AP micro

question

Which of the following provides an example of the law of diminishing returns

answer

D. As more of a variable input—for example, labor is used with a fixed number of machines— output increases but at a diminishing rate.

question

Assume the marginal product of labor first rises, reaches a maximum and then falls. If the average product of labor is falling, which of the following is true?

answer

The marginal product of labor must be falling.

question

Based on the short- run production function graph above showing the relationship between the quantity of labor and total product, which of the following statement is true?

answer

Total product is maximized when marginal product is zero.

question

In the short run, assume diminishing marginal product of labor sets in with the hiring of the second worker. Which of the following will remain constant as a firm produces more output.

answer

Total fixed cost.

question

Assume that the short-run marginal cost curve initially falls, and it then rises as quantity of output increases. Which of the following must be true?

answer

Initially the marginal product of labor increases but eventually marginal product of labor decreases.

question

Which of the following statements about short-run cost is true?

answer

Total fixed cost plus total variable cost equals total cost.

question

The graph above shows a firm's long run average total cost curve (LRATC). Which of the following statements is true as the firm increases its scale of production?

answer

For output levels above Q1, the firm experiences diseconomies of scale.

question

Assume a firm doubles its usage of each input, resulting in a doubling of the firm's output. Which of the following describes this result?

answer

Constant returns to scale.

question

Which of the following explains the difference between short-run and long-run costs?

answer

All costs are variable in the long run but not in the short run.

question

Which of the following statements regarding accounting profits, opportunity costs, and economic profits is true?

answer

If accounting profits are less than opportunity costs there will be economic losses.

1 of 10

question

Which of the following provides an example of the law of diminishing returns

answer

D. As more of a variable input—for example, labor is used with a fixed number of machines— output increases but at a diminishing rate.

question

Assume the marginal product of labor first rises, reaches a maximum and then falls. If the average product of labor is falling, which of the following is true?

answer

The marginal product of labor must be falling.

question

Based on the short- run production function graph above showing the relationship between the quantity of labor and total product, which of the following statement is true?

answer

Total product is maximized when marginal product is zero.

question

In the short run, assume diminishing marginal product of labor sets in with the hiring of the second worker. Which of the following will remain constant as a firm produces more output.

answer

Total fixed cost.

question

Assume that the short-run marginal cost curve initially falls, and it then rises as quantity of output increases. Which of the following must be true?

answer

Initially the marginal product of labor increases but eventually marginal product of labor decreases.

question

Which of the following statements about short-run cost is true?

answer

Total fixed cost plus total variable cost equals total cost.

question

The graph above shows a firm's long run average total cost curve (LRATC). Which of the following statements is true as the firm increases its scale of production?

answer

For output levels above Q1, the firm experiences diseconomies of scale.

question

Assume a firm doubles its usage of each input, resulting in a doubling of the firm's output. Which of the following describes this result?

answer

Constant returns to scale.

question

Which of the following explains the difference between short-run and long-run costs?

answer

All costs are variable in the long run but not in the short run.

question

Which of the following statements regarding accounting profits, opportunity costs, and economic profits is true?

answer

If accounting profits are less than opportunity costs there will be economic losses.

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