Question 1

Which of the following is an accurate statement about the envelope relationship?

Accepted Answer

A)  At the planned output level, short-run average total cost equals long-run average cost, but at all other output levels, short-run average total cost is lower than long-run average cost.
B)  At the planned output level, short-run average total cost equals long-run average cost, but at all other output levels, short-run average total cost is higher than long-run average cost.
C)  The long-run average cost curve touches the minimum point of each short-run average total cost curve.
D)  The long-run average cost curve is identical to the lowest short-run average cost curve.E) All of the above
F) A) and B)

Question 2

When the number of mega-producers of hobs that operated at a lower average cost than smaller producers rose, the number of hogs slaughtered rose to record levels. What economic concept does this describe?

Accepted Answer

A)  Economies of scope
B)  Economies of scale
C)  Indivisible setup costs
D)  Minimum efficient productionE) B) and C)
F) A) and D)

Question 3

Globalization has made economies of scope:

Accepted Answer

A)  more important to firms because global corporations can segment the production process.
B)  more important to firms because global corporations do not have to segment the production process.
C)  less important to firms because global corporations can segment the production process.
D)  less important to firms because global corporations do not have to segment the production process.E) C) and D)
F) A) and C)

Question 4

The production techniques available to real-world firms are constantly changing because of learning by doing and technological change.

Accepted Answer

A) True 
 B)False

Question 5

Refer to the graph shown. If the firm wants to produce 900 units of output, it should use the plant size represented by: 1. B) SATC2. C) SATC3. D) SATC4." class="answers-bank-image d-inline" rel="preload" >

Accepted Answer

A)  SATC1.
B)  SATC2.
C)  SATC3.
D)  SATC4.E) None of the above
F) All of the above

Question 6

A social entrepreneur's central motivation in creating "for-benefit" corporations is to achieve social, not just economic, ends.

Accepted Answer

A) True 
 B)False

Question 7

The graph shown exhibits diseconomies of scale:

Accepted Answer

A)  in region a.
B)  in region b.
C)  in region c.
D)  over the entire range of output.E) C) and D)
F) B) and C)

Question 8

Which of the following is most likely an example of diseconomies of scale?

Accepted Answer

A)  The per-unit costs on Excel Publishing Company's manuals fell after it received a large order from the government.
B)  Alpha-Beta Inc. raised its price by 10 percent after a 5 percent increase in production costs.
C)  Widget Manufacturing doubled its production by opening a new plant that was identical to its old plant.
D)  The XYZ Co. increased production capacity by 25 percent and experienced a 30 percent increase in its total cost.E) A) and C)
F) A) and B)

Question 9

Generally, as the size of a firm increases:

Accepted Answer

A)  team spirit increases.
B)  marginal productivity rises.
C)  economies of scope fall.
D)  monitoring costs increase.E) B) and C)
F) A) and D)

Question 10

If a firm is operating at the point of tangency between an isoquant and an isocost line, its production is:

Accepted Answer

A)  technically efficient but economically inefficient.
B)  technically inefficient but economically efficient.
C)  both technically and economically efficient.
D)  both technically and economically inefficient.E) A) and B)
F) All of the above

Question 11

A firm's average cost increases as it increases its output by expanding its plant and hiring additional workers (its only inputs to production) . The firm's owner blames the increase in per-unit costs on the law of diminishing marginal productivity. The owner's reasoning is:

Accepted Answer

A)  correct because some inputs are fixed in the long run.
B)  incorrect because economies of scale are present.
C)  correct because marginal productivity must decrease in the short run.
D)  incorrect because all inputs are varied in the example.E) All of the above
F) A) and B)

Question 12

Since capital is relatively scarce in India, the economically efficient method of producing food would probably:

Accepted Answer

A)  be land intensive.
B)  be capital intensive.
C)  not be labor intensive.
D)  not be capital intensive.E) A) and C)
F) B) and C)

Question 13

According to the text, globalization has led to greater U.S. specialization in:

Accepted Answer

A)  marketing.
B)  manufacturing.
C)  farming.
D)  manual labor.E) B) and D)
F) A) and B)

Question 14

Which of the following statements is true?

Accepted Answer

A)  Many different production processes can be economically efficient, but only the method that involves the lowest possible cost is technically efficient.
B)  Many different production processes can be technically efficient, but only the method that involves the lowest possible cost is economically efficient.
C)  There is only one production process that is technically efficient, and this process is also economically efficient.
D)  There are many production processes that are both technically and economically efficient, but only one of these involves the lowest possible cost.E) None of the above
F) B) and D)

Question 15

Refer to the graph shown. A firm that produces 900 units of output using the plant size associated with SATC3 minimizes: 3 minimizes:   A) both long-run and short-run average total cost. B) long-run average total cost only. C) short-run average total cost only. D) neither long-run nor short-run average total cost." class="answers-bank-image d-inline" rel="preload" >

Accepted Answer

A)  both long-run and short-run average total cost.
B)  long-run average total cost only.
C)  short-run average total cost only.
D)  neither long-run nor short-run average total cost.E) All of the above
F) B) and C)

Question 16

As an employee of the Grelb Corporation (a manufacturer of gas powered generators)you have been asked to determine the nature of their long-run cost structure.Some cost data has been collected for you and appears in the table below. $$\begin{array} { | c | c | c | c | c | } 
\hline \text { Quantity of generators } & \text { Total costs of labor } & \text { Total costs of tools } & \text { Total Costs } & \text { Average Total Costs } \
\hline 11 & \$ 192 & \$ 127 & & \
\hline 12 & 200 & 136 & & \
\hline 13 & 206 & 145 & & \
\hline 14 & 210 & 150 & & \
\hline 15 & 220 & 155 & & \
\hline 16 & 240 & 160 & & \
\hline 17 & 255 & 170 & & \
\hline 18 & 280 & 188 & & \
\hline 19 & 320 & 212 & & \
\hline 20 & 365 & 235 & & \
\hline
\end{array}$$ (a)Fill in the missing values in the table.
(b)Determine the range of output levels over which there exists economies and diseconomies of scale.
(c)Graph the firm's average total cost curve and
(d)Describe how your answer to part (b)above relates to the shape of this curve.

Accepted Answer

(a)The completed table:   \[\begin{array}  ...

Question 17

You have decided to produce and market a new basketball sneaker.What decisions do you need to make besides how many shoes to produce?

Accepted Answer

In deciding to introduce a new basketbal...

Question 18

An isocost line is a line that represents combinations of:

Accepted Answer

A)  factors of production that produce equal amounts of output.
B)  factors of production that cost the same amount.
C)  output that can be produced from the same quantity of inputs.
D)  output that can be produced at the same cost.E) B) and C)
F) A) and B)

Question 19

What concept is important in determining the shape of short run cost curves (marginal cost,average cost)but plays no role in determining the shape of long-run cost curves? What are the most important factors in determining the shape of the long-run cost curves? Explain.

Accepted Answer

The dominant concept in determining the ...

Question 20

Why is it that a technically efficient method of producing may not be an economically efficient method of production?

Accepted Answer

Technical efficiency describes a product...

Exam 12: Production and Cost Analysis II

Refer to the graph shown. If the firm wants to produce 900 units of output, it should use the plant size represented by:

Correct Answer
verified

If a firm is operating at the point of tangency between an isoquant and an isocost line, its production is:

Correct Answer
verified

The production techniques available to real-world firms are constantly changing because of learning by doing and technological change.

Correct Answer
verified

According to the text, globalization has led to greater U.S. specialization in:

Correct Answer
verified

A firm's average cost increases as it increases its output by expanding its plant and hiring additional workers (its only inputs to production) . The firm's owner blames the increase in per-unit costs on the law of diminishing marginal productivity. The owner's reasoning is:

Correct Answer
verified

The graph shown exhibits diseconomies of scale:

Correct Answer
verified

Which of the following is most likely an example of diseconomies of scale?

Correct Answer
verified

Generally, as the size of a firm increases:

Correct Answer
verified

An isocost line is a line that represents combinations of:

Correct Answer
verified

Correct Answer
verified
(a)The completed table: \[\begin{array} ...
View Answer

Refer to the graph shown. A firm that produces 900 units of output using the plant size associated with SATC₃ minimizes:

Correct Answer
verified

Why is it that a technically efficient method of producing may not be an economically efficient method of production?

Correct Answer
verified
Technical efficiency describes a product...
View Answer

A social entrepreneur's central motivation in creating "for-benefit" corporations is to achieve social, not just economic, ends.

Correct Answer
verified

When the number of mega-producers of hobs that operated at a lower average cost than smaller producers rose, the number of hogs slaughtered rose to record levels. What economic concept does this describe?

Correct Answer
verified

Globalization has made economies of scope:

Correct Answer
verified

Which of the following is an accurate statement about the envelope relationship?

Correct Answer
verified

What concept is important in determining the shape of short run cost curves (marginal cost,average cost)but plays no role in determining the shape of long-run cost curves? What are the most important factors in determining the shape of the long-run cost curves? Explain.

Correct Answer
verified
The dominant concept in determining the ...
View Answer

You have decided to produce and market a new basketball sneaker.What decisions do you need to make besides how many shoes to produce?

Correct Answer
verified
In deciding to introduce a new basketbal...
View Answer

Since capital is relatively scarce in India, the economically efficient method of producing food would probably:

Correct Answer
verified

Which of the following statements is true?

Correct Answer
verified

Exam 12: Production and Cost Analysis II

Refer to the graph shown. If the firm wants to produce 900 units of output, it should use the plant size represented by:

Correct AnswerverifiedShow Answer

If a firm is operating at the point of tangency between an isoquant and an isocost line, its production is:

Correct AnswerverifiedShow Answer

The production techniques available to real-world firms are constantly changing because of learning by doing and technological change.

Correct AnswerverifiedShow Answer

According to the text, globalization has led to greater U.S. specialization in:

Correct AnswerverifiedShow Answer

A firm's average cost increases as it increases its output by expanding its plant and hiring additional workers (its only inputs to production) . The firm's owner blames the increase in per-unit costs on the law of diminishing marginal productivity. The owner's reasoning is:

Correct AnswerverifiedShow Answer

The graph shown exhibits diseconomies of scale:

Correct AnswerverifiedShow Answer

Which of the following is most likely an example of diseconomies of scale?

Correct AnswerverifiedShow Answer

Generally, as the size of a firm increases:

Correct AnswerverifiedShow Answer

An isocost line is a line that represents combinations of:

Correct AnswerverifiedShow Answer

Correct Answerverified (a)The completed table: \[\begin{array} ...View AnswerShow Answer

Refer to the graph shown. A firm that produces 900 units of output using the plant size associated with SATC3 minimizes:

Correct AnswerverifiedShow Answer

Why is it that a technically efficient method of producing may not be an economically efficient method of production?

Correct AnswerverifiedTechnical efficiency describes a product...View AnswerShow Answer

A social entrepreneur's central motivation in creating "for-benefit" corporations is to achieve social, not just economic, ends.

Correct AnswerverifiedShow Answer

When the number of mega-producers of hobs that operated at a lower average cost than smaller producers rose, the number of hogs slaughtered rose to record levels. What economic concept does this describe?

Correct AnswerverifiedShow Answer

Globalization has made economies of scope:

Correct AnswerverifiedShow Answer

Which of the following is an accurate statement about the envelope relationship?

Correct AnswerverifiedShow Answer

What concept is important in determining the shape of short run cost curves (marginal cost,average cost)but plays no role in determining the shape of long-run cost curves? What are the most important factors in determining the shape of the long-run cost curves? Explain.

Correct AnswerverifiedThe dominant concept in determining the ...View AnswerShow Answer

You have decided to produce and market a new basketball sneaker.What decisions do you need to make besides how many shoes to produce?

Correct AnswerverifiedIn deciding to introduce a new basketbal...View AnswerShow Answer

Since capital is relatively scarce in India, the economically efficient method of producing food would probably:

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
(a)The completed table: \[\begin{array} ...
View Answer

Refer to the graph shown. A firm that produces 900 units of output using the plant size associated with SATC₃ minimizes:

Correct Answer
verified

Correct Answer
verified
Technical efficiency describes a product...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The dominant concept in determining the ...
View Answer

Correct Answer
verified
In deciding to introduce a new basketbal...
View Answer

Correct Answer
verified

Correct Answer
verified