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.   production
B.   capital
C.   scarcity
Question #3
Which of the following are true statements about natural resources?
A.   the natural resources available to us are fixed and cannot be expanded
B.   natural resources are made by people out of natural materials
C.   natural resources can be used by people to produce goods and services
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.   airports
C.   computer software
Question #5
Interest payments are ________.
A.   explicit costs
B.   hidden costs
C.   implicit costs
Question #6
When an owner uses resources they own in a business, that usage should be considered
A.   a direct cost
B.   an explicit cost
C.   an implicit 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.   Doubling promotional expenses to expand sale more than proportionately.
B.   Government economic subsidies protect firms from competition to avoid losses.
C.   Having a larger retail space can expand sales more than proportionately.
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.   diminishing marginal returns
C.   marginal cost output
D.   diseconomies of scale
Question #10
Which is (are) an example of a fixed cost?,,
A.   The electrical costs for running the studio
B.   Insurance for running a dance studio
C.   Hiring more dance instructors for a dance studio
D.   Rental costs for a dance studio
Question #11
________ include all spending on labor, machinery, tools, and supplies purchased from other firms.
A.   Total profits
B.   Total costs
C.   Total profit margins
D.   Total revenues
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.   Zero
C.   Increasing
Question #13
The upward sloping portion of a short-run total cost curve illustrates:
A.   Diminishing marginal returns
B.   Diseconomies to scale
C.   Neither of the above
Question #14
________ include all of the costs of production that increase with the quantity produced.
A.   Variable costs
B.   Average costs
C.   Fixed costs
Question #15
Which of the following are examples of long-run fixed costs:
A.   Mortgage payments
B.   Hourly wage costs
C.   Payments for production inputs
D.   None of the above

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