ECON 201 Week 5 Quiz

ECON 201 Week 5 Quiz | american-public-university-system

Question 1                         

Average variable cost is:

·         the firm's variable cost per unit multiplied by the quantity.

·         total variable cost divided by quantity.

·         the difference between average total cost and total variable cost.

·         the difference between total cost and total variable cost.

Question 2                         

Which of the following is (are) correct?

·         Firms are organizations that produce goods and services.

·         Firms seek to maximize profits.

·         Firms seek to utilize factors of production in the most efficient way in order to maximize profits.

·         All of the above are correct.

Question 3                         

For a restaurant:

·         labor and food would be variable factors of production.

·         a building would be a fixed factor of production in the short run.

·         fire insurance on a building would be a fixed factor of production.

·         A and B are correct.

Question 4                         

Diminishing marginal returns means that:

·         each additional unit of an input used will decrease output.

·         each additional unit of an input used will increase output, but by smaller and smaller amounts.

·         each additional unit of an input used will increase output by larger and larger amounts.

·         the firm is maximizing profit.

Question 5                         

When marginal cost is below average variable cost, average variable cost must be:

·         at its minimum.

·         at its maximum.

·         falling.

·         rising.

Question 6                         

If a firm produces 10 units of output and incurs $30 in average variable cost and $5 in average fixed cost, average total cost is:

Question options:

·         $30.

·         $35.

·         $50.

·         $300.

Question 7                         

In the long run:

·         all inputs are fixed.

·         inputs are neither variable nor fixed.

·         at least one input is variable and one input is fixed.

·         all inputs are variable.

Question 8                         

A factor of production whose quantity can be changed during a particular period is a:

·         marginal factor of production.

·         fixed factor of production.

·         incremental factor of production.

·         variable factor of production.

Question 9                         

Given constant quantities of all other factors of production, when additional units of a variable factor of production add less and less to total output, then the firm is experiencing:

·         constant marginal returns.

·         increasing marginal returns.

·         diminishing marginal returns.

·         negative marginal returns.

Question 10                      

The sum of fixed and variable costs is:

·         total cost.

·         marginal cost.

·         variable cost.

·         average cost.

·         Costs of Producing Bagels

Question 11                      

(Exhibit: Costs of Producing Bagels) The total cost of producing six bagels is:

·         $0.10.

·         $0.20.

·         $0.80.

·         $0.90.

Question 12                      

(Exhibit: Costs of Producing Bagels) The average total cost of producing six bagels is:

·         $0.10.

·         $0.15.

·         $0.20.

·         $0.80.

Question 13                      

(Exhibit: Costs of Producing Bagels) The marginal cost of producing the sixth bagel is:

·         $0.10.

·         $0.15.

·         $0.20.

·         $0.80.

Question 14                       

 (Exhibit: Costs of Producing Bagels) The total cost of producing two bagels is:

·         $0.10.

·         $0.20.

·         $0.40.

·         $0.50.

·         Short-Run Costs

Question 15                      

(Exhibit: Short-Run Costs) Curve A is the _______ cost curve.

·         average total

·         average variable

·         marginal

·         total

Question 16                      

(Exhibit: Short-Run Costs) Curve B is the _______ cost curve.

·         average total

·         average variable

·         marginal

·         total

Question 17                      

(Exhibit: Short-Run Costs) Curve A crosses the average variable cost curve at:

·         approximately 2.8 units of output.

·         approximately 5.3 units of output.

·         the minimum value of curve B.

·         the level of output where diminishing marginal returns begin.

Question 18                      

 (Exhibit: Short-Run Costs) Curve A crosses the average total cost curve at:

·         the minimum value of Curve B.

·         approximately 4.3 units of output.

·         approximately 2.8 units of output.

·         none of the above points.

Question 19                      

(Exhibit: Short-Run Costs) Curve A declines from a cost of about $50 and a quantity of 1 to a cost of about $40 and a quantity of 2 (point F) at which time it rises again. The declining segment is due to ________ marginal returns, and the rising segment is due to _______ marginal returns.

·         decreasing; increasing

·         diminishing; increasing

·         increasing; diminishing

·         increasing; constant

Question 20                      

(Exhibit: Short-Run Costs) At 7 units of output, average fixed cost is approximately _______ , and average variable cost is approximately _______ .

·         $100; $100

·         $10; $135

·         $40; $ 100

·         $140; $140