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.
