Chapter 5 Physical Product (Total, Average, Marginal) U3

Chapter 5 Physical Product (Total, Average, Marginal) U3

Multiple Choice

The combining of human, natural, capital, and entrepreneurship resources to make goods or provide services

• consumption

• production

• distribution

• resources

Multiple Choice

Which of the following is an example of a Factor of Production?

• Labor (also called Human Capital)

• Land

• Capital (also called Physical Capital)

• All of the Above

Multiple Choice

This is the term given to how many resources are used in production is called.

• Output

• Cost

• Fixed Cost

• Input

Multiple Choice

This is the term given to how many goods/services a business produces.

• Output

• Cost

• Fixed Cost

• Variable cost

Multiple Choice

Average product is defined as:

• total product divided by the total cost.

• total product divided by marginal product

• total product divided by the variable input.

• marginal product divided by the variable input.

Multiple Choice

The change in total product resulting from a change in a variable input is:

• average product

• marginal cost.

• marginal product

• implicit product

Multiple Choice

The increase in output a firm can produce by adding a variable input (resources, capital) to a fixed input

• Marginal Output of Labor

• Increasing Marginal Returns

• Diminishing Marginal Returns

• Marginal Input of Labor

Multiple Choice

What is the average product with 1 labourer?

• 1 unit

• 4 units

• 5 units

• 10 units

Multiple Choice

What is the marginal product with 3 labourers?

• 5 unit

• 5.5 units

• 6 units

• 7 units

Multiple Choice

At the level of 5 labors, average production is __________.

• 4 units

• 6 units

• 7 units

• 8 units

Multiple Choice

The table shows the total output that Marty's Bread produces with differing amounts of labour.

At what quantity of labour does diminishing returns to labour set in? (output start to decrease)

• at 8th

• at 1st

• at 5th

• at 4th

Multiple Choice

The graph above shows the marginal product (MP) and the average product (AP) of labor for a firm that uses labor as the only variable input. At which quantity of labor does marginal cost change from decreasing to increasing?

• L1

• L2

• L3

• L5

Multiple Choice

The marginal product curve (MP) and the average product curve (AP) intersect ______________.

• at the maximum point of the marginal product curves.

• where the total product is at its maximum.

• where the marginal product equals zero.

• at the maximum point of the average product curves.

Multiple Choice

What happens to total product when marginal product becomes negative?

• Increases

• Decreases

• Remains unchanged

• Reaches a peak

Multiple Choice

What is true about marginal product, if total product is maximized?

• marginal product is negative

• marginal products is positive

• marginal product equals zero

• marginal product is increasing

Multiple Choice

Suppose that a firm begins to hire workers for a newly completed plant with a fixed amount of machinery. As the firm hires additional workers, one would expect the marginal product to: 

• fall initially, but eventually rise

• rise initially, but eventually fall

• rise consistently due to diminishing returns

• rise consistently due to the advantages of specialization

Multiple Choice

What cannot be changed in the short run?

• the level of stock held by firms

• the level of technology available

• market price of goods

• the output of individual firms in an industry