Econ 101 - Microeconomics » Summer 2021 » iVAT Chapter 11

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Question #1
Implicit costs refer to:
A.   Marginal costs divided by output.
B.   None of the available answers.
C.   Total costs plus explicit costs.
D.   Opportunity costs of the next best alternative that must be estimated.
E.   Variable costs.
Question #2
Alex withdrew $500,000 from an account that paid 5 percent annual interest and used the funds to purchase real estate. After one year he sold the property for $550,000. Alex's economic profit on this deal was:
A.   50,000
B.   120,000
C.   Not enough information provided.
D.   500,000
E.   25,000
Question #3
In the long run:
A.   All output is fixed.
B.   Some inputs are fixed.
C.   Some inputs are variable and some are fixed.
D.   All inputs are variable.
E.   The firm is constrained in regard to what production decisions it can make.
Question #4
In the short run:
A.   The amount of labor employed is not variable.
B.   The size of the factory is variable.
C.   The number of factories is variable.
D.   The amount of labor employed is variable.
Question #5
Refer to the graph shown. Within which section(s) of the production function is marginal product decreasing?
A.   B
B.   A and B
C.   B and C
D.   A
Question #6
If the total product line slopes downwards:
A.   Average product is increasing.
B.   Marginal product is positive.
C.   Marginal product is negative.
D.   Marginal product is equal.
Question #7
During periods of increasing marginal productivity:
A.   Average product is constant, which leads to an increase in average product.
B.   Average product is increasing.
C.   Marginal product is decreasing.
D.   Average product is decreasing.
Question #8
Average total cost is equal to:
A.   Fixed cost divided by total output.
B.   Fixed cost divided by number of workers.
C.   Total variable cost divided by total fixed cost.
D.   Total cost divided by total output.
E.   Total cost divided by marginal cost.
Question #9
Total Cost is comprised of:
A.   Fixed costs and variable costs.
B.   Variable costs.
C.   Marginal costs plus variable costs.
D.   Fixed costs, but variable costs are excluded.
Question #10
Average variable cost:
A.   Is output plus variable costs.
B.   Is total output divided by variable costs.
C.   Is total variable costs divided by total output.
D.   Is total fixed costs divided by total output.
Question #11
All else being equal, when marginal productivity falls:
A.   Average costs decline rapidly.
B.   Marginal costs must rise.
C.   Average costs must fall.
D.   Average costs must rise.
E.   Marginal costs must fall.
Question #12
The change or increase in cost associated with a one unit increase in output is called:
A.   Declining relative costs.
B.   Marginal cost.
C.   Variable cost.
D.   Average cost.
E.   Total cost.
Question #13
Declining marginal productivity is associated with increasing marginal costs:
A.   Due to increases in the size of a factory.
B.   Because per-unit labor costs fall due to decreases in productivity.
C.   Because economies of scale are being utilized.
D.   Because per-unit labor costs rise due to decreases in productivity.
Question #14
The distance between the Total cost (TC) curve and the variable cost (VC) curve is:
A.   Variable costs.
B.   Average fixed costs.
C.   Average total costs.
D.   Fixed costs.
Question #15
Average fixed costs (AFC) decline as production is increased:
A.   Due to the fact that fixed costs are being spread over an increasing number of units produced.
B.   Because total costs are declining.
C.   Due to the fact that production is becoming increasingly efficient.
D.   Due to the fact that variable costs are being spread over an increasing number of units produced.
Question #16
You run a small business producing candles. This month your total cost is $10,000, your variable cost is $5,000, and your output is 5,000 candles. Given this information, your:
A.   Average fixed cost is $1.
B.   Average variable cost is $2.
C.   Average total cost is $1.
D.   Average total cost is $3.
Question #17
The marginal cost curve intersects:
A.   The total cost curve and the total variable cost curve at their minimum point.
B.   The average variable cost and average total cost curves at their minimum points.
C.   The average fixed cost curve at its maximum point.
D.   The average fixed cost curve at its minimum point.
Question #18
If Billy’s GPA is currently a C and the grade he receives in his next class is a B, then his:
A.   Not enough information provided.
B.   Marginal grade is less than his average grademarginal grade is less than his average grade.
C.   Overall GPA will fall.
D.   Overall GPA will remain the same.
E.   Overall GPA will increase.
Question #19
Once marginal product goes below average product:
A.   Average variable costs will begin to decline.
B.   Average total costs will begin to rise.
C.   Average fixed costs will rise.
D.   Average variable costs will begin to rise.
Question #20
If marginal product is above average product:
A.   Average product is decreasing and average variable costs are declining.
B.   Average variable costs will be rising.
C.   Total costs will be declining.
D.   Average product is increasing and average variable costs are declining.
Question #21
The marginal cost curve intersects the:
A.   Average fixed cost curve at its minimum point.
B.   Variable cost curve at its minimum point.
C.   Average variable cost curve at its minimum point.
D.   Total cost curve at its minimum point.
Question #22
If marginal cost is greater than average variable cost, average variable cost will:
A.   Not change as output increases.
B.   Equal average total cost.
C.   Decrease as output increases.
D.   Increase as output increases.
Question #23
If marginal cost is less than average variable cost, average variable cost will:
A.   Decrease as output rises.
B.   Remain constant as output rises.
C.   Equal average total cost.
D.   Increase as output rises.

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