# econ test 2 ch. 6 pt .3

### 50 terms by russ4555

#### Study  only

Flashcards Flashcards

Scatter Scatter

Scatter Scatter

## Create a new folder

title

### The marginal cost curve:

generally falls at first and then rises as output expands.

fall.

### Average fixed cost:

is characterized by both a. and c.

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.

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.

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.

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.

X; Z; Y

### When average total cost is decreasing as output expands:

marginal cost must be less than average total cost.

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.

ninth

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.

ninth

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.

X; Z; Y

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.

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.

Example: