ECO 204 Week 3 Quiz

1.	Question :	Which of the following always decreases as output increases?

 	Student Answer:		  Fixed cost

 			  Average cost

 		 	  Average fixed cost

 			  Marginal cost

 			  Total cost



 	Points Received:	1 of 1
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Question 2.	Question :	The change in total cost due to producing one more unit of output is called the

 	Student Answer:		  long-run average cost.

 			  short-run average cost.

 			  marginal product.

 			  average variable cost.

 		 	  marginal cost.



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Question 3.	Question :	An example of a horizontally integrated firm is one that

 	Student Answer:		  owns several plants, each handling a different stage of production.

 			  produces a variety of goods and sells them in widely disparate markets.

 		 	  owns several plants, each manufacturing the same product.

 			  owns several plants in the same state.

 			  uses highly automated assembly line techniques.



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Question 4.	Question :	The short run is

 	Student Answer:		  less than six months.

 			  more than six months, but less than a year.

 		 	  in the short run, some productive resources may be fixed although some other resources may be varied.
 			  the period of time in which all the productive resources can be varied.

 		 	  the period of time in which all the inputs are fixed.



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Question 5.	Question :	The short-run marginal cost curve falls and then rises because of

 	Student Answer:		  fixed costs.

 			  diseconomies of scale.

 		 	  diseconomies and economies of scale.

 		 	  the principle of diminishing returns.



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Question 6.	Question :	When the marginal product curve is declining because of

 	Student Answer:		  increasing returns, the marginal cost curve is rising.

 		 	  diminishing returns, the marginal cost curve is rising.

 			  diminishing returns, the marginal cost curve is falling.

 			  diminishing returns, the marginal cost curve is constant.

 			  increasing returns, the marginal cost curve is falling.



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Question 7.	Question :	A firm that owns a car rental agency, a modeling agency, a French bakery, and a pet store is

 	Student Answer:		  horizontally integrated.

 			  vertically integrated.

 			  inefficient.

 			  a perfect competitor.

 		 	  a conglomerate.



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Question 8.	Question :	What is one thing that entrepreneurs do NOT do?

 	Student Answer:		  They identify consumer demands.

 		 	  They establish supply and demand.

 			  They organize production.

 			  They allocate resources.

 			  They acquire assets.



 	Points Received:	1 of 1
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Question 9.	Question :	In the short run,

 	Student Answer:		  all inputs are variable.

 		 	  some inputs are variable and some are fixed.

 			  all inputs are fixed.

 			  the time period cannot exceed one year.



 	Points Received:	1 of 1
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Question 10.	Question :	The technical relationship between inputs and outputs, which is needed to understand the difference between the short run and the long run, is called

 	Student Answer:		  technical efficiency.

 			  economic efficiency.

 		 	  a production function.

 			  a time and motion study.

 			  supply and demand.