Question 1

If a machine cost $50,000 initially and is expected to last for 20 years but is worth $60,000 after one year because it is in short supply, an accountant most likely would say that:

Accepted Answer

A)   the machine's cost for each of its 20 years of existence is $2,500.
B)   the machine's cost for each of its 20 years of existence is $3,000.
C)   during the first year the machine had no cost; it provided a revenue to the firm.
D)   the value of the machine will continue to increase 20 percent per year for the next 20 years.E) A) and D)
F) None of the above

Question 2

The marginal rate of substitution of an isoquant curve is the rate at which:

Accepted Answer

A)   inputs must be substituted for one another to keep costs constant.
B)   inputs are substituted for output.
C)   inputs must be substituted for one another to keep output constant.
D)   the marginal productivity of a factor declines.E) B) and C)
F) All of the above

Question 3

Diseconomies of scale are associated with:

Accepted Answer

A)   an upward-sloping long-run average cost curve.
B)   an upward-sloping short-run average cost curve.
C)   a downward-sloping long-run average cost curve.
D)   a downward-sloping short-run average cost curve.E) A) and B)
F) A) and C)

Question 4

According to the text, globalization has led to greater U.S. specialization in:

Accepted Answer

A)   marketing.
B)   manufacturing.
C)   farming.
D)   manual labor.E) None of the above
F) C) and D)

Question 5

Refer to the graph shown. The output range in region b is associated with:

Accepted Answer

A)   diminishing marginal productivity.
B)   constant returns to scale.
C)   economies of scale.
D)   diseconomies of scale.E) All of the above
F) A) and C)

Question 6

Learning by doing:

Accepted Answer

A)   causes average total cost curves to be downward-sloping.
B)   shifts average total cost curves downward.
C)   offsets diseconomies of scale, making the average total cost curve flat.
D)   is not important in the real world.E) B) and D)
F) B) and C)

Question 7

The upward-sloping part of the long-run average cost curve is explained by:

Accepted Answer

A)   indivisible setup costs.
B)   diseconomies of scale.
C)   output levels that exceed the minimum efficient level of production.
D)   decreasing marginal productivity.E) B) and D)
F) B) and C)

Question 8

The upward-sloping portion of the short-run average total cost curve is caused by:

Accepted Answer

A)   indivisible setup costs.
B)   diseconomies of scale.
C)   the absence of fixed inputs.
D)   the presence of fixed inputs.E) B) and C)
F) C) and D)

Question 9

Economies of scale occur when a firm's long-run average total cost curve is:

Accepted Answer

A)   upward-sloping.
B)   vertical.
C)   downward-sloping.
D)   horizontal.E) None of the above
F) B) and C)

Exam 12: Production and Cost Analysis II

Learning by doing:

Correct Answer
verified

The marginal rate of substitution of an isoquant curve is the rate at which:

Correct Answer
verified

The upward-sloping part of the long-run average cost curve is explained by:

Correct Answer
verified

Diseconomies of scale are associated with:

Correct Answer
verified

Refer to the graph shown. The output range in region b is associated with:

Correct Answer
verified

The upward-sloping portion of the short-run average total cost curve is caused by:

Correct Answer
verified

According to the text, globalization has led to greater U.S. specialization in:

Correct Answer
verified

If a machine cost $50,000 initially and is expected to last for 20 years but is worth $60,000 after one year because it is in short supply, an accountant most likely would say that:

Correct Answer
verified

Economies of scale occur when a firm's long-run average total cost curve is:

Correct Answer
verified

Exam 12: Production and Cost Analysis II

Learning by doing:

Correct AnswerverifiedShow Answer

The marginal rate of substitution of an isoquant curve is the rate at which:

Correct AnswerverifiedShow Answer

The upward-sloping part of the long-run average cost curve is explained by:

Correct AnswerverifiedShow Answer

Diseconomies of scale are associated with:

Correct AnswerverifiedShow Answer

Refer to the graph shown. The output range in region b is associated with:

Correct AnswerverifiedShow Answer

The upward-sloping portion of the short-run average total cost curve is caused by:

Correct AnswerverifiedShow Answer

According to the text, globalization has led to greater U.S. specialization in:

Correct AnswerverifiedShow Answer

If a machine cost $50,000 initially and is expected to last for 20 years but is worth $60,000 after one year because it is in short supply, an accountant most likely would say that:

Correct AnswerverifiedShow Answer

Economies of scale occur when a firm's long-run average total cost curve is:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified