QUESTION 1

1. ________________________ arises where many firms are competing in a market to sell similar but differentiated products.
2. Oligopolistic competition
3. Perfect competition
4. Monopolistic competition
5. Oligopoly

5 points

QUESTION 2

1. ____________________________ occur when the marginal gain in output diminishes as each additional unit of input is added.
2. Diminishing variable returns
3. Diminishing average returns
4. Diminishing marginal returns
5. Diminishing marginal costs

5 points

QUESTION 3

1. The term _____________ is used to describe the additional cost of producing one more unit.
2. average cost
3. fixed cost
4. variable cost
5. marginal cost

5 points

QUESTION 4

1. The term __________________ describes a situation where the quantity of output rises, but the average cost of production falls.
2. diminishing marginal returns
3. marginal cost output
4. economies of scale
5. diseconomies of scale

5 points

QUESTION 5

1. Approximately what percentage of the US labor force is employed by firms that have fewer than 100 employees?
2. 63%
3. 50%
4. 45%
5. 35%

5 points

QUESTION 6

1. Why would labor be treated as a variable cost
3. they are costs incurred in the act of producing that will decrease with quantity produced
4. they are made before production starts and vary according to the specific line of business
5. labor costs are an input cost that firms are unable to change in the short run
6. producing larger quantities of a good or service generally requires more workers

5 points

QUESTION 7

1. The graph below illustrates the total cost function for GoodieCookie Co.How are the company's fixed costs represented in this graph
3. by adding up the fixed costs
4. at any vertical axis point where the total cost curve never equals zero
5. as the point where the total cost curve touches the vertical axis
6. by adding up the variable costs

5 points

QUESTION 8

1. Refer to the diagram below. Based on the information illustrated in the graph, which of the following is correct?
3. producing a marginal unit is reducing average costs overall
4. the marginal cost of production for producing an additional unit is below the cost for producing the earlier units
5. the transition point between where MC is pulling down and pulling up AC always occurs at the minimum point of the AC curve
6. low marginal costs first pull up the overall average costs

5 points

QUESTION 9

1. Whatever the firm's quantity of production, _____________ must exceed total costs if it is to earn a profit.
2. marginal costs
3. average costs
4. total revenue
5. variable costs

5 points

QUESTION 10

1. ____________ tells a firm whether it can earn profits given the price in the market.
2. Marginal cost
3. Total cost
4. Average cost
5. Average marginal cost

5 points

QUESTION 11

1. In economics, a firm that faces no competitors is referred to as _________________.
3. an oligopoly
4. a monopoly
5. a perfect competitor
6. an oligopolizor

5 points

QUESTION 12

1. A firm's ___________ consist of expenditures that must be made before production starts that typically, over the short run, _______________ regardless of the level of production.
2. fixed costs; do not change
3. variable costs; are constantly changing
4. fixed costs; are consistently changing
5. variable costs; do not change

5 points

QUESTION 13

1. ______________ include all of the costs of production that increase with the quantity produced.
2. Fixed costs
3. Variable costs
4. Average costs
5. Average variable costs

5 points

QUESTION 14

1. In the US economy, nearly half of all the workers employed by private firms work at
3. 18,000 firms with fewer than 100 employees.
4. 18,000 large firms that employ more than 500 workers.
5. 26,000 firms with fewer than 100 employees.
6. 26,000 large firms that employ more than 300 workers.

5 points

QUESTION 15

1. _____________ is calculated by taking the quantity of everything that is sold and multiplying it by the sale price.
2. Total revenue
3. Total profits
4. Average profits margin
5. Total cost

5 points

QUESTION 16

1. If a paper mill shuts down its operations for three months so that it produces nothing, its __________________ will be reduced to zero?
2. variable costs
3. fixed costs
4. opportunity costs
5. total cost

5 points

QUESTION 17

1. The marginal cost curve is generally ______________, because diminishing marginal returns implies that additional units are ________________________.
3. downward-sloping; more costly to produce
4. upward-sloping; more costly to produce
5. downward-sloping; less costly to produce
6. upward-sloping; less costly to produce

5 points

QUESTION 18

1. Fixed costs are important because, at least in the ___________, the firm _______________.
2. long run; cannot alter them
3. short run; cannot alter them
4. long run; can alter them
5. short run; can alter them

5 points

QUESTION 19

1. Which of the following should typically be ignored because spending has already been made and cannot be changed?
2. variable costs
3. sunk costs
4. marginal costs
5. average marginal costs

5 points

QUESTION 20

1. When __________________ exist, doubling of all inputs will result in more than doubling output, which means__________________________________________.
2. economies of scale; a larger factory can produce at a lower average cost than a smaller company.
4. economies of scale; a smaller factory can produce at a lower average cost than a larger company.
6. low labor inputs; larger scale of production leads to higher costs.
7. labor inputs; economies-of-scale curve is U-shaped.