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Exam 9: The Firm: Cost and Output Determination

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Question 51

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When average variable costs are rising,

A) marginal physical product is also rising.
B) marginal costs is falling.
C) average physical product is rising.
D) average physical product is falling.

E) A) and D)
F) B) and D)

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Question 52

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When total product is increasing at an increasing rate,marginal product is

A) positive and increasing.
B) positive and decreasing.
C) constant.
D) negative.

E) None of the above
F) A) and C)

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Question 53

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Which of the following statements is correct?

Which of the following would be a fixed input for an amusement park?

How is the long-run average cost curve found? What is its importance to the firm?

"Diminishing marginal product is a basic law because new workers are always less qualified than the existing workers." Do you agree or disagree? Explain.

Total product divided by the variable input is

Total product will start to decrease

Recently Apple Computer developed Apple's new iTunes Music Store,which offers more than 200,000 songs from five major record labels,for use with Apple's iPod and iMac.More than a million songs were downloaded the first week alone! In economic terms,CEO Steve Jobs helped convert capital and labor inputs into products consumers use.Any activity that results in the conversion of resources into products that can be used in consumption is

The relationship between inputs and outputs is known as

The best way to think of the short run and the long run is as

When the average physical product is falling,

A firm has the following production relationship between labor and output,for a fixed capital stock. $\begin{array} { c r } \hline\text { Labor } & \text { Output } \\\hline0 & 0 \\1 & 5 \\2 & 11 \\3 & 18 \\4 & 23 \\5 & 26\\\hline\end{array}$ -According to the above table,what is the average product of labor when five laborers are employed?

$\begin{array} { c c } \begin{array} { c } \text { Input of Labor } \\\text { (no. of workers } \\\text { in weeks) }\end{array} & \begin{array} { c } \text { Total Product } \\\text { (no. of snowboards } \\\text { produced) }\end{array} \\\hline 0 & 0 \\1 & 30 \\2 & 68 \\3 & 110 \\4 & 140 \\5 & 135 \\\hline\end{array}$ -In the above table,average physical product is 30 snowboards when

"In the short run,a firm cannot change any of its inputs." Do you agree or disagree? Explain.

-Refer to the above figure.Average variable costs are represented by curve

The typical cost curves are U-shaped due to the

$\begin{array} { c c } \text { Total Output } & \text { Total Costs } \\\hline 0 & \$ 10 \\1 & 18 \\2 & 21 \\3 & 23 \\4 & 24 \\5 & 26 \\6 & 29 \\7 & 33 \\8 & 38 \\9 & 44 \\10 & 51\end{array}$ -In the above table,when output is 8 units,average total costs are

The time period during which a firm's capital is fixed but its labor is variable is called

What is the difference between average variable costs and average total costs?