Question 1

If a firm builds a larger plant and increases output and if its long-run average total cost does not change,the firm has constant returns to scale.

Accepted Answer

If the long-run average total cost does not change with an increase in output, then the firm has constant returns to scale. This means that doubling inputs will exactly double output, while also keeping the cost per unit constant.

Question 2

A firm's total fixed cost:

Accepted Answer

Total fixed cost remains constant in the short run, regardless of the level of output. This is because fixed costs are costs that do not vary with the level of output.

Question 3

The advantage of specialization in production is one of the primary reasons for decreasing returns to scale.

Accepted Answer

Specialization in production typically leads to increasing returns to scale because it allows for more efficient use of resources, improved skills, and higher productivity, not decreasing returns.

Question 4

A production function that is characterized by economies of scale will not be subject to diminishing returns.

Accepted Answer

A production function that exhibits economies of scale will eventually face diminishing returns as the scale of production increases beyond a certain point. This is because the efficiency gains from economies of scale will eventually be offset by the increasing costs associated with managing larger and more complex operations. As a result, the shape of the production function will eventually become convex, indicating diminishing returns.

Question 5

The production function provides information about:

Accepted Answer

The production function describes the various combinations of inputs (such as labor, capital, and materials) that can be used to produce a given level of output. It shows the transformation of inputs into output, and therefore provides information about a firm's production process. It does not directly provide information about profit level, production location, or market structure.

Question 6

Janet's poodle grooming salon has a total cost curve expressed by the equation TC = 100 + 3Q²,where Q is the quantity of dogs groomed.Janet notices that,as she grooms more dogs,her total cost curve:

Accepted Answer

The presence of the variable Q in the total cost equation indicates that the total cost is dependent on the quantity of dogs groomed. As the quantity of dogs groomed increases, the cost of each additional dog groomed may increase due to the need for additional resources such as time, labor, and supplies. Therefore, the total cost curve will become steeper as more dogs are groomed.

Question 7

(Table: Tonya's Production Function for Apples)Use Table: Tonya's Production Function for Apples.In the short run,Tonya's fixed input(s)is/are:

Accepted Answer

In the short run, Tonya's fixed input is land as it is the only input with a fixed quantity. The amount of labor can be varied in the short run, but the land is fixed at 1 acre.

Question 8

When the long-run average total cost curve is upward sloping as output increases,the firm has diseconomies of scale.

Accepted Answer

When the long-run average total cost curve is upward sloping, it means that as output increases, the firm is experiencing higher average total costs. This indicates that the firm is facing diseconomies of scale, which occur when an increase in output leads to higher per-unit costs.

Question 9

Janet's poodle grooming salon has a total cost curve expressed by the equation TC = 100 + 3Q²,where Q is the quantity of dogs groomed.Given this expression,if Janet grooms five dogs,her total costs will be:

Accepted Answer

To find the total cost for grooming five dogs, substitute Q with 5 in the total cost equation TC = 100 + 3Q. So, TC = 100 + 3(5) = 100 + 15 = $115. However, there seems to be a misunderstanding in the transcription of the choices provided based on the calculation. The correct calculation based on the given formula results in $115, which does not match any of the provided options. Given the options, the closest approach to explaining the correct answer would involve acknowledging a potential error in the transcription of the question or answer choices.

Question 10

Economies of scale most often occur in industries whose initial fixed cost of plant and equipment is low.

Accepted Answer

Economies of scale occur in industries where there are high fixed costs associated with plant and equipment. As production increases, the average fixed cost per unit decreases, leading to lower overall costs and higher efficiency.

Question 11

With one input fixed,a firm will find that as it attempts to produce more,the total product curve increases at a decreasing rate and its marginal product curve is:

Accepted Answer

As the firm attempts to produce more with one input fixed, it will experience diminishing marginal returns, causing the marginal product curve to slope downward. The total product curve will still increase, but at a decreasing rate as the firm approaches the point of diminishing returns.

Question 12

(Table: Tonya's Production Function for Apples)Use Table: Tonya's Production Function for Apples.Tonya is operating:

Accepted Answer

The answer of (Table: Tonya's Production Function for Apples)Use Table:...

Question 13

Diminishing returns are one explanation for diseconomies of scale.

Accepted Answer

The answer of Diminishing returns are one explanation for diseconomies...

Question 14

(Table: Linda's Copy Shop Production)Use Table: Linda's Copy Shop Production.Linda's production runs into diminishing returns to her variable inputs when she employs the _____ unit.

Accepted Answer

The answer of (Table: Linda's Copy Shop Production)Use Table: Linda's...

Question 15

Economies of scale are often the result of increased specialization,which can occur when output levels increase.

Accepted Answer

Economies of scale occur when a business or industry increases its output, which allows for increased specialization, leading to lower costs per unit of production.

Question 16

Janet's poodle grooming salon has a total cost curve expressed by the equation TC = 100 + 3Q²,where Q is the quantity of dogs groomed.Given this expression,Janet is operating in the:

Accepted Answer

The given equation for total cost includes a constant term of $100, which represents fixed costs. Therefore, Janet is operating in the short run, and her fixed costs are $100.

Question 17

(Table: Tonya's Production Function for Apples)Use Table: Tonya's Production Function for Apples.In the short run,Tonya's variable input(s)is/are:

Accepted Answer

In the short run, Tonya's variable input is labor, as the land is fixed and cannot be adjusted in the short run.

Question 18

The level of inputs a firm employs will determine a firm's:

Accepted Answer

The level of inputs a firm employs directly impacts its ability to produce output. The more inputs a firm uses, the more output it can produce, and vice versa. Therefore, increasing inputs can help a firm meet increasing demand and maximize profits. The other options, such as elasticity of demand, stock price, and location of production, may be indirectly affected by input levels but are not directly determined by them.

Question 19

(Table: Tonya's Production Function for Apples)Use Table: Tonya's Production Function for Apples.The marginal product of the fourth worker is _____ apples.

Accepted Answer

The answer of (Table: Tonya's Production Function for Apples)Use Table:...

Question 20

(Table: Tonya's Production Function for Apples)Use Table: Tonya's Production Function for Apples.As she hires more labor,Tonya's production function shows that the number of apples picked increases at a decreasing rate because of:

Accepted Answer

According to the production function, as more labor is hired, the number of apples picked increases at a decreasing rate. This is due to diminishing returns, which means that each additional unit of labor adds less and less to total output.

Quiz 11: Behind the Supply Curve: Inputs and Costs

If a firm builds a larger plant and increases output and if its long-run average total cost does not change,the firm has constant returns to scale.

A firm's total fixed cost:

The advantage of specialization in production is one of the primary reasons for decreasing returns to scale.

A production function that is characterized by economies of scale will not be subject to diminishing returns.

The production function provides information about:

Janet's poodle grooming salon has a total cost curve expressed by the equation TC = 100 + 3Q²,where Q is the quantity of dogs groomed.Janet notices that,as she grooms more dogs,her total cost curve:

(Table: Tonya's Production Function for Apples) Use Table: Tonya's Production Function for Apples.In the short run,Tonya's fixed input(s) is/are:

When the long-run average total cost curve is upward sloping as output increases,the firm has diseconomies of scale.

Janet's poodle grooming salon has a total cost curve expressed by the equation TC = 100 + 3Q²,where Q is the quantity of dogs groomed.Given this expression,if Janet grooms five dogs,her total costs will be:

Economies of scale most often occur in industries whose initial fixed cost of plant and equipment is low.

With one input fixed,a firm will find that as it attempts to produce more,the total product curve increases at a decreasing rate and its marginal product curve is:

(Table: Tonya's Production Function for Apples) Use Table: Tonya's Production Function for Apples.Tonya is operating:

Diminishing returns are one explanation for diseconomies of scale.

(Table: Linda's Copy Shop Production) Use Table: Linda's Copy Shop Production.Linda's production runs into diminishing returns to her variable inputs when she employs the _____ unit.

Economies of scale are often the result of increased specialization,which can occur when output levels increase.

Janet's poodle grooming salon has a total cost curve expressed by the equation TC = 100 + 3Q²,where Q is the quantity of dogs groomed.Given this expression,Janet is operating in the:

(Table: Tonya's Production Function for Apples) Use Table: Tonya's Production Function for Apples.In the short run,Tonya's variable input(s) is/are:

The level of inputs a firm employs will determine a firm's:

(Table: Tonya's Production Function for Apples) Use Table: Tonya's Production Function for Apples.The marginal product of the fourth worker is _____ apples.

(Table: Tonya's Production Function for Apples) Use Table: Tonya's Production Function for Apples.As she hires more labor,Tonya's production function shows that the number of apples picked increases at a decreasing rate because of:

Quiz 11: Behind the Supply Curve: Inputs and Costs

If a firm builds a larger plant and increases output and if its long-run average total cost does not change,the firm has constant returns to scale.

A firm's total fixed cost:

The advantage of specialization in production is one of the primary reasons for decreasing returns to scale.

A production function that is characterized by economies of scale will not be subject to diminishing returns.

The production function provides information about:

Janet's poodle grooming salon has a total cost curve expressed by the equation TC = 100 + 3Q2,where Q is the quantity of dogs groomed.Janet notices that,as she grooms more dogs,her total cost curve:

(Table: Tonya's Production Function for Apples) Use Table: Tonya's Production Function for Apples.In the short run,Tonya's fixed input(s) is/are:

When the long-run average total cost curve is upward sloping as output increases,the firm has diseconomies of scale.

Janet's poodle grooming salon has a total cost curve expressed by the equation TC = 100 + 3Q2,where Q is the quantity of dogs groomed.Given this expression,if Janet grooms five dogs,her total costs will be:

Economies of scale most often occur in industries whose initial fixed cost of plant and equipment is low.

With one input fixed,a firm will find that as it attempts to produce more,the total product curve increases at a decreasing rate and its marginal product curve is:

(Table: Tonya's Production Function for Apples) Use Table: Tonya's Production Function for Apples.Tonya is operating:

Diminishing returns are one explanation for diseconomies of scale.

(Table: Linda's Copy Shop Production) Use Table: Linda's Copy Shop Production.Linda's production runs into diminishing returns to her variable inputs when she employs the _____ unit.

Economies of scale are often the result of increased specialization,which can occur when output levels increase.

Janet's poodle grooming salon has a total cost curve expressed by the equation TC = 100 + 3Q2, where Q is the quantity of dogs groomed.Given this expression,Janet is operating in the:

(Table: Tonya's Production Function for Apples) Use Table: Tonya's Production Function for Apples.In the short run,Tonya's variable input(s) is/are:

The level of inputs a firm employs will determine a firm's:

(Table: Tonya's Production Function for Apples) Use Table: Tonya's Production Function for Apples.The marginal product of the fourth worker is _____ apples.

(Table: Tonya's Production Function for Apples) Use Table: Tonya's Production Function for Apples.As she hires more labor,Tonya's production function shows that the number of apples picked increases at a decreasing rate because of:

Janet's poodle grooming salon has a total cost curve expressed by the equation TC = 100 + 3Q²,where Q is the quantity of dogs groomed.Janet notices that,as she grooms more dogs,her total cost curve:

Janet's poodle grooming salon has a total cost curve expressed by the equation TC = 100 + 3Q²,where Q is the quantity of dogs groomed.Given this expression,if Janet grooms five dogs,her total costs will be:

Janet's poodle grooming salon has a total cost curve expressed by the equation TC = 100 + 3Q²,where Q is the quantity of dogs groomed.Given this expression,Janet is operating in the: