test 2 Flashcards
When cost that change with the level of output are divided by the output level, you have calculated marginal cost.
True
False
False
The marginal product of labour is the decrease in total output resulting from the use of one more unit of labour.
True
False
True
Returns to scale are said to be decreasing if output increases less than in proportion to the change in inputs
True
False
True
Diminishing marginal returns is a concept involving
a production function with at least one input held constant
a production function with only one input
proportionate changes in all inputs
a production function with at least one input held constant in the long run
a production function with at least one input held constant
Average Product is the
None of the above
total output divided by the total of an input
change in total output from a change in input
total input divided by the total output
total output divided by the total of an input
Average Product is a change in total input from a change in total output.
True
False
False
Marginal product is
None of the above
a change in total output divided by the output level
a change in total inputs divided by a change in output
a change in total output divided by a one unit change in variable input
a change in total output divided by a one unit change in variable input
The Average Product rises as long as
the marginal product is less than average product
None of the above
the marginal product is greater than average product
The marginal product equals average product
the marginal product is greater than average product
When labour is the variable input, in Stage 2, the marginal product of labour is positive and increasing
True
False
False
In Stage 3 of production, the marginal product of labour is negative.
True
False
True
When average variable cost is declining, marginal cost
must be rising and above average variable cost
must be rising and below average variable cost
None of the above
must be above average variable cost
None of the above
Minimum marginal cost occurs at the output rate where the first derivative of the marginal cost is zero.
True
False
True
If average cost is increasing as quantity is increasing, then average cost is less than marginal cost.
True
False
True
