Economics products and cost

What is the definition of the ‘Marginal Product of Labor’?

• The increase in output when an additional worker is employed, holding all other inputs constant

• The total output produced by all workers

• The increase in total cost when one more unit of labor is employed

• The cost per unit of labor employed

In the short run, what typically happens to marginal cost as output increases?

• Marginal cost remains constant

• Marginal cost decreases

• Marginal cost first decreases, then increases

• Marginal cost continuously increases

Which of the following explains the Law of Diminishing Returns?

• As more units of a variable input are added to fixed inputs, the additional output from each extra unit of the variable input eventually decreases

• As more inputs are used, total output will eventually fall

• Marginal costs decrease as output increases

• Fixed costs diminish as variable inputs are increased

What does the Total Product (TP) curve show?

• The relationship between the quantity of input and marginal product

• The relationship between the quantity of input and total output

• The total cost of production

• The efficiency of each unit of input

Which stage of production is considered efficient?

• Stage I

• Stage II

• Stage III

• Stage IV

If the marginal product is greater than the average product, what happens to the average product?

• It increases

• It decreases

• It remains constant

• It falls to zero

What causes the marginal cost curve to be U-shaped in the short run?

• The law of diminishing returns

• The law of supply

• Economies and diseconomies of scale

• Constant returns to scale

At which point do the marginal cost (MC) and average total cost (ATC) curves intersect?

• At the maximum point of MC

• At the maximum point of ATC

• At the minimum point of ATC

• At the minimum point of MC

What is the long-run average cost (LRAC) curve also known as?

• Envelope curve

• U-shaped curve

• Marginal product curve

• Break-even curve

What is the effect of increasing returns to scale?

• Average costs rise

• Marginal costs rise

• Average costs fall

• Total costs remain constant