Practice Test Midterm 3

Practice Test Midterm 3 - Practice Test for Midterm 3, Fall...

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Practice Test for Midterm 3, Fall 2007 Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. A production function is a relationship between a. inputs and quantity of output. b. inputs and revenue. c. inputs and costs. d. inputs and profit. Figure 13-1 The figure below depicts a production function for a firm that produces cookies. ____ 2. Refer to Figure 13-1 . With regard to cookie production, the figure implies a. diminishing marginal product of workers. b. diminishing marginal cost of cookie production. c. decreasing cost of cookie production. d. increasing marginal product of workers. ____ 3. Which of the following statements about a production function is correct for a firm that uses labor to produce output? a. The production function depicts the relationship between the quantity of labor and the quantity of output. b. The slope of the production function measures marginal cost. c. The quantity of output determines the maximum amount of labor the firm will hire. d. All of the above are correct. Table 13-1 Number of Workers Total Output Marginal Product 0 0 -- 1 30 2 40
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3 50 4 40 5 30 ____ 4. Refer to Table 13-1 . What is total output when 4 workers are hired? a. 30 b. 40 c. 120 d. 160 ____ 5. The marginal cost curve crosses the average total cost curve at a. the efficient scale. b. the minimum point on the average total cost curve. c. a point where the marginal cost curve is rising. d. All of the above are correct. Figure 13-6 The curves below reflect information about the cost structure of a firm. ____ 6. Refer to Figure 13-6 . Which of the curves is most likely to represent average variable cost? a. A b. B c. C d. D ____ 7. Which of the following statements is false? a. The marginal cost of the fifth unit of output equals the total cost of five units minus the total cost of four units. b. The total variable cost of seven units equals the average variable cost of seven units times seven. c. If marginal cost is rising, then average variable cost must be rising. d. The marginal cost of the fifth unit of output equals the total variable cost of five units minus the total variable cost of four units. ____ 8. Which of the following is not a property of a firm's cost curves?
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a. Marginal cost must eventually rise as a result of diminishing marginal product. b.
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This note was uploaded on 04/19/2008 for the course ECON 2304 taught by Professor Majumder during the Fall '07 term at University of Houston.

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Practice Test Midterm 3 - Practice Test for Midterm 3, Fall...

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