Microeconomics Exam 3

If in the short run a firm's total product is increasing, then its

• marginal product must also be increasing.

• marginal product must be decreasing.

• marginal product could be either increasing or decreasing.

• average product must also be increasing.

In order to apply the concept of diminishing returns to study time,

• the amount of study time available must be held constant.

• study time must be considered a long-run production process.

• all inputs to the learning process must be allowed to vary.

• all inputs to the learning process except for study time must be assumed to be fixed.

When the price of gasoline increases significantly, the delivery companies like UPS, FedEx, and the USPS all find

• their TVC curves shifting up.

• their TFC curves shifting up.

• themselves moving up along their TC curves.

• themselves moving up along their TVC curves.

Assume that in the short run a firm is producing 100 units of output, has average total costs of $200, and has average variable costs of $150. The firm's total fixed costs are

• $5,000

• $500

• $0.50

• $50

One reason why newspaper-publishers’ cost per paper increases as their circulation numbers fall is due to diminishing marginal returns.

• True

• False

In the short run,

• TVC will increase for a time at a diminishing rate, but then beyond some point will increase at an increasing rate.

• TVC will increase for a time at an increasing rate, but then beyond some point will increase at a diminishing rate.

• TVC will increase by the same absolute amount for each additional unit of output produced.

• one cannot generalize concerning the behavior of TVC as output increases.

If there are 10 plants producing the total domestic consumption of a product and each plant is operating at minimum efficient scale, then each plant accounts for what percentage of domestic consumption?

• 5%

• 10%

• 20%

• 25%

Which of the following would contribute most to a firm experiencing "economies of scale"?

• rising long-run average costs

• the law of diminishing marginal returns

• specialization of labor and management within the firm

• deterioration of information and control within the firm

The law of diminishing returns implies that

• the more hours you spend studying, the less you will know.

• your understanding will be increased by decreasing your marginal study time.

• eventually, the more hours you spend studying per day, the less you will learn with each added hour.

• the more hours you spend studying per day, the more you will learn with each added hour.

Which of the following types of firms are least likely to have their MC, AVC, and ATC curves affected by fluctuations in gasoline prices?

• firms like UPS that use a fleet of gasoline-powered vehicles

• taxi cab companies and Uber drivers

• companies that operate bus tours to popular vacation destinations

• firms like iTunes that distribute their products over the Internet