When a rm puts idle equipment to use by hiring another worker, what will result? (1) Fixed costs and variable costs will rise. (2) Fixed costs will fall. (' ) Variable costs will fall. ) Variable costs will rise. 3 (4 Which of the following represents a xed expense for a real estate ofce? (1) Commissions paid to employees (2) Ofce insurance (3) Business cards ) (4 Paper used for printers What is the shape of the average xed cost curve? (1) It always rises with increased levels of output. (2) It declines as long as it is above marginal cost. (3) It always declines with increased levels of output. (4) It declines as long as it is below marginal cost. If the long-run average total cost curve is falling, then: (1) diminishing marginal product is operating. (2) constant returns to scale are present. (3) diseconomies of scale are present. (4) economies of scale are present. 10. A stationery firm produces and sells staplers. Last year, it produced 5,000 staplers and sold each stapler for $10. In producing the 5,000 staplers, it incurred variable costs of $25,000 and a total cost of $45,000. What was the firm's average fixed cost? (1) $3 (2) $4 (3) $5 (4) $6 11. Constant returns to scale occur: (1) when the firm's long-run average cost curve is rising as output increases. (2) when the firm's long-run average cost curve is falling as output increases. (3) in the short-run only. (4) when the firm's long-run average total costs remain fixed as output increases. 12. When marginal cost is rising, but is less than average total cost: (1) average total cost is rising. (2) average total cost is falling. (3) average variable cost must be falling. (4) marginal cost must be falling.l3. Diminishing marginal product of labour occurs when: (1) adding another unit of labour increases output, but not by as large a margin as the previously employed labour. (2) adding another unit oflabour decreases output. (3) adding another unit of labour increases output, by more than the margin of previously employed labour. (4) none ofthe above. 14. Opportunity cost: (1) includes accounting prots. ) increases as implicit costs increase. (3) is equal to total revenue. ) is equal to economic prot. 15. Comparing a company's short-run average total cost curve and long-run average total cost curve, the average total cost in the short run will be the average total cost in the long run. (1) larger than or equal to (2) smaller than or equal to (3) equal to (4) atter than THE NEXT TWO (2) QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION: Atlas Construction specializes in constructing major industrial properties. The structure of this firm's costs is as follows. 100 120 150 1?5 0 16. The efcient scale of construction for Atlas occurs at: (1) (1:120 (2) Q=150 (3) Q=175 (4) Q=100 17. At what level of output would marginal cost equal average variable cost? (1) Q2120 (2) Q2150 {3) Q=175 (4) Q=100 18. If a firm wants to capitalize on economies of scale, how may it be able to do so? {1) By assigning many tasks to a few employees {2) By assigning limited tasks to employees, so they can master those tasks {3) By producing a smaller quantity of output {4) By producing only one product 19. What does marginal cost tell us? {1) ' (2) 'he value of all resources used in a production process \"he additional profit earned when output is increased by one unit 'he amount by which total cost rises when output is in creased by one unit (3) (4) \"he amount by which output rises when labour is increased by one unit 20. Average variable cost equals average total cost when: (1) marginal cost is rising. (2) marginal cost is falling. (3) there are no fixed costs associated with production. (4) marginal cost equals fixed cost.THE NEXT FOUR (4) QUESTIONS REFER TO THE FOLLOWING TABLE: Quantity FC VC TC MC ATC AFC AVC 0 $20 $0 $20 1 $20 W $21 2 $20 $2 $22 10 $20 $30 Y X Z 5. The correct value for the box marked W is: (1) $20 (2) $10 (3) $1 (4) $5 6. The correct value for the box marked X is: (1) $3 (2) $2 (3) $1 (4) impossible to determine with the given information. . The correct value for the box marked Y is: (1) $20 (2) $10 (3) $8 (4) $1 8. The correct value for the box marked Z is: (1) $10 (2) $15 (3) $2 (4) impossible to determine with the given information.9. What is the fundamental reason for marginal cost rising as output increases? (1) Rising average fixed cost (2) Economies of scale (3) Diseconomies of scale (4) Diminishing marginal product