1/A firm becomes more capital intensive if it increases the ratio of capital to

Question

1/A firm becomes more capital intensive if it increases the ratio of capital to labor.
a/True
b/False
1/ In the first of the three ranges of production:

the total product curve has a decreasing slope.

the marginal product curve has a positive slope.

the marginal product curve intersects the total product curve.

marginal product is negative.




At any one time:

a firm must make only short-run or long-run decisions.

a firm will be making both short-run and long-run decisions.

the firm will find it most efficient to make only short-run decisions.

the firm will make only long-run decisions.


1.

If you employ 20 workers in the production of picture frames, the way to determine the quantity of output these workers can produce is through a(n):


profit function.

indifference curve.

budget constraint.

total product curve.


1.
Given constant quantities of all other factors, when additional units of a variable factor of production reduce total output, the firm is experiencing:
Answer
Question 7 answers

constant marginal returns.

increasing marginal returns.

diminishing marginal returns.

negative marginal returns.


If marginal product is less than average product, average product must be falling.
Answer
Question 8 answers
True
False


A firm's marginal cost is:
Answer
Question 9 answers

the ratio of the change in total cost to the change in the quantity of output.

the change in total cost divided by the change in labor input.

the slope of the average fixed cost curve.

all of the above.


If marginal cost is less than average total cost, then average total cost is decreasing.

True
False



Marginal cost, mathematically, is the slope of the:

average total cost curve.

average variable cost curve.

average fixed cost curve.

total cost curve.






The change in total output resulting from a 1-unit increase in the quantity of a factor of production used, holding the quantities of all other factors of production constant, is:


average cost.

average product.

marginal cost.

marginal product.



Marginal cost rises over the range of increasing marginal returns and falls over the range of diminishing marginal returns.

True
False



The vertical difference between curve B and curve C at any quantity of output is:
Answer


marginal cost.

fixed cost.

average fixed cost.

average variable cost.



If your plant is operating in the positively-sloped portion of a long-run average cost curve, this could be the result of:


decreased input prices.

improved utilization of by-products.

specialization of resources.

limited decision-making capacity.



1.
Average total cost is the ratio of:


total cost to the marginal cost.

total cost to the quantity of output.

total cost to the amount of variable input.

marginal cost to the amount of variable input.



The slope of the total product curve:


shows how output changes in response to a change in the quantity of a variable factor of production.

is the average product.

is the marginal product.

is described by A and C.


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.

Explanation / Answer

1.true 2.true 3.False

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