Question 1

A difference between the long run and the short run is that:

Accepted Answer

In the short run, there are fixed factors of production that cannot be changed, such as the size of a factory or the amount of land. In the long run, all factors of production are variable, meaning that the firm can adjust its inputs to any level it chooses.

Question 2

The table below shows the number of oranges picked by different pickers. Based on the table, the total output of labor diminishes with the addition of the _____ picker.Table 6-2  ​

Accepted Answer

The answer of The table below shows the number of...

Question 3

The change in total cost resulting from a one-unit increase in production is called:

Accepted Answer

The definition provided in the question matches that of marginal cost, which measures the additional cost incurred when producing an extra unit of output. Therefore, the correct answer is C. A, B, D and E are not relevant to the concept described.

Question 4

The table below shows the number of T-shirts manufactured by different units of labor. Based on the table, diminishing marginal product is first evident with the addition of the _____ workerTable 6-1​

Accepted Answer

The answer of The table below shows the number of...

Question 5

The table below shows how a factory's output varies with the number of workers employed each week. Based on the table, marginal product begins to diminish when the _____ worker is employed.Table 6-3

Accepted Answer

The answer of The table below shows how a factory's...

Question 6

Fixed costs are costs:

Accepted Answer

Fixed costs are costs that do not vary with the level of output. These costs can include things like rent, salaries, and insurance premiums. They are referred to as "fixed" because they remain the same regardless of how much output a firm produces. In contrast, variable costs increase or decrease in proportion to the level of output.

Question 7

The short run is:

Accepted Answer

In the short run, firms are unable to change their scale of production because some inputs (such as capital) are fixed in the short run. Therefore, the firm's output can only be increased or decreased by varying other inputs (such as labor), but the scale of production cannot be changed.

Question 8

The figure below shows how the quantity of bicycles produced per week varies with the number of workers employed per week. Based on the figure, marginal product diminishes when the _____ is hiredFigure 6-1

Accepted Answer

The answer of The figure below shows how the quantity...

Question 9

A firm can produce 840 gallons of paint per day with 6 workers or 910 gallons per day with 7 workers. The marginal product of labor over this range of output, stated in gallons per worker per day, is _____ gallons of paint.

Accepted Answer

The answer of A firm can produce 840 gallons of...

Question 10

The figure below shows how the quantity of bicycles produced per week varies with the number of workers employed per week. Based on the figure, the marginal product of the fifth worker hired each week is _____.Figure 6-1

Accepted Answer

The marginal product of a worker is the additional output that is produced when one more worker is added, while holding all other inputs constant. In this figure, we can see that the marginal product of the first worker is 10 bicycles, the marginal product of the second worker is 20 bicycles (10 more than the previous worker), the marginal product of the third worker is 15 bicycles (5 less than the previous worker), the marginal product of the fourth worker is 10 bicycles (5 less than the previous worker), and the marginal product of the fifth worker is 0 bicycles (the same output as the previous worker). Therefore, the answer is C) 15 bicycles.

Question 11

The marginal product of capital:

Accepted Answer

The marginal product of capital is defined as the increase in output obtained from a one-unit increase in capital, holding other factors constant. Therefore, option B is the correct answer. Option A refers to the marginal cost of capital, option C refers to the marginal revenue, option D refers to the marginal cost of employment, and option E refers to the marginal revenue of employment, which are not the same as the marginal product of capital.

Question 12

Which of the following is most likely to be a variable cost?

Accepted Answer

Variable costs are the costs that vary directly with the level of production or output. Payment for raw materials used in manufacturing goods is a direct variable cost as it increases with the increase in the level of production or output.

Question 13

The table below shows the total number of oranges picked by different pickers. Based on the table, the marginal product of labor diminishes with the addition of the _____ picker.Table 6-2

Accepted Answer

The answer of The table below shows the total number...

Question 14

Which of the following would be considered a variable input in the short run?

Accepted Answer

In the short run, variable inputs are those that can be adjusted quickly in response to changes in production levels. The electricity required for a factory building is a variable input because its usage can be increased or decreased based on the production needs of the moment. Other options represent fixed inputs, which cannot be easily changed in the short run.

Question 15

The figure below shows how the quantity of bicycles produced per week varies with the number of workers employed per week. Based on the figure, if the firm's goal is to maximize weekly output, the firm should employ _____.Figure 6-1

Accepted Answer

From the figure, we see that the output increases steeply up to the fourth worker and then starts to increase at a slower rate beyond that. The firm's goal is to maximize weekly output, so it should employ the number of workers that gives the highest output. Therefore, based on the figure, the firm should employ four workers, as this is where the output is highest.

Question 16

The table below shows how a factory's output varies with the number of workers employed each week. Based on the table, the marginal product of the fifth worker hired is:Table 6-3

Accepted Answer

The marginal product of a worker is the additional output that is produced by hiring one more worker. To find the marginal product of the fifth worker, we need to look at the difference in output between the fourth and fifth workers.

The fourth worker produces 80 units of output, while the fifth worker produces 98 units of output. The marginal product of the fifth worker is therefore:

Marginal product of the fifth worker = 98 - 80 = 18 units of output.

Therefore, the correct answer is D) 18 units of output.

Question 17

The figure below shows the change in the quantity of bicycles produced per week due to changes in the number of workers employed per week. Based on the figure, the marginal product of the second worker is _____.Figure 6-1

Accepted Answer

The marginal product of the second worker is the change in the quantity of output (bicycles produced per week) as a result of hiring one more worker (increasing the number of workers employed from one to two). Looking at the graph, we can see that the quantity of bicycles produced per week increases from 10 to 30 when going from one worker to two workers, resulting in a change of 20 bicycles. Therefore, the marginal product of the second worker is 20 bicycles.

Question 18

The production function describes:

Accepted Answer

The production function shows how inputs such as labor, capital, and materials are combined to produce output. It specifies the quantity of inputs needed to produce a certain level of output.

Question 19

Which of the following is a short run adjustment?

Accepted Answer

Hiring two additional bakers is a short run adjustment as it can be made quickly to meet temporary changes in demand. The other options involve long run adjustments such as new firms entering and leaving industries or building new factories.

Question 20

The long run:

Accepted Answer

In the long run, all inputs, including plant size, can be varied, and there are no fixed costs because firms have enough time to adjust all of their inputs.

Quiz 6: Production and Costs