Q1) Marginal cost CANNOT be calculated as:

Select one:

a.TC/Q, where TC is the total cost and Q is the output.

b.VC/Q, where VC is the variable cost and Q is the output.

c.the slope of the total cost curve.

d.ATC * Q, where ATC is the average total cost and Q is the output.

Q2) When a caterer produces 30 catered meals, its marginal cost and average variable cost each equal $10. Therefore, assuming normally shaped cost curves, at 29 meals its marginal cost is _____ $10 and its average variable cost is _____ $10.

Select one:

a.equal to; equal to

b.less than; greater than

c.greater than; greater than

d.greater than; less than

Q3) In the short run, the average total cost curve slopes upward because of:

Select one:

a.diminishing returns.

b.increasing returns.

c.diseconomies of scale.

d.economies of scale.

Q4) Assuming that all other factors of production are held constant, marginal product is the change in _____ output resulting from a one-unit change in _____.

Select one:

a.total; a fixed input

b.total; total product

c.total; a variable input

d.per unit; a fixed input

Q5) Suppose that hiring one, two, three, or four workers at a diaper factory generates total output of 200, 350, 450, or 500 diapers, respectively. The marginal product of the second worker is:

Select one:

a.50.

b.150.

c.100.

d.200.

Q6) The term diminishing returns refers to a:

Select one:

a.decrease in the extra output due to the use of an additional unit of a variable input when all other inputs are held constant.

b.falling interest rate that can be expected as one's investment in a single asset increases.

c.decrease in total output due to the firm hiring uneducated workers.

d.reduction in profits caused by increasing output beyond the optimal point.

Q7) The long-run average total cost of producing 100 units of output is $4, while the long-run average cost of producing 110 units of output is $4. These numbers suggest that between 100 and 110 units of output, the firm producing this output has:

Select one:

a.economies of scale.

b.diminishing returns.

c.diseconomies of scale.

d.constant returns to scale.