Question 1

Use the table below to answer the following question.
Table 10.2.4
 
-Refer to Table 10.2.4.The table gives the total product schedule of workers who harvest corn.Diminishing marginal returns begin when the ________ is hired.
A)1st labourer
B)2nd labourer
C)3rd labourer
D)4th labourer
E)There are no diminishing marginal returns since total product always rises.

Accepted Answer

Diminishing marginal returns occur when the addition of an extra unit of labor results in a smaller increase in output than the previous unit added. This typically happens when there is a fixed amount of another factor (like land or machinery). In this case, it starts with the 4th laborer, as indicated by a decrease in the rate of increase in total product compared to when the 3rd laborer was added.

Question 2

Which one of the following statements is correct?
A)When marginal product is increasing,average product is decreasing.
B)When average product is less than zero,marginal product is positive.
C)When marginal product is increasing and greater than average product,average product is increasing.
D)When marginal product is zero,total product is at its minimum.
E)When average product exceeds marginal product,marginal product is increasing.

Accepted Answer

When marginal product is increasing and greater than average product, it means that the additional unit of input is adding more output than the average, causing the overall average product to increase. Therefore, statement (C) is correct. None of the other statements are true in general.

Question 3

The average product of labour equals
A)the slope of the total product curve.
B)the slope of the marginal product curve.
C)the increase in total product divided by the increase in labour employed.
D)total product divided by the quantity of labour employed.
E)the difference between the total product and the marginal product of labour.

Accepted Answer

The average product of labour is calculated by dividing the total product by the quantity of labour employed. Therefore, option D is the correct choice.

Question 4

Suppose the marginal product of energy equals the average product of energy.This implies that
A)marginal product is negative.
B)average product is at its maximum value.
C)marginal product is at its maximum value.
D)the marginal product curve is upward sloping.
E)average product is at its minimum value.

Accepted Answer

When the marginal product of energy equals the average product of energy, it means that the additional unit of energy added is contributing the same amount of output as the average energy input. This implies that the average product of energy is at its maximum value.

Question 5

Which of the following quotes best illustrates the idea of average product?
A)"If I have 10 workers on my assembly line,I can produce 13 tables a day."
B)"If I add an 11th worker,I can produce 1 extra table a day."
C)"Each worker produces 2 tables a day."
D)"I find if I add an extra shift at night,table production only rises by 80 percent because I need more maintenance time on the assembly line."
E)"If I double workers and double the assembly line,I can make 120 percent more tables."

Accepted Answer

The quote "Each worker produces 2 tables a day" directly relates to the concept of average product, which measures the amount of output produced per unit of input (in this case, the amount of tables produced per worker).

Question 6

Which of the following are correct? According to the law of diminishing returns, (1)marginal product eventually rises.
(2)marginal product eventually falls.
(3)marginal cost eventually rises.
(4)marginal cost eventually falls.
A)(1)and (3)
B)(1)and (4)
C)(2)and (3)
D)(2)and (4)
E)(4)

Accepted Answer

According to the law of diminishing returns, as more units of a variable input are added to a fixed input, the marginal product of the variable input will eventually fall. This means that choice (2) is correct. Additionally, as more units of a variable input are added, the total costs will eventually increase at a faster rate than the total output, leading to an increase in marginal costs. Therefore, choice (3) is also correct. Choices (1) and (4) are incorrect as they do not align with the law of diminishing returns.

Question 7

At that amount of output where diminishing marginal returns first sets in,
A)average product begins to decrease.
B)total product begins to decrease.
C)marginal cost begins to decrease.
D)marginal product begins to decrease.
E)average product is at its maximum.

Accepted Answer

Diminishing marginal returns refers to the point at which adding an additional unit of input (such as labor or capital) results in a smaller increase in output. This means that marginal product, the additional output produced by one additional unit of input, begins to decrease. Therefore, choice D is the best answer. Average product, total product, and marginal cost may also be affected by diminishing marginal returns, but they are not the first to be impacted. Additionally, it is not necessarily true that average product is at its maximum at this point.

Question 8

Use the table below to answer the following questions.
Table 10.3.1 
-Refer to Table 10.3.1,which gives Tania's Teapots' total cost schedule.The average total cost of producing 16 teapots per day is
A)$2.
B)$5.
C)$3.33.
D)$7.50.
E)$5.51.

Accepted Answer

The answer of Use the table below to answer the...

Question 9

Use the table below to answer the following questions.
Table 10.3.1 
-Refer to Table 10.3.1,which gives Tania's Teapots' total cost schedule.The average fixed cost of producing 9 teapots per day is
A)$2.22.
B)$1.25.
C)$10.00.
D)$1.11.
E)$1.54.

Accepted Answer

The answer of Use the table below to answer the...

Question 10

Which of the following quotes best illustrates the idea of total product?
A)"If I have 10 workers on my assembly line,I can produce 13 tables a day."
B)"If I add an 11th worker,I can produce 1 extra table a day."
C)"Each worker produces 2 tables a day."
D)"I find if I add an extra shift at night,table production only rises by 80 percent because I need more maintenance time on the assembly line."
E)"If I double workers and double the assembly line,I can make 120 percent more tables."

Accepted Answer

Total product refers to the total output produced by a firm with a given amount of inputs. Choice A directly relates to the concept by specifying the total number of tables produced per day with a specific number of workers, illustrating the total product concept.

Question 11

If capital is a variable input in a production process,the law of diminishing marginal returns implies that
A)total product is minimized.
B)capital's marginal product is positive and less than one.
C)total product is maximized.
D)marginal product of capital eventually decreases.
E)marginal product of capital is constant.

Accepted Answer

The law of diminishing marginal returns states that as a variable input (such as capital) is added to a fixed input (such as labor), eventually the marginal product of the variable input will decrease. This means that each additional unit of capital will produce less and less output, eventually leading to a decrease in total product. Therefore, the correct choice is D.

Question 12

Use the table below to answer the following questions.
Table 10.3.1 
-Refer to Table 10.3.1,which gives Tania's Teapots' total cost schedule.When output increases from 4 to 9 teapots,the marginal cost of one of the 5 teapots is
A)$4.25.
B)$4.
C)$25.
D)$6.25.
E)$5.

Accepted Answer

The marginal cost is calculated by the change in total cost divided by the change in quantity. If the total cost for 4 teapots is $20 and for 9 teapots is $45, the marginal cost for one teapot is ($45-$20)/(9-4) = $5.

Question 13

If energy (E)is the only input used to produce output (Q),what is the formula for average product of energy?
A)ΔQ/ΔE
B)Q/E
C)ΔE/ΔQ
D)E/Q
E)Q ∗ E

Accepted Answer

The average product of energy is calculated by dividing the total output (Q) by the total input of energy (E), hence the formula is Q/E.

Question 14

Which of the following statements by a restaurant owner refers to the law of diminishing returns?
A)"The higher the quality of the ingredients we use,the higher the cost of producing each meal."
B)"If we double the size of our premises and double everything else - kitchen staff,serving staff,equipment - we can increase the number of meals we serve,but not to double the current levels."
C)"We can increase the number of meals we serve by just adding more kitchen staff,but each additional worker adds less meals than the previous worker because traffic in the kitchen will get worse."
D)"We can serve the same number of meals with fewer kitchen staff,but we would have to buy more labour-saving kitchen equipment."
E)"We can serve the same number of meals with less kitchen equipment,but we would have to hire more kitchen staff."

Accepted Answer

The law of diminishing returns refers to the point at which the addition of an input (such as labor, equipment, or ingredients) results in a decreasing marginal output (or decreasing returns). Statement C refers to this concept as each additional kitchen staff adds less meals than the previous worker due to the worsening kitchen traffic.

Question 15

If energy (E)is the only input used to produce output (Q),what is the formula for marginal product of energy?
A)Q ∗ E
B)Q/E
C)ΔQ/ΔE
D)ΔE/ΔQ
E)E/Q

Accepted Answer

The formula for marginal product is the change in output (ΔQ) divided by the change in input (ΔE). In calculus terms, this is represented as dQ/dE. However, since this question only provides discrete values, we can use the formula ΔQ/ΔE to calculate the marginal product of energy.

Question 16

Which of the following quotes best illustrates the idea of marginal product?
A)"If I have 10 workers on my assembly line,I can produce 13 tables a day."
B)"If I add an 11th worker,I can produce 1 extra table a day."
C)"Each worker produces 2 tables a day."
D)"I find if I add an extra shift at night,table production only rises by 80 percent because I need more maintenance time on the assembly line."
E)"If I double workers and double the assembly line,I can make 120 percent more tables."

Accepted Answer

Marginal product refers to the additional output produced by one additional unit of input, while keeping all other inputs constant. Choice B best illustrates this idea as it shows that adding one more worker (the additional input) results in an increase in output by one extra table (the additional output).

Question 17

If the marginal product of the fifth worker is 34,then the total product of five workers
A)is 35.
B)is 24.
C)is 170.
D)is 6.8.
E)cannot be calculated with the information given.

Accepted Answer

The marginal product of a worker refers to the additional output produced by that worker. Without knowing the total product of the previous four workers, we cannot determine the total product of five workers.

Question 18

The total output produced with any quantity of labour is equal to the sum of the
A)average products of each of the workers hired.
B)marginal costs of each of the workers hired.
C)marginal products of each of the workers hired.
D)average costs of each of the workers hired.
E)fixed products of each of the workers hired.

Accepted Answer

The total output produced with any quantity of labour is equal to the sum of the marginal products of each of the workers hired. This is known as the law of diminishing returns, which states that as more units of a variable input, such as labor, are added to a fixed input, such as capital, the marginal product of that variable input will eventually decrease.

Question 19

Choose the correct statement.
A)When marginal product of labour is greater than average product of labour and marginal product is either increasing or decreasing average product of labour is increasing.
B)When total product is increasing average product of labour and marginal product of labour are both increasing.
C)When marginal product of labour is greater than or equal to average product of labour,average product of labour is increasing.
D)When marginal product of labour is increasing,average product of labour is greater than marginal product of labour.
E)When total product is increasing,average product of labour is decreasing and marginal product of labour is increasing.

Accepted Answer

The answer of Choose the correct statement.
A)When marginal product of...

Question 20

The average product of labour is
A)the inverse of the average product of capital.
B)the slope of the marginal product of labour curve.
C)the slope of the total product curve.
D)greater than the marginal product of labour.
E)calculated as total product divided by the total quantity of labour employed.

Accepted Answer

The average product of labour is calculated by dividing the total product (output) by the total quantity of labour employed. It gives the average output per unit of labour. Therefore, option E is the correct choice. Option A is incorrect because there is no direct relationship between the average product of labour and the average product of capital. Option B is incorrect because the slope of the marginal product of labour curve gives the marginal product of labour, not the average product of labour. Option C is incorrect because the slope of the total product curve gives the marginal product of labour, not the average product of labour. Option D is incorrect because the marginal product of labour is always greater than the average product of labour, due to the law of diminishing marginal returns.

Quiz 10: Output and Costs

Use the table below to answer the following question. Table 10.2.4 -Refer to Table 10.2.4.The table gives the total product schedule of workers who harvest corn.Diminishing marginal returns begin when the ________ is hired.

Which one of the following statements is correct?

The average product of labour equals

Suppose the marginal product of energy equals the average product of energy.This implies that

Which of the following quotes best illustrates the idea of average product?

Which of the following are correct? According to the law of diminishing returns, (1) marginal product eventually rises. (2) marginal product eventually falls. (3) marginal cost eventually rises. (4) marginal cost eventually falls.

At that amount of output where diminishing marginal returns first sets in,

Use the table below to answer the following questions. Table 10.3.1 -Refer to Table 10.3.1,which gives Tania's Teapots' total cost schedule.The average total cost of producing 16 teapots per day is

Use the table below to answer the following questions. Table 10.3.1 -Refer to Table 10.3.1,which gives Tania's Teapots' total cost schedule.The average fixed cost of producing 9 teapots per day is

Which of the following quotes best illustrates the idea of total product?

If capital is a variable input in a production process,the law of diminishing marginal returns implies that

Use the table below to answer the following questions. Table 10.3.1 -Refer to Table 10.3.1,which gives Tania's Teapots' total cost schedule.When output increases from 4 to 9 teapots,the marginal cost of one of the 5 teapots is

If energy (E) is the only input used to produce output (Q) ,what is the formula for average product of energy?

Which of the following statements by a restaurant owner refers to the law of diminishing returns?

If energy (E) is the only input used to produce output (Q) ,what is the formula for marginal product of energy?

Which of the following quotes best illustrates the idea of marginal product?

If the marginal product of the fifth worker is 34,then the total product of five workers

The total output produced with any quantity of labour is equal to the sum of the

Choose the correct statement.

The average product of labour is