Question 1

A farm is able to produce 9,000 pints of strawberries per season on 10 acres. It adds one more acre and is able to produce 12,000 pints per season. The marginal product of land for this farm is:

Accepted Answer

The marginal product of land is the increase in output that results from adding one more unit of land. In this case, the farm adds one more acre and is able to produce an additional 3,000 pints of strawberries (12,000 - 9,000). Therefore, the marginal product of land for this farm is 3,000 pints per acre per year (the additional output produced divided by the additional unit of land). Therefore, choice C is the correct answer.

Question 2

During the short-run period of the production process, a firm will be:

Accepted Answer

During the short-run period, at least one factor of production is fixed and cannot be varied. However, other factors of production can be varied in order to adjust to changes in output or demand. Therefore, choice B is the best answer as it states that some of the factors of production can be varied, which is consistent with the definition of the short-run period.

Question 3

During the course of a week, McDonald's has enough time to hire or layoff workers, but it does not have enough time to expand its kitchen or add an additional seating area. In this situation, McDonald's:

Accepted Answer

The fact that McDonald's can hire or layoff workers, but cannot expand its kitchen or seating area, indicates that it is operating in the short run. This means that it has fixed inputs, such as its kitchen and seating area, and can only vary its variable inputs, such as labor. In the short run, a firm may experience economic losses if the market price is not high enough to cover its total costs, which include both fixed and variable costs. However, the information given in the question does not provide enough detail to determine whether McDonald's is experiencing an economic loss or earning a profit.

Question 4

The short run is a time period such that:

Accepted Answer

The answer of The short run is a time period...

Question 5

Which of the following factors of production is not variable in the long run?

Accepted Answer

In the long run, all factors of production, including the size of the firm's plant, property taxes, and highly trained labor, are considered variable because firms have enough time to adjust all inputs according to their production needs.

Question 6

The increase in total output that results from a unit increase in one unit of a variable input is equal to the input's:

Accepted Answer

The increase in total output resulting from a unit increase in one unit of a variable input is known as the Marginal Product of that input.

Question 7

In the long run, total fixed cost:

Accepted Answer

The answer of In the long run, total fixed cost:
...

Question 8

If two workers can produce 22 units of output, and the addition of a third worker increases output to 30 units, the marginal product of the third worker is

Accepted Answer

The answer of If two workers can produce 22 units...

Question 9

A farm is able to produce 5,000 bushels of peaches per season on 100 acres. Assume it adds one more acre and is able to produce 6,000 bushels per season. The marginal product of the additional acre of land for this farm is:

Accepted Answer

The marginal product of an additional unit of input (in this case, an acre of land) is the additional output that results from using the additional input, holding all other inputs constant.

In this case, the farm is able to produce 5,000 bushels of peaches per season on 100 acres. So the average yield per acre is 5,000/100 = 50 bushels per acre per season.

When the farm adds one more acre of land, it is able to produce an additional 1,000 bushels (6,000 - 5,000) per season, holding all other inputs constant. Therefore, the marginal product of the additional acre of land is 1,000 bushels per acre per season. This means that adding one more acre of land will result in an additional 1,000 bushels of output per year.

Question 10

A farm is able to produce 10,000 bushels of peanuts per season on 10 acres. Assume it adds one more acre and is able to produce 12,000 bushels per season. The marginal product of the additional acre of land for this farm is:

Accepted Answer

The answer of A farm is able to produce 10,000...

Question 11

The short run is a period of time:

Accepted Answer

The short run is defined as a period of time in which at least one input is fixed. This means that the firm cannot adjust its production capacity (i.e. plant size) in the short run, and must operate using its existing resources. There is no specific time frame associated with the short run, as it can vary depending on the industry and the type of input that is fixed.

Question 12

A farm can produce 10,000 bushels of wheat per year with 5 workers and 13,000 bushels with 6 workers. The marginal product of the sixth worker for this farm is:

Accepted Answer

The marginal product of the sixth worker is the additional output produced by adding one more worker. 
Therefore, marginal product of the sixth worker = Total output with 6 workers – Total output with 5 workers 
= 13,000 bushels – 10,000 bushels 
= 3,000 bushels.

Question 13

The long run is a period of time:

Accepted Answer

The long run is a period of time that is long enough to permit changes in all the firm's inputs, both fixed and variable. This means that the firm can adjust its plant size as well as other inputs, such as labor and technology, in the long run. Choices A, C, and D are either too specific (choice A) or too general (choices C and D) to be considered the definition of the long run.

Question 14

Which of the following statements is true ?

Accepted Answer

All the statements are true: Economic profit considers implicit costs, the short run has at least one fixed input, a fixed input's quantity cannot change in the short run, and in the long run, all costs are variable.

Question 15

If the units of variable input in a production process are 1, 2, 3, 4, and 5, and the corresponding total outputs are 30, 34, 37, 39, and 40, respectively. The marginal product of the fourth unit is:

Accepted Answer

The answer of If the units of variable input in...

Question 16

The long run is a period of:

Accepted Answer

The long run is a period of time in which a firm can alter its plant size and capacity and all other factors of production, including hiring additional workers. This allows the firm to fully adjust its production process and inputs to achieve optimal efficiency and output levels.

Question 17

During the short run, a firm has enough time to adjust:

Accepted Answer

In the short run, a firm can only adjust its variable inputs, as fixed inputs are not easily changed. The short run is a period of time in which at least one input is fixed and cannot be changed, whereas variable inputs can be changed or adjusted. Therefore, the correct choice is C, as the firm can adjust its variable inputs in the short run.

Question 18

A firm can produce 450 gallons of milk per day with 4 workers and 500 gallons per day with 5 workers. The marginal product of the fifth worker expressed in gallons per worker per day, is:

Accepted Answer

To calculate the marginal product of the fifth worker, we can use the following formula:

Marginal Product = (Total Product with n workers) - (Total Product with n-1 workers)

In this case, the marginal product of the fifth worker is:

Marginal Product = 500 - 450 = 50

Therefore, the answer is B.

Question 19

Which of the following best describes a production function?

Accepted Answer

A production function describes the maximum amount of output that a firm can produce with various quantities of inputs, such as labor and capital. It shows the relationship between input factors and the quantity of output that can be produced given those inputs.

Question 20

The long run is a planning period:

Accepted Answer

The long run is a period during which the firm can vary all inputs, including its plant size. It is typically a time frame of more than one year, during which a company can adjust its physical production capacity, alter its product mix, and make other essential changes in its operations. Thus, option A is the best choice as it correctly defines the long run planning period.

Quiz 6: Production Costs