Econ 001 - Principles of Microeconomics » Summer 2019 » Quiz 8

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Question #1
A production function describes how firms
A.   combine capital, labor and other inputs to create products.
B.   determine the profit-maximizing quantity of output.
C.   describe demand conditions in their markets.
Question #2
Natural resources and labor are two factors of what?
A.   capital
B.   production
C.   scarcity
Question #3
Which of the following are true statements about natural resources?
A.   natural resources can be used by people to produce goods and services
B.   the natural resources available to us are fixed and cannot be expanded
C.   natural resources are made by people out of natural materials
Question #4
Capital is a factor of production that has been produced for use in the production of other goods and services. Which of the following are examples of capital?,,
A.   money
B.   computer software
C.   airports
Question #5
Interest payments are ________.
A.   explicit costs
B.   implicit costs
C.   hidden costs
Question #6
When an owner uses resources they own in a business, that usage should be considered
A.   a direct cost
B.   an implicit cost
C.   an explicit cost
Question #7
If hiring labor for the winter costs $100/unit and a unit of capital costs $400, what production method should be chosen? What method should be chosen if the cost of labor rises to $200/unit?
A.   Method 1
B.   Method 3
C.   Method 2
Question #8
Economies of scale may arise from which of the following activities?,,
A.   Having a larger retail space can expand sales more than proportionately.
B.   Doubling promotional expenses to expand sale more than proportionately.
C.   Government economic subsidies protect firms from competition to avoid losses.
Question #9
The term ________ describes a situation where the quantity of output rises, but the average cost of production falls.
A.   economies of scale
B.   diseconomies of scale
C.   diminishing marginal returns
D.   marginal cost output
Question #10
Which is (are) an example of a fixed cost?,,
A.   Hiring more dance instructors for a dance studio
B.   Insurance for running a dance studio
C.   Rental costs for a dance studio
D.   The electrical costs for running the studio
Question #11
________ include all spending on labor, machinery, tools, and supplies purchased from other firms.
A.   Total costs
B.   Total profits
C.   Total revenues
D.   Total profit margins
Question #12
2 When the Total Product curve reaches its maximum point, the value of the Marginal Product at that point is ________.
A.   Decreasing
B.   Increasing
C.   Zero
Question #13
The upward sloping portion of a short-run total cost curve illustrates:
A.   Diminishing marginal returns
B.   Neither of the above
C.   Diseconomies to scale
Question #14
________ include all of the costs of production that increase with the quantity produced.
A.   Average costs
B.   Variable costs
C.   Fixed costs
Question #15
Which of the following are examples of long-run fixed costs:
A.   Payments for production inputs
B.   Mortgage payments
C.   Hourly wage costs
D.   None of the above

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