ECON- Chapter 5 Flashcards
An investment in human and nonhuman capital will result in
-an increase in marginal costs.
-an increase in the marginal physical product of labor.
-a decrease in the production function.
-a decrease in production possibilities.
an increase in the marginal physical product of labor.
Land, labor, capital, and entrepreneurship are called
-factors of production.
-fixed costs.
-variable costs.
-factors of demand.
factors of production.
Advances in managerial knowledge shift the production function
-downward and the marginal cost curve upward.
-upward and the average total cost curve downward.
-and the marginal cost curve upward.
-and the average total cost curve downward.
upward and the average total cost curve downward.
Which of the following is a possible way to increase productivity?
-increased capital investment
-greater levels of education
-All of these choices are correct.
-vocational training
All of these choices are correct.
Which of the following would cause a firm’s production function to shift upward?
-increased investment in capital
-an increase in wages
-hiring more workers
-an increase in production by the firm
increased investment in capital
If more of an input factor is used, while holding other inputs constant, a firm will eventually experience
-diminishing returns.
-falling marginal cost.
-rising consumer demand.
-rising marginal physical product.
diminishing returns.
The law of diminishing returns means that
-total product will eventually increase at a decreasing rate as more inputs are employed
-average fixed cost will fall as production increases.
-average total costs are rising and then falling as output is increased.
-the marginal product will increase at an increasing rate.
total product will eventually increase at a decreasing rate as more inputs are employed
Which of these statements about variable costs is incorrect?
-variable costs occur even when there is no output.
-Variable costs increase as output increases.
-Variable costs are equal to total costs minus fixed costs.
-Variable costs are equal to total costs minus fixed costs.
Variable costs occur even when there is no output.
Variable costs occur even when there is no output.
-Equipment loan payments
-Vehicle fleet loan payments
-Mortgage payment for owned plant facilities
-Labor and raw materials costs
Labor and raw materials costs
When producing jeans, which of the following are not a variable cost in the short run?
-rent paid for the use of a factory
-wage payments to labor
-denim material costs for each jean
-zipper costs for each jean
rent paid for the use of a factory
Production Costs
Quantity (units) Fixed Cost ($) Variable Cost ($) Total Cost ($) Marginal Cost ($/unit)
0 _________blank _________blank 10 _________blank
1 _________blank _________blank 19 _________blank
2 _________blank _________blank _________blank 3
3 _________blank 15 _________blank _________blank
According to the Production Costs table, the variable cost of the first unit is
-$29.
-$9.
-$19.
-$10.
$9.
Total revenue minus total cost equals
-profit.
-economic costs.
-marginal revenue.
-variable costs.
profit
It is impossible to
-avoid fixed costs in the short run.
-identify variable costs in the short run.
-identify variable costs in the long run.
-determine total costs in the short run.
avoid fixed costs in the short run.
The sum of fixed cost and variable cost at any rate of output is equal to
-average total cost.
-marginal cost.
-total cost.
-total profit.
total cost.
the investment decision involves
-All of these choices are correct.
-the decision to enter or exit an industry.
-decisions in the long run.
-the decision to buy or lease plants or equipment.
All of these choices are correct.
The planning period over which at least one resource input is fixed in quantity is the
-production run.
-short run.
-long run.
-investment decision.
short run.
Which of the following is not a long-run investment decision?
-whether to buy or lease equipment
-how intensively to use the existing plant
-whether or not to enter into the industry
-the size of the factory
how intensively to use the existing plant
During the long run
-the firm can build or lease any size factory.
-some inputs are fixed and some are variable.
-some inputs are fixed and some are variable.
-output is limited by the law of diminishing returns.
the firm can build or lease any size factory.
Economic costs are greater than accounting costs
-only in the long run.
-only if implicit costs are greater than zero.
-in the short run but not the long run.
-only if explicit costs are greater than implicit costs.
only if implicit costs are greater than zero.
Economic profit equals
-total revenue minus explicit and implicit costs.
-total revenue minus implicit costs.
-total revenue minus the difference between explicit and implicit costs.
-total revenue minus explicit cost
total revenue minus explicit and implicit costs.
