Untitled Flashcards

Front

An economically efficient method of production, is a method that produces a given level of output at the lowest cost possible

Back

True

Front

All of the following are associated with economies of scale except:

A)decreasing per-unit cost

B)spreading of indivisible set-up costs

C)increasing output per unit of input

D)diminishing marginal productivity

Back

diminishing marginal productivity

Front

The best indication of economies of scale is when the firm's:

A)long-run total average cost curve is upward sloping

B)average total costs increase as output is increased

C)long-run average total cost curve is downward sloping

D)long-run average total cost curve is horizontal

Back

long-run average total cost curve is downward sloping

Front

Which of the following provides the best evidence that economies of scale exist?

A)The per-unit costs on Excel Publishing Company's manuals fell following a large order

from the government.

B) Alpha-Beta Inc. raised its price 10 percent following a 5 percent increase in production

costs.

C) Widget Manufacturing doubled its production by opening a new plant that was identical

to its old plant.

D) The XYZ Co. increased production 25 percent following a 30 percent increase in all

inputs

Back

A)The per-unit costs on Excel Publishing Company's manuals fell following a large order

Front

5. Economies of scale exist partly because of indivisible setup costs.

T/F

Back

True

Front

The average cost curve in region "c" is associated with:

A) diminishing marginal productivity.

B) increasing marginal productivity.

C) economies of scale.

D) diseconomies of scale.

Back

D) diseconomies of scale.

Front

A firm that is experiencing diseconomies of scale will have:

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.

Back

A) an upward-sloping long-run average cost curve.

Front

Refer to the graph above. The most efficient way for a firm to produce 300 units of output is to use the plant size represented by: A) SATC_1.

B) SATC_2.

C) SATC_3.

D) SATC_4.

Back

A) SATC_1.

Front

Refer to the graph above depicting a perfectly competitive firm. The marginal revenue

curve is labeled:

A) I.

B) II.

C) III.

D) IV.

Back

C) III.

Front

In a perfectly competitive market, firms set: A) prices and quantities.

B) prices but not quantities.

C) quantities but not prices.

D) neither prices nor quantities.

Back

C) quantities but not prices.