Chapter 13 - True/False

Question 1

Implicit costs are payments for productive resources that the firm already owns

Answer 1

True

Question 2

Expect costs are Payments to hire productive resources at the firm does not own

Answer 2

True

Question 3

The marginal product of an input is the output produced per unit of that input hired

Answer 3

False - marginal product is the additional output produced as a result of hiring one more unit of input

Question 4

Whenever marginal cost is less than average variable cost, average variable cost is falling

Answer 4

True

Question 5

Average fixed cost does not vary with out put

Answer 5

False - average fixed cost always declined as output increases

Question 6

Marginal cost is defined as the additional cost incurred as a result of hiring one more unit of input

Answer 6

False - marginal costs is the extra cost incurred as a result of producing an additional unit of Output

Question 7

The average total cost curve has the most pronounced U shape in the short run

Answer 7

True

Question 8

Average total cost reaches a minimum where it intersects average variable cost

Answer 8

False - average total cost reaches a minimum where intersects marginal cost

Question 9

Diseconomies of scale are caused by problems of coordination and communication that are inherent in large organizations

Answer 9

True

Question 10

If marginal product is negative, out put decreases whenever one more unit of the variable input is hired

Answer 10

True