64.Marginal cost:

a.Is the change in total output from hiring one more factor of production.

b.Is the change in total cost from producing one additional unit of output.

c.Falls when there are diminishing returns.

d.All of the above.

65.To the economist total cost includes:

a.Explicit and implicit costs, including a normal profit.

b.Neither explicit or implicit costs.

c.Implicit, but not explicit costs.

d.Explicit, but not implicit costs.

66.Economies of scale:

a.Exist in both the short run and the long run.

b.Explain why average variable and average total costs decline in the short run.

c.Explain why average total costs decline as output increases in the long run.

d.Explain why average total costs increase as output increases in the long run.

67.Diminishing returns are the result of:

a.Inefficiency in the production process.

b.The use of inferior factors of production.

c.A rising ratio of variable input to fixed input.

d.Lower opportunity costs of the factors of production.

68.The marginal cost curve:

a.Will be affected by changes in the price of factor inputs.

b.Slopes upward to the right as output increases.

c.Is the short run supply curve for a competitive firm.

d.All of the above.

69.Diseconomies of scale arise primarily because:

a.The short-run average total cost curve rises when marginal product is increasing.

b.Of the difficulties involved in managing and coordinating a large business enterprise.

c.Firms must be large both absolutely and relative to the market to employ the most efficient productive techniques available.

d.Beyond some point marginal product declines as additional units of a variable resource (labor) are added to a fixed resource (capital).

101.The percentage of total sales of an industry made by the four (or some other number) largest sellers in an industry is called:

a.Lorenz coefficient.

b.Hershman Index.

c.Concentration Ratio.

d.Gini Ratio.

102.Which of the following is equivalent to ATC?

a.FC+VC.

b.(FC+VC)/Q.

c.Change in output divided by change in total cost.

d.None of the above.

103.The only costs which do not change with the rate of output are:

a.Average variable costs.

b.Fixed costs.

c.Average fixed costs.

d.Variable costs.

105.A U-shaped average total cost curve implies:

a.First, diminishing returns, and then, increasing returns.

b.First, marginal cost below average total cost, and then marginal cost above average total cost.

c.That total cost are at a minimum at the minimum of the average cost curve.

d.A linear total cost curve.

109. Government regulators can achieve efficiency for a natural monopoly by setting a price ceiling equal to the intersection of the demand curve and the:

a. Marginal Revenue Curve.

b. Average Cost Curve.

c. Marginal Cost Curve.

d. Average Fixed Cost Curve.

129. According to international trade theory, a country should:

A. import goods in which it has an absolute advantage.

B. import goods in which it has a comparative disadvantage.

C. export goods in which it has an absolute advantage.

D. import goods in which it has an absolute disadvantage.

130. A tariff differs from a quota in that a tariff is:

A. levied on imports, whereas a quota is imposed on exports.

B. levied on exports, whereas a quota is imposed on imports.

C. a tax levied on exports, whereas a quota is a limit on the number of units of a good that can be exported.

D. a tax imposed on imports, whereas a quota is an absolute limit to the number of units of a good that can be imported.

134. An import quota does which of the following?

A. decreases the price of the imported goods to consumers

B. increases the price of the domestic goods to consumers

C. redistributes income away from domestic producers of those products toward domestic producers of exports

D. both a) and c)

137. Marginal revenue product is the

A.

additional revenue from one additional dollar increase in price.

B.

change in the revenue product resulting from one additional unit of input.

C.

additional revenue from one additional unit of input.

D.

change in revenue resulting in one additional dollar in price.

138.If a firm is using a resource hired in a perfectly competitive market, and if the price of the resource exceeds the marginal revenue product of the resource,

A.

more of the resource should be used.

B.

Less of the resource should be used.

C.

the firm should pay a lower price for the resource.

D.

the firm should pay a higher price for the resource.

E.

the firm is using the optimal amount of the resource