Pre-Test Chapter 20 ed17

Pre-Test Chapter 20 ed17 - Pre-Test Chapter 20 ed17...

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Prof Keep Econ Chap 20 ed 17 Pre-Test Chap 20 Page 1 of 10 Pre-Test Chapter 20 ed17 Multiple Choice Questions 1. In the above diagram it is assumed that: A. some costs are fixed and other costs are variable. B. all costs are variable. C. the law of diminishing returns determines the shape of the cost curve. D. marginal product first falls, but ultimately rises as output is increased. 2. To the economist total cost includes: A. explicit and implicit costs, including a normal profit. B. neither implicit nor explicit costs. C. implicit, but not explicit, costs. D. explicit, but not implicit, costs. 3. If a firm increases all of its inputs by 10 percent and its output increases by 15 percent, then: A. it is encountering diseconomies of scale. B. the law of diminishing returns is taking hold. C. it is encountering economies of scale. D. the firm's long-run ATC curve will be rising.
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Prof Keep Econ Chap 20 ed 17 Pre-Test Chap 20 Page 2 of 10 4. Refer to the above diagram. The profit-maximizing level of output for this firm: A. is at point a . B. is at point b . C. is at point c . D. cannot be determined from the information given. 5. When a firm does more of something, it gets better at it. This learning-by-doing is: A. a source of diseconomies of scale. B. called the principle of natural progression. C. a source of economies of scale. D. called "spreading the overhead." Answer the next question(s) on the basis of the following cost data:
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Prof Keep Econ Chap 20 ed 17 Pre-Test Chap 20 Page 3 of 10 6. Refer to the above data. The marginal cost curve would intersect the average variable cost curve at about: A. 2 units of output. B. 4 units of output. C. 6 units of output. D. 7 units of output. 7. Refer to the above diagram. If labor is the only variable input, the average product of labor is at a: A. minimum at point b . B. maximum at point b . C. maximum at point a . D. maximum at point c . 8. (Last Word) Which of the following sayings relates most closely to the idea of sunk costs: A. Don't cry over spilt milk. B. He who hesitates is lost. C. A bird in the hand is worth two in the bush. D. Show me the money.
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This note was uploaded on 07/10/2011 for the course ECON 101 taught by Professor Smith during the Spring '11 term at Adrian College.

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Pre-Test Chapter 20 ed17 - Pre-Test Chapter 20 ed17...

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