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Production and Costs MCQ

Constant returns to scale are features of a firm's technology that _______.

Make average total cost rise as output increases

Drive average total cost to zero

Keep average total cost constant as output increases

Make average total cost fall as output increases

Answer

Correct Answer: Keep average total cost constant as output increases

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During the progressive era, economic production shifted from to .

Capital goods, consumer products.

Consumer products , Capital goods.

Both a and b

None of above

Answer

Correct Answer: Capital goods, consumer products.

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The __________ function will return the number of characters in a given string.

Concatenation

Length_Of()

Consecutive

Element

Answer

Correct Answer: Length_Of()

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What do economists call the cost disadvantages that occur in an output range where LRATC rises as output expands?

Diseconomies of scale

Minimum efficient scales

Constant returns to scale

Economies of scale

Answer

Correct Answer: Diseconomies of scale

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When LRATC falls as output expands, ______.

The cost of one more unit of output rises

Minimum efficient scale has been reached

Economies of scale are present

Marginal product is diminishing

Answer

Correct Answer: Economies of scale are present

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Business’s long-run average total cost curves are typically better than their short-run total cost curves because ______.

Their fixed costs decline over time

They can adjust more of their inputs in the long run

In the long run, their employees become more experienced

Constant returns to scale drive down variable costs

Answer

Correct Answer: They can adjust more of their inputs in the long run

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When ATC falls it is primarily because ______ is declining.

AVC

AFC

Output

Answer

Correct Answer: AFC

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Why is average total cost usually relatively high at very low levels of output?

High average fixed costs

High average variable costs

Diminishing marginal product

Increasing marginal product

Answer

Correct Answer: High average fixed costs

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When marginal product rises, ______ falls.

Total product

Quantity of labor

Marginal cost

Variable input

Answer

Correct Answer: Marginal cost

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What is shown in the equation ΔTC/Δq?

Total product

Marginal cost

Marginal product

Average cost

Answer

Correct Answer: Marginal cost

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What is average total cost?

A profitability measurement

An assessment of productivity

An estimate of economic profits

A per-unit cost of production

Answer

Correct Answer: A per-unit cost of production

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What are the two categories of short-run costs in a business?

Fixed costs and explicit costs

Fixed costs and variable costs

Variable costs and explicit costs

Sunk costs and implicit costs

Answer

Correct Answer: Fixed costs and variable costs

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What do economists mean by production function?

The per-unit cost of inputs compared to the sale price of outputs

The correlation between marginal product and marginal costs

The balance between economic profits and accounting profits

The relationship between quantity of inputs and quantity of outputs

Answer

Correct Answer: The relationship between quantity of inputs and quantity of outputs

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One way an increase in workers can increase marginal product is that it ______.

Increases revenue from sales

Allows workers to specialize

Raises per-unit fixed costs

Lowers the output per worker

Answer

Correct Answer: Allows workers to specialize

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In terms of production, what do economists mean by the short run?

The time from the opening of a business to its first profits

A period too brief for some production inputs to be varied

The period during which initial staff is hired and trained

The length original equipment is expected to last

Answer

Correct Answer: A period too brief for some production inputs to be varied

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What do economists call expenses that have been incurred and cannot be recovered?

Sunk costs

Marginal costs

Implicit costs

Indirect costs

Answer

Correct Answer: Sunk costs

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Which of the following is TRUE?

An accounting profit is less than an economic profit.

An economic profit is less than an accounting profit.

Economic profits do not consider implicit costs.

Accounting profits do not consider explicit costs.

Answer

Correct Answer: An economic profit is less than an accounting profit.

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What are implicit costs?

Variable costs that impact long-run average total costs

Production costs related to equipment but not materials

Administration costs that do not impact production

Production costs that do not require an outlay of money

Answer

Correct Answer: Production costs that do not require an outlay of money

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Costs that vary with the level of output are variable costs.

True

False

Answer

Correct Answer: True

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The total output of a good produced by the firm is the total product.

True

False

Answer

Correct Answer: True

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The _____ of the firm’s fixed costs and variable costs is total cost.

Sum

Difference

Product

Division

Answer

Correct Answer: Sum

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Sunk costs can’t be _____.

Reproduced

Recovered

Produced

None of the above

Answer

Correct Answer: Recovered

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A period too brief for some production inputs to be varied is known as

Long Run

Short Run

Small Run

Brief Run

Answer

Correct Answer: Short Run

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______ is the difference between total revenues and total costs

Profits

Losses

Accounts

Assets

Answer

Correct Answer: Profits

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_____ function is The relationship between the quantity of inputs and outputs produced

Consumption

Production

Profit

Variable

Answer

Correct Answer: Production

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Marginal product is The change in total output of a good that results from a ______ change

Multi - Unit

One - unit

Two - Unit

Zero - Unit

Answer

Correct Answer: One - unit

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Change in total costs resulting from a _____ in output is called Marginal cost

Multi - Unit change

One - unit change

Two - Unit change

Zero - Unit change

Answer

Correct Answer: One - unit change

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A period over which all production inputs are variable is called

Long Run

Short Run

Small Run

Production Run

Answer

Correct Answer: Long Run

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The costs of production that do not require a monetary payment is ______

Implicit costs

Fixed costs

Explicit costs

Variable Costs

Answer

Correct Answer: Implicit costs

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_______ Costs are the Costs that do not vary with the level of output.

Implicit costs

Fixed costs

Explicit costs

Variable Costs

Answer

Correct Answer: Fixed costs

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Opportunity costs of production that require a monetary payment is known as

Implicit costs

Fixed costs

Explicit costs

Variable Costs

Answer

Correct Answer: Explicit costs

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______ falls as output increases in Economies of scale.

LRATC

SRATC

LRAFC

SRAFC

Answer

Correct Answer: LRATC

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Economic profits is Total revenues minus

Implicit costs

Explicit Costs

None of These

Both of These

Answer

Correct Answer: Both of These

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______ rises as output expands in Diseconomies of scale.

SRATC

LRATC

LRAFC

SRAFC

Answer

Correct Answer: LRATC

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Diminishing marginal product variable input , with other inputs .

Fixed,Increases

Increases,Fixed

Decreases,Fixed

Fixed,Decreases

Answer

Correct Answer: Increases,Fixed

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Constant returns to scale are Returns that occur in an output range where _____ does not change.

SRATC

LRATC

LRAFC

SRAFC

Answer

Correct Answer: LRATC

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Average variable cost is ________ divided by output

Fixed Cost

Variable Cost

Total Cost

Explicit Cost

Answer

Correct Answer: Variable Cost

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Average total cost is ________ divided by output

Fixed Cost

Variable Cost

Total Cost

Explicit Cost

Answer

Correct Answer: Total Cost

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Average fixed cost is ________ divided by output

Fixed Cost

Variable Cost

Total Cost

Explicit Cost

Answer

Correct Answer: Fixed Cost

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Accounting profits are Total revenues minus total _______

Implicit costs

Explicit Costs

None of These

Both of These

Answer

Correct Answer: Explicit Costs

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Related MCQs

Production and Costs MCQ

Constant returns to scale are features of a firm's technology that _______.

During the progressive era, economic production shifted from ____ to ____.

The __________ function will return the number of characters in a given string.

What do economists call the cost disadvantages that occur in an output range where LRATC rises as output expands?

When LRATC falls as output expands, ______.

Business’s long-run average total cost curves are typically better than their short-run total cost curves because ______.

When ATC falls it is primarily because ______ is declining.

Why is average total cost usually relatively high at very low levels of output?

When marginal product rises, ______ falls.

What is shown in the equation ΔTC/Δq?

What is average total cost?

What are the two categories of short-run costs in a business?

What do economists mean by production function?

One way an increase in workers can increase marginal product is that it ______.

In terms of production, what do economists mean by the short run?

What do economists call expenses that have been incurred and cannot be recovered?

Which of the following is TRUE?

What are implicit costs?

Costs that vary with the level of output are variable costs.

The total output of a good produced by the firm is the total product.

The _____ of the firm’s fixed costs and variable costs is total cost.

Sunk costs can’t be _____.

A period too brief for some production inputs to be varied is known as

______ is the difference between total revenues and total costs

_____ function is The relationship between the quantity of inputs and outputs produced

Marginal product is The change in total output of a good that results from a ______ change

Change in total costs resulting from a _____ in output is called Marginal cost

A period over which all production inputs are variable is called

The costs of production that do not require a monetary payment is ______

_______ Costs are the Costs that do not vary with the level of output.

Opportunity costs of production that require a monetary payment is known as

______ falls as output increases in Economies of scale.

Economic profits is Total revenues minus

______ rises as output expands in Diseconomies of scale.

Diminishing marginal product variable input ____, with other inputs ____.

Constant returns to scale are Returns that occur in an output range where _____ does not change.

Average variable cost is ________ divided by output

Average total cost is ________ divided by output

Average fixed cost is ________ divided by output

Accounting profits are Total revenues minus total _______

During the progressive era, economic production shifted from to .

Diminishing marginal product variable input , with other inputs .