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Total cost that result from using operations of a larger size
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Economies of scale are reductions in average
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Economies of scale must exist
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When the size of a factory (and all its associated inputs) doubles and, as a result, output more than doubles,
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The upward-sloping segment of the long-run average total cost curve
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Diseconomies of scale are reflected
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A higher wage rate
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Which of the following is least likely to increase productivity
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$ .67 per unit 10/15
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When the wage rate is $10 per hour and the MPP of a worker is 15 units per hour, the unit labor cost is
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Average total cost curve downward
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Technilogical changes that increase productivity shift the
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Shift the long-run ATC curve downward
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Higher education levels and better management
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Increase marginal cost
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The creation of the World Wide Web has contributed to all of the following except
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Economies of scale
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One in a news article titled "funeral giant moves in on small rivals" reports that profit for a Houston-based funeral giant is $.31 on every dollar versus a profit of $.12 for the funeral industry in general. Such profits are most likely a result of
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Because productivity advances were greater than wage increases
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According to the world view article titled "United States gained cost advantage" during the last decade, unit labor cost in the United States declined
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This investment by Ford is a long run production decision, and the company plans to enjoy economies of scale
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The in the news article "Ford palms $400 million into Kansas City plant" says that
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This investment by Ford is a long run production decision, and the company plans to enjoy economies of scale
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The in the news article "Ford palms $400 million into Kansas City plant" says that
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This investment by Ford is a long run production decision, and the company plans to enjoy economies of scale
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The in the news article "Ford palms $400 million into Kansas City plant" says that
