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Microeconomics - Chapter 6 (ISBN-10: 1429218290)

Microeconomics - Chapter 6 (ISBN-10: 1429218290)

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Published by Brooke Mitchelle
These answers are ALL correct.

ISBN-10: 1429218290
ISBN-13: 9781429218290
These answers are ALL correct.

ISBN-10: 1429218290
ISBN-13: 9781429218290

More info:

Published by: Brooke Mitchelle on Jun 11, 2011
Copyright:Attribution Non-commercial

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07/29/2013

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 Page 1
 Name: __________________________ Date: _____________ 1.
 
Average variable cost is the ratio of:A) total cost to the marginal cost.B) total cost to the amount of variable input.C) variable cost to the quantity of output.D) marginal cost to the quantity of output.2.
 
Marginal cost is the change in:A) total product resulting from a one-unit change in a variable input.B) total cost resulting from a one-unit change in quantity of a variable input.C) total cost divided by the change in output.D) average cost resulting from a one-unit change in quantity of output.3.
 
If a firm experiences lower costs per unit as it increases production in the long run, this is an example of:A) increasing returns to scale.B) decreasing returns to scale.C) increasing opportunity costs.D) scale reduction.4.
 
When an increase in the firm's output reduces its long-run average total cost, it experiences:A) increasing returns to scale.B) decreasing returns to scale.C) constant returns to scale.D) variable returns to scale.5.
 
A factor of production whose quantity can be changed during a particular period is a(n):A) marginal factor of production.B) fixed factor of production.C) incremental factor of production.D) variable factor of production.6.
 
In the long run, all costs are:A) fixed.B) constant.C) variable.D) marginal.Use the following to answer question 7:
 
Figure: Long-Run Average Cost
 
 Page 2
7.
 
(Figure: Long-Run Average Cost) Output per period in the region from 0 to
 A
indicates that a firm is experiencing:A) decreasing returns to scale.B) constant returns to scale.C) increasing returns to scale.D) negative costs of production.8.
 
Diminishing marginal returns occur when:A) each additional unit of a variable factor adds more to total output than the previous unit.B) an additional variable factor adds less to total output than the previous unit.C) the marginal product of a variable factor is increasing, but at a decreasing rate.D) total product decreases.9.
 
When an increase in the firm's output reduces its long-run average total cost, it experiences:A) economies of scale.B) diseconomies of scale.C) constant returns to scale.D) variable returns to scale.10.
 
The total cost curve for a snowmobile dealership shows how ________ cost depends on the quantity of ________.A) total; fixed inputsB) average; variableC) total; outputD) marginal; output11.
 
The slope of a long-run average total cost curve exhibiting decreasing returns to scale is:A) zero.B) infinite.C) positive.D) negative.12.
 
If Marie Marionettes is operating under conditions of diminishing marginal product, the marginal costs will be:A) equal to
 ATC.
 B) decreasing.C) increasing.D) constant.13.
 
Marginal cost ________ over the range of increasing marginal returns and ________ over the range of diminishingmarginal returns.A) increases; fallsB) falls; increasesC) is constant; risesD) increases; is constant
 
 Page 3
Use the following to answer questions 14-15:
 
Figure: A Firm's Cost Curves
14.
 
(Figure: A Firm's Cost Curves) The curve labeled
represents the firm's ________ curve.A) total costB) average total costC) marginal costD) average variable cost15.
 
(Figure: A Firm's Cost Curves) The curve
 X 
represents the firm's ________ curve.A) marginal costB) average total costC) average fixed costD) average variable cost16.
 
Buffalo Aircraft doubles the amount of all the inputs it usesóthe factory doubles in size and twice as many workersare hired. After this expansion, the number of aircraft produced triples. This means that Buffalo Aircraft isexperiencing:A) increasing marginal cost.B) economies of scale.C) increasing average total cost.D) decreasing average variable cost.Use the following to answer question 17:
 
Table: Output and Costs
 

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