Question 1 Total revenue minus total cost is equal to:
Question 2 In the short run, the cost of __________ is variable, whereas the cost of __________ is fixed.
Question 3 Which of the following is a question that a firm must answer in the long run but not in the short run?
Question 4 If all workers are able to specialize and become more productive as more labor is hired, the amount of total output produced:
Question 5 It is important for a firm to know its minimum efficient scale of production because that is where:
Question 6 The production function of a restaurant includes items such as labor (i.e., cooks, waiters, a manager), capital (i.e., ovens, counters, tables, chairs, and a building), and land. In the short run, the owner of the restaurant will optimize production by employing a variable amount of __________ given a fixed amount of __________.
Question 7 Which is the best example of diseconomies of scale?
Question 8 Refer to the accompanying graph to answer the questions that follow. If the firm depicted in the graph had to pay higher rent to its landlord, we would expect its __________ curve to shift __________.
Question 9 Refer to the following graph to answer the questions that follow. The firm is experiencing diminishing marginal product beyond what level of output along the marginal cost curve?
Question 10 Use the following graph to answer the questions that follow. If the firm expanded its scale of production and found that its average costs increased, which of the curves would reflect this situation?
Question 11 Which is the best example of economies of scale?
Question 12 Economists consider both explicit and implicit costs when measuring economic profit. The reason they consider implicit costs is that:
Question 13 When firms grow larger, they sometimes add many additional layers of managers between the top executives and the entrylevel employees. Because these managers do not actually produce any output themselves, we expect more layers of management to lead to:
Question 14 The change in total output divided by the change in input is known as:
Question 15 If a firm’s longrun average total costs increase as it increases its scale of production, the firm is experiencing:
Question 16 If the marginal product of labor for a firm decreases as more workers are hired, we know that:
Question 17 In the accompanying table, diminishing marginal product begins after the:
Question 18 If a firm hires another worker and her marginal product of labor is positive, we know that the firm’s total output is:
Question 19 Nathan owns a coffeeroasting company. If he increases the size of his company and experiences constant returns to scale as a result, his longrun average total cost curve should be:
Question 20 In the accompanying table, diminishing marginal product begins after the: