econ test 2 ch. 6 pt .3

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The marginal cost curve:

generally falls at first and then rises as output expands.

When marginal product is rising, marginal costs will:

fall.

Average fixed cost:

is characterized by both a. and c.

In the short run, ATC is not always higher than

MC

Economies of scale:

pertain to the long run only.

Which of the following is true?

If average total cost exceeds marginal cost, then average total cost is decreasing.

Which of the following cost curves is not generally U-shaped?

AFC

When there are economies of scale in production:

long-run average total cost declines as output expands.

If average variable cost exceeds marginal cost, then:

both the average variable and average total cost are decreasing.

Which of the following is true in the short run?

All of the above are true.

Which of the following is true at the output level where diminishing marginal product first set in?

Marginal product is at a maximum and marginal cost is at a minimum

A firm's average fixed cost curve is:

a curve that declines as output expands and approaches the X-axis when output is large.

How much are average fixed costs (in dollars) at 4 units of output?

10

The distance Y between the two curves in the diagram is:

the total variable cost of producing five units of output.

If a firm experiences increasing returns to scale at all levels of output:

the slope of its long-run average total cost curve is everywhere negative.

Constant returns to scale indicate that a firm is experiencing:

per unit costs of production that remain stable as the scale of output expands.

A factory producing CD players finds that its output varies with the number of workers employed each week in the following way: Refer to the table below.

fifth

When economies of scale exist:

per unit production costs decline as output expands.

Kelly, who grows geraniums to sell, is currently producing a level of output at which her marginal cost equals her average variable cost. What must be true about Kelly's average variable cost at this level of output?

It is at a minimum.

At a quantity of five units of output, ____ represents total cost, ____ represents total fixed cost, and ____ represents total variable cost.

X; Z; Y

When average total cost is decreasing as output expands:

marginal cost must be less than average total cost.

What is the marginal product of the second worker hired each week?

20 bicycles

The short-run average total cost curve eventually turns upward to form a U shape because:

of diminishing marginal productivity

A factory producing CD players finds that its output varies with the number of workers employed each week in the following way: Refer to the table below.

18 units of output.

The total product of labor diminishes with the addition of the ____ picker.

ninth

When marginal product is rising, marginal costs will:

fall.

Kelly, who grows geraniums to sell, is currently producing a level of output at which her marginal cost equals her average variable cost. What must be true about Kelly's average variable cost at this level of output?

It is at a minimum.

When there are economies of scale in production:

long-run average total cost declines as output expands.

The distance Y between the two curves in the diagram is:

the total variable cost of producing five units of output.

Marginal product begins to diminish:

with the third worker hired.

The total product of labor diminishes with the addition of the ____ picker.

ninth

If the firm's goal is to maximize weekly output, how many workers should the firm employ each week?

four workers

Marginal product begins to diminish:

with the third worker hired.

Which of the following must be true if the short-run average total cost curve is declining?

Marginal cost is less than average total cost.

When there are economies of scale in production:

long-run average total cost declines as output expands

Luke realizes that his space taxi service is operating in the region of diminishing marginal product. As he provides more taxi service in the short run, what will happen to the marginal cost of providing the additional service?

Marginal cost will increase.

At a quantity of five units of output, ____ represents total cost, ____ represents total fixed cost, and ____ represents total variable cost.

X; Z; Y

Which of the following cost curves is not generally U-shaped?

AFC

Which of the following is true in the short run?

All of the above are true.

If a firm experiences increasing returns to scale at all levels of output:

the slope of its long-run average total cost curve is everywhere negative.

The distance Y between the two curves in the diagram is:

the total variable cost of producing five units of output.

As quantity increases, which of the following must be true if average total costs are rising?

Marginal cost must be greater than average total cost.

The marginal cost curve:

generally falls at first and then rises as output expands.

AVC is falling, while ATC is falling

when MC is below AVC.

When economies of scale exist, an increase in the level of output will lead to:

a decrease in cost per unit.

Constant returns to scale indicate that a firm is experiencing:

per unit costs of production that remain stable as the scale of output expands.

The average variable cost curve is the curve labeled:

B

The marginal product of the fifth worker hired is:

18 units of output.

If marginal cost is increasing then:

none of the above must necessarily be true.

If a firm experiences increasing returns to scale at all levels of output:

the slope of its long-run average total cost curve is everywhere negative.

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