Marginal product is: Question options: a) total product divided by the number of
ID: 1113023 • Letter: M
Question
Marginal product is:
Question options:
a)
total product divided by the number of workers employed.
b)
the increase in total cost attributable to the employment of one more worker.
c)
the increase in total revenue attributable to the employment of one more worker.
d)
the increase in total output attributable to the employment of one more worker.
The marginal cost may be defined as the:
Question options:
a)
b)
c)
d)
The short-run marginal cost curve eventually rises because of:
Question options:
a)
b)
c)
d)
Suppose that when 100 units of output are produced, the MC of the 101st unit is $2. This is equal to the minimum average total cost, and MC is rising. If the optimal output level is 150 units (in the short run), at that level:
Question options:
a)
b)
c)
d)
In the short run the individual competitive firm's supply curve is that segment of the:
Question options:
a)
b)
c)
d)
A pure monopolist's demand curve
Question options:
a)
b)
c)
d)
Question options:
a)
b)
c)
d)
Question options:
a)
b)
c)
d)
Question options:
a)
b)
c)
d)
Answer the following question on the basis of the graph.
The firm will close down at any price less than:
Question options:
a)
b)
c)
d)
The firm will charge a price:
Question options:
a)
b)
c)
d)
The monopolists' profits will be equal to the area:
Question options:
a)
b)
c)
d)
Question options:
a)
b)
c)
d)
The antitrust laws are based on the:
Question options:
a)
idea that competition leads to greater economic efficiency than does monopoly.
b)
view that all negative externalities should be eliminated by government action.
c)
creative destruction view of competition.
d)
view that nonprice competition should be strictly regulated by government.
A firm is likely to be a natural monopoly:
Question options:
a)
if it is producing an inferior good.
b)
when the demand for its product or service is inelastic.
c)
because government grants it an exclusive franchise.
d)
if economies of scale are experienced over the full range of output.
To the economist, total cost includes:
Question options:
a)
implicit, but not explicit, costs.
b)
explicit, but not implicit, costs.
c)
explicit and implicit costs.
d)
neither implicit nor explicit costs.
The basic characteristic of the short run is that:
Question options:
a)
barriers to entry prevent new firms from entering the industry.
b)
the firm does not have sufficient time to change the size of its plant.
c)
the firm does not have sufficient time to cut its rate of output to zero.
d)
a firm does not have sufficient time to change the amounts of any of the resources it employs.
The law of diminishing returns results in:
Question options:
a)
an eventually rising marginal product curve.
b)
a total product curve that rises indefinitely.
c)
an eventually falling marginal cost curve.
d)
a total product curve that eventually increases at a decreasing rate.
Refer to the diagram. At output level Q total fixed cost is:
Question options:
a)
0BEQ.
b)
0BEQ - 0AFQ.
c)
0CDQ.
d)
BCDE.
Other things equal, if the prices of a firm's variable inputs were to fall:
Question options:
a)
one could not predict how unit costs of production would be affected.
b)
marginal cost, average variable cost, and average fixed cost would all fall.
c)
marginal cost, average variable cost, and average total cost would all fall.
d)
average variable cost would fall, but marginal cost would be unchanged.
Which of the following is characteristic of a regulated natural monopoly?
Question options:
a)
Extensive economies of scale.
b)
The provision of an essential service.
c)
The wasteful duplication of capital facilities in the event of competition.
d)
All of these.
Overall, economists believe that deregulation of industries formerly subjected to industrial regulation:
Question options:
a)
has produced large net benefits for consumers and society.
b)
is neutral in its impact to society's well-being, creating minimal net benefits at best.
c)
has produced sizable efficiency gains in the communications industry, but not in the transportation industry (railways, trucking, airlines).
d)
has been a clear failure.
A purely monopolistic firm:
Question options:
a)
has no entry barriers.
b)
faces a downward sloping demand curve
c)
produces a product or service for which there are many close substitutes.
d)
earns only a normal profit in the long run.
When a firm is on the inelastic segment of its demand curve, it can:
Question options:
a)
increase total revenue by reducing price.
b)
decrease total costs by decreasing price.
c)
increase profits by increasing price.
d)
increase total revenue by more than the increase in total cost by increasing price.
The marginal revenue curve for a monopolist:
Question options:
a)
is a straight, upward sloping curve.
b)
rises at first, reaches a maximum, and then declines.
c)
becomes negative when output increases beyond some particular level.
d)
is a straight line, parallel to the horizontal axis.
Question 1Explanation / Answer
Answer:- Marginal product is:
Correct Answer:- the increase in total output attributable to the employment of one more worker.
Reason:- Marginal product is the increase in total product when one more unit of input is added.
Answer:- The marginal cost may be defined as the:
Correct Answer:- change in total cost which results from producing one more unit of output.
Reason:- Marginal cost is the increase in total cost when one more unit of output is produced
Answer:- The short-run marginal cost curve eventually rises because of:
Correct Answer:- diminishing marginal productivity.
Answer:- The antitrust laws are based on the:
Correct Answer:- idea that competition leads to greater economic efficiency than does monopoly.
Reason:- greater competition benefits both the economy and the consumer.
Answer:- A firm is likely to be a natural monopoly:
Correct Answer:- if economies of scale are experienced over the full range of output.
Answer:- To the economist, total cost includes
Correct Answer:- explicit and implicit costs.
Reason:- Both costs will be considered by economists.
Answer:- The basic characteristics of the short run is that
Correct Answer:- the firm does not have sufficient time to change the size of its plant
Reason:- Only variable inputs can be changed
Answer:- Refer to the above diagram. At output level Q total fixed cost is
Correct Answer:- BCDE.
Answer:- Other things equal, if the prices of a firm's variable inputs were to fall:
Correct Answer:- marginal cost, average variable cost, and average total cost would all fall.
Answer:- Which of the following is characteristic of a regulated natural monopoly?
Correct Answer:- All of these.
Reason:- A regulated monopoly has all the traits mentioned in the question.
Answer:- Overall, economists believe that deregulation of industries formerly subjected to industrial regulation
Correct Answer:- has produced large net benefits for consumers and society.
Reason:- Due to deregulation., higher competition resulted in benefits to consumers and economy.
Answer:- A purely monopolistic firm:
Correct Answer:- faces a downward sloping demand curve
Reason:- Demand curve of a monopolistic firm is negative slopped.
Answer:- When a firm is on the inelastic segment of its demand curve, it can:
Correct Answer;- increase profits by increasing price.
Reason:- firm can increase price as the demand is inelastic thus no change will be resulted on demand due to increased price
Answer:- The marginal revenue curve for a monopolist:
Correct Answer:- becomes negative when output increases beyond some particular level.
Reason:- MR curve for monopolist is a downward sloping curve