Quiz 10 of ECON251 Purdue University In Tutorial Library

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TITLE: Quiz 10 of ECON251 Purdue University

UNIVERSITY / INSTITUTE: Purdue University

CLASS / COURSE: Economics

QUESTION DESCRIPTION:

Quiz 10:
 
1. (Points: 0.67)
An example of a long run adjustment is:
a. a. your university offers Saturday morning classes next fall.
b. b. Ford Motor Company lays off 2,000 assembly line workers.
c. c. a soybean farmer turns on the irrigation system after a month long dry
spell.
d. d. Walmart builds another Supercenter.
2. (Points: 0.67)
The long run average cost curve shows:
a. a. the lowest average cost of producing every level of output in the
long run.
b. b. where the most profitable level of output occurs.
c. c. the average cost of producing where diminishing returns are not
present.
d. d. the plant size or scale that the firm should build.
3. (Points: 0.67)
Marginal cost is U-shaped because of the:
a. a. law of demand.
b. b. law of diminishing marginal utility.
c. c. law of diminishing returns.
d. d. law of increasing costs.
4. (Points: 0.67)
If 11 workers can produce a total of 54 units of a product and another worker has a
marginal product of six, then the average product of 12 workers is:
a. a. 60.
b. b. 54.
c. c. 48.
d. d. 5.
5. (Points: 0.67)
If average total cost is $50 and average fixed cost is $15 when output is 20 units,
then the firm's total variable cost at that level of output is:
a. a. $1,000.
b. b. $700.
c. c. $300.
d. d. impossible to determine without additional information.
6. (Points: 0.67)
If average total cost is $50 and average fixed cost is $15 when output is 20 units,
then the firm's average variable cost at that level of output is:
a. a. $45.
b. b. $35.
c. c. $30.
d. d. impossible to determine without additional information.
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7. (Points: 0.67)
The minimum efficient scale is:
a. a. the level of output where diminishing returns have not set in yet.
b. b. the plant size that yields the most profit.
c. c. level of operation where long run average costs are lowest.
d. d. the smallest output level where the firm finally reaches productive
efficiency.
8. (Points: 0.67)
Marginal cost is equal to the:
a. a. change in total cost divided by the change in output.
b. b. change in average total costs divided by the change in output.
c. c. change in total product divided by the change in output.
d. d. change in average product divided by the change in output.
9. (Points: 0.66)
A characteristic of the long run is:
a. a. there are no fixed inputs.
b. b. all inputs can be varied.
c. c. plant capacity can be increased or decreased.
d. d. all of these.
10. (Points: 0.66)
Economics cost of production differ from those in accounting in that:
a. a. economics includes expenditures for hired resources while accounting
does not.
b. b. economics adds the opportunity cost of a firm using its own
resources.
c. c. accounting includes expenditures for hired resources while economics
does not.
d. d. accounting costs are always larger than economic costs.
11. (Points: 0.66)
The short run is:
a. a. one day.
b. b. one week.
c. c. six months.
d. d. as long it takes a particular firm to change its plant capacity.
12. (Points: 0.67)
Long run costs are U-shaped because:
a. a. of the law of demand.
b. b. of the law of diminishing returns.
c. c. of economies and diseconomies of scale.
d. d. of the law of supply.
13. (Points: 0.66)
Which of the following is an implicit cost of production?
a. a. Interest paid on a loan to a bank.
b. b. Wages paid to labor plus the cost of carrying benefits for workers.
c. c. The utility bill paid to water, electricity, and natural gas companies.
d. d. Rent that could have been earned on a building owned and
used by the firm.
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14. (Points: 0.67)
When a firm's long-run average cost curve is horizontal for a range of output, then in
that range the firm has:
a. a. increasing returns to scale.
b. b. constant returns to scale.
c. c. decreasing returns to scale.
d. d. constant average fixed costs.
15. (Points: 0.66)
The average total cost of production is the:
a. a. extra cost required to produce one more unit.
b. b. total cost of production.
c. c. total cost of production divided by the level of output.
d. d. total cost of production multiplied times the level of output.

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