Question 1
 
In the table below, what are the marginal costs of the fourth unit of output?
Answer

a.
$10,000
 

b.
$20,000
 

c.
$30,000
 

d.
$40,000
 
4 points
Question 2
 
If a firm gets so large that management of employees and other resources becomes a costly problem, it will be experiencing
Answer

a.
diseconomies of scale.
 

b.
diminishing marginal product.
 

c.
constant returns to scale.
 

d.
economies of scale.
 
4 points
Question 3
 
When El Torito Restaurant is deciding how many waiters to hire for a holiday weekend, it is making a ________ decision.
Answer

a.
plant-size
 

b.
long-run
 

c.
short-run
 

d.
fixed-input
 
4 points
Question 4
 
In the long run, a firm can change
Answer

a.
nothing.
 

b.
only one input, such as plant size.
 

c.
all inputs.
 

d.
None of these are correct.
 
4 points
Question 5
 
In the above table, what is the marginal cost to produce the 2nd unit of output?
Answer

a.
$30
 

b.
$60
 

c.
$55
 

d.
$20
 
4 points
Question 6
 
The observation that beyond some point, successive increases in a variable factor of production added to a fixed factor of production lead to smaller and smaller increases in output is
Answer

a.
the law of marginal utility.
 

b.
the law of averages.
 

c.
the law of diminishing marginal product.
 

d.
the law of opportunity costs.
 
4 points
Question 7
 
In the above table, the marginal product of the second worker is
Answer

a.
68.
 

b.
98.
 

c.
38.
 

d.
It cannot be determined.
 
4 points
Question 8
 
If a firm is experiencing diseconomies of scale, then
Answer

a.
proportional increases in all inputs result in proportional increases in output.
 

b.
the long-run average cost curve is rising as output expands.
 

c.
the long-run average cost curve is decreasing as output expands.
 

d.
the…