Question 1

In economics, the short run is:

Accepted Answer

In economics, the short run is a period of time in which a firm can vary its output but not its plant capacity. This means that in the short run, a firm can adjust its level of production by changing the amount of labor or other variable inputs, but it cannot build a new factory or expand its existing one. The length of the short run varies depending on the industry and the firm, but it is typically a few months to a year. Therefore, option C is the best choice.

Question 2

Diminishing returns to an input occur:

Accepted Answer

Diminishing returns occur when some inputs are fixed and some are variable. As more and more of the variable input is added to the fixed input, the marginal product of the variable input eventually starts to decrease. This is known as the law of diminishing marginal returns.

Question 3

In economics, the short run is defined as:

Accepted Answer

The short run is defined as the period of time in which some inputs are considered to be fixed in quantity, meaning that they cannot be easily adjusted. This is in contrast to the long run, where all inputs can be adjusted. The length of the short run is not strictly defined by a specific time frame, but rather by the presence of fixed inputs.

Question 4

Use the following to answer questions: 
-(Figure: Marginal Product of Labor) Look at the figure The Marginal Product of Labor. The total product for three workers is _____ bushels.

Accepted Answer

The total product for three workers is 51 bushels. This is the sum of the marginal products of labor for the first, second, and third workers, which are 15, 18, and 18, respectively.

Question 5

A _____ is an organization that produces goods or services for sale.

Accepted Answer

A firm is defined as an organization that produces goods or services for sale. A production function refers to the technology and methods used to produce these goods or services. Variable inputs are resources such as labor or materials that can be changed in quantity in the short run, while fixed inputs such as machinery or buildings cannot be easily changed in quantity in the short run.

Question 6

If two firms are identical in all respects except that one has more of the fixed input capital than another, the total product curve for the firm with more capital:

Accepted Answer

When one firm has more of the fixed input capital than another identical firm, it is likely to have higher productivity and hence its total product curve will lie above the total product curve of the firm with less capital. This is because more capital tends to increase efficiency and reduce costs, leading to higher output levels.

Question 7

The total product curve:

Accepted Answer

The total product curve becomes flatter as output increases due to diminishing returns, meaning each additional unit of input contributes less to output.

Question 8

A fixed input is one:

Accepted Answer

A fixed input is one whose quantity cannot be changed in the short run, meaning it remains constant regardless of the level of output.

Question 9

In the short run:

Accepted Answer

In the short run, some inputs are fixed (such as capital equipment) while others are variable (such as labor). This means that a firm can adjust its variable inputs to some extent, but cannot change its fixed inputs. Therefore, the best choice is C.

Question 10

An input whose quantity CANNOT be changed in the short run is:

Accepted Answer

A fixed input is one whose quantity cannot be changed in the short run, regardless of changes in output levels or prices. Examples of fixed inputs include land, buildings, and equipment, as these resources are not easily or quickly changed in amount.

Question 11

Use the following to answer questions: 
-(Figure: Marginal Product of Labor) Look at the figure The Marginal Product of Labor. The total product of labor for eight workers is _____ bushels.

Accepted Answer

The total product of labor is the sum of the marginal products of each worker. If the marginal product of labor for eight workers adds up to 96 bushels, then that is the total product.

Question 12

The long run is a planning period:

Accepted Answer

In the long run, all inputs are variable, allowing firms to adjust all factors of production.

Question 13

In the long run:

Accepted Answer

In the long run, all inputs are considered variable, allowing firms to adjust all factors of production according to their needs and market conditions. This contrasts with the short run, where at least one input is fixed.

Question 14

Lauren has 11 people working in her tangerine grove. The marginal product of the eleventh worker is 13 bushels of tangerines. If she hires a twelfth worker, the marginal product of that worker will be:

Accepted Answer

The marginal product of the twelfth worker cannot be determined with the information given, as it depends on factors such as diminishing returns and other conditions in the grove.

Question 15

Use the following to answer questions: 
-(Figure: Marginal Product of Labor) Look at the figure The Marginal Product of Labor. The total product of labor for five workers is _____ bushels.

Accepted Answer

The answer of Use the following to answer questions: 
-(Figure:...

Question 16

The _____ is the increase in output that is produced when a firm hires an additional worker.

Accepted Answer

Marginal product is the increase in output that is produced when a firm hires an additional worker. Option A (average product) is the average amount of output produced by each unit of input, option B (total product) is the total amount of output produced by a firm, and option D (marginal cost) is the additional cost of producing one more unit of output.

Question 17

The term diminishing returns refers to:

Accepted Answer

Diminishing returns occur when adding an additional unit of a variable input, like labor, results in a smaller increase in output, assuming all other inputs are constant.

Question 18

An input whose quantity can be changed in the short run is a(n) _____ input.

Accepted Answer

In economics, a variable input is an input whose quantity can be easily changed in the short run. Therefore, the best choice is D – variable input.

Question 19

The idea of diminishing returns to an input in production suggests that if a local college adds more custodians, the marginal product of labor for the custodial staff will:

Accepted Answer

The answer of The idea of diminishing returns to an...

Question 20

If two firms are identical in all respects except that one has more of the fixed input capital than another, the marginal product curve for the firm with more capital:

Accepted Answer

The law of diminishing marginal returns states that as more of a variable input is added to a fixed input, the marginal product of the variable input will eventually decline. Since both firms are identical except for the amount of fixed input capital, the firm with more capital will be able to support higher levels of the variable input before experiencing diminishing marginal returns. Therefore, the marginal product curve for the firm with more capital will lie above the marginal product curve for the firm with less capital.

Quiz 11: Behind the Supply Curve: Inputs and Costs