At what point will a new unit of labor add the most to total output of the firm?

1. That where marginal product is at a maximum
2. That where average product is at a maximum
3. That where marginal product of labor equals average product of labor
4. That where total product is at a maximum

At what point will the most output per worker be produced?

1. That where marginal product is at a maximum
2. That where average product is at a maximum
3. That where marginal product equals average product
4. That where total product is at a maximum

The portion of the marginal product curve in which marginal product is declining illustrates

1. The law of increasing returns
2. Constant returns to scale
3. The law of diminishing returns
4. Falling average product

At the point where marginal product equals average product,

1. Marginal product is rising
2. Marginal product is falling
3. Average product is rising
4. Average product is falling

In the short run, total cost equals

1. Total fixed cost
2. Total variable cost
3. Total variable cost minus total fixed cost
4. Total variable cost plus total fixed cost

Change in output does NOT cause changes in

1. Variable cost
2. Average fixed cost
3. Marginal cost
4. Total fixed cost

TFC/Q + TVC/Q is the formula for

1. Average total cost
2. Marginal cost
3. Total cost
4. Variable cost

Marginal cost equals

1. Change in total variable cost divided by change in total fixed cost
2. Change in total variable cost divided by change in quantity
3. Change in total fixed cost divided by change in quantity
4. Change in total variable cost minus change in total fixed cost

Total fixed cost equals

1. Total cost minus total variable cost
2. Quantity times the difference between average total cost and average variable cost
3. Quantity times average fixed cost
4. All of the above

The quantity at which output can be produced at the lowest average variable cost is

1. Greater than the quantity which can be produced at minimum average total cost
2. Less than the quantity which can be produced at minimum marginal cost
3. Greater than the quantity at which marginal cost equals average variable cost
4. None of the above

Which of the following statements is correct?

1. Total cost rises with output, first at an increasing rate and then at a decreasing rate
2. As output increases, marginal cost first rises then falls
3. The law of variable proportions accounts for the U-shaped nature of the average variable cost curve
4. The average product curve has the same basic shape as the average total cost curve

When the average total cost curve is rising, the marginal cost curve will be

1. Falling
2. Above the average total cost curve
3. Rising more slowly than the average variable cost curve
4. Rising more slowly than the average total cost curve

When the marginal cost curve is rising, it is

1. Equal to average variable cost at the lowest point of the average variable cost curve
2. Equal to average total cost at the lowest point of the average total cost curve
3. Less than average total cost when average total cost is falling
4. All of the above

1. If a firm can produce 100 disks for $100 and 200 disks for $150, what is the marginal cost per disk of the additional 100 disks?
2. $1.00
3. $0.75
4. $0.50
5. $0.25

1. Complete the following table. (No, there is no essential information omitted; as a hint, remember the formula for total variable cost and derive the other information needed from what is given in the last line.)

Labor Quantity MP AP TFC TVC TC AFC AVC ATC MC

0 0 ____ ____ ____ ____ ____ ____ ____ ____ ____

1 7 ____ ____ ____ ____ ____ ____ ____ ____ ____

2 15 ____ ____ ____ ____ ____ ____ ____ ____ ____

3 25 ____ ____ ____ ____ ____ ____ ____ ____ ____

4 40 ____ ____ ____ ____ _____ ____ ____ ____ ____

5 54 ____ ____ ____ ____ ____ ____ ____ ____ ____

6 65 ____ ____ ____ ____ ____ ____ ____ ____ ____

7 75 ____ ____ ____ ____ ____ ____ ____ ____ ____

8 84 ____ ____ ____ ____ ____ ____ ____ ____ ____

9 90 ____ ____ ____ ____ ____ ____ ____ ____ ____

10 95 ____ ____ 2000 20000 ____ ____ ____ ____ ____