DCC Eco 105 CH. 4 Quiz Review

1) In a bustling city, a new coffee shop owned by Ava is trying to establish itself in the market. A key assumption about the way Ava's coffee shop behaves is that it

• A) maximizes market share.

• B) minimizes costs.

• C) maximizes revenue.

• D) maximizes profit.

2) If Daniel is organizing a school event and the level of an input cannot be increased because there is insufficient time to put them in place, they are called

• A) changeable input.

• B) unchangeable input.

• C) fixed input.

• D) variable input.

3) When workers subdivide the tasks of a job in such a way so as to become more efficient, economists refer to this as

• A) the degrees of freedom.
• B) the division of tasks.
• C) the separation of powers.
• D) the division of labor.

4) In a bakery, the source of the benefits of the division of labor is

• A) the inefficiency that results from the fact that capital is fixed.

• B) the fact that anytime you increase labor you get more output.

• C) that when each worker is equally capable, each worker adds to production exactly the same as the previous one.

• D) the efficiency that results from workers specializing in one aspect of production.

5) Mason runs a small bakery and notices that as he hires more bakers, the additional output from each new baker decreases. The source of diminishing returns is

• A) the inefficiency that results from the fact that the bakery's ovens and space are fixed.

• B) the efficiency that results from bakers specializing in one type of pastry.

• C) the fact that anytime Mason hires more bakers, he gets more pastries.

• D) that when each baker is equally skilled, each baker adds to production exactly the same as the previous one.

6) When a tech company like Samuel's Software Solutions hires more developers and becomes more efficient, they are benefiting from

• A) the division of labor.

• B) the law of large numbers.

• C) diminishing marginal utility.

• D) diminishing returns.

7) When Daniel's bakery hires additional bakers and finds that each new baker contributes less to the total production of bread than the bakers hired before them, they are experiencing

• A) the law of large numbers.

• B) the division of labor.

• C) diminishing returns.

• D) diminishing marginal utility.

8) Ethan runs a bakery and notices that his costs increase as he bakes more cakes. These costs are called

• A) changeable costs.

• B) unchangeable costs.

• C) fixed costs.

• D) variable costs.

9) Daniel runs a small bakery. He notices that some of his costs do not increase even when he bakes more cakes. These costs are called

• A) unchangeable costs.

• B) fixed costs.

• C) variable costs.

• D) changeable costs.

10) Marginal Cost is

• A) the per unit variable cost of production.
• B) the per unit cost of production.
• C) the per unit fixed cost of production.
• D) the addition to cost associated with one additional unit of output.