Module 5 Quiz

Question 1

Consider the table above. The missing value ‘A’ in the output column is ______
a) 30
b) 32
c) 34
d) 36

Answer 1

We can find output as the sum of marginal products.

At output Q= 22 we add MP=10 to get Q=32

Question 2

Consider the table above. The missing value ‘B’ in the Marginal Product column is ______
a) 3
b) 5
c) 7
d) 9

Answer 2

7

marginal product is the change in output.

We are going from 2 to 12 so the change in output is 7.

Question 3

Consider the table above. The missing value ‘C’ in the Average Product column is ______
a) 2
b) 4
c) 6
d) 12

Answer 3

Average product is calculated as Q/L.

Q = 12 and L = 2 so AP = 6

Question 4

Consider the table above. Marginal Product reaches a maximum at ______
a) L equals 3 to 4
b) L equals 4 to 5
c) L equals 5 to 6
d) L equals 6 t0 7

Answer 4

L = 4 to 5.

Inspect the table.

MPL rises from 5 to 12 then falls.

Question 5

Consider the table above. Average Product reaches a maximum at ______
e) L equals 3
f) L equals 4
g) L equals 5
h) L equals 6

Answer 5

L equals 5

Inspect table.

APL rises to 8.80 then falls. Notice that, as long as MPL is higher than APL,
then APL will continue to rise.

Question 6

Fill in the table

Answer 6

Question 7

Consider the table above. The Minimum Average Variable Cost occurs at Q =______
a) 2
b) 3
c) 4
d) 5

Answer 7

Q = 5.

AVC falls to 20 then rises thereafter

Question 8

Consider the table above. The Minimum Average Total Cost occurs at Q =______
a) 2
b) 3
c) 4
d) 5

Answer 8

Q = 4 or 5.

AC falls to 22 then rises thereafter

Question 9

Consider the table above. The Minimum Marginal Cost occurs between Q =______ and ___
a) 0, 1
b) 2, 3
c) 4, 5
d) 6, 7

Answer 9

Q = 0.

MC is rising by 5 each time Q rises by 1. So the minimum is at zero

Question 10

Which of the following is true?

a) Average total costs fall because marginal costs are always smaller
b) Average total costs fall whenever marginal costs are smaller
c) Average total costs fall whenever average variable costs are smaller
d) A rise in fixed costs to $50 will raise average variable costs

Answer 10

B: Average total costs fall whenever marginal costs are smaller.

If the marginal is lower, then the average will fall. If the marginal is higher, average will rise.