Ch.20 Quiz

Instructions
Please read the questions carefully.

This assessment is worth 100 points.

  1. If marginal output is rising it is possible to have   (5 points)

    a.  
    b.  
    c.  
    d.  

  2. The phrase "spreading the overhead" refers to   (5 points)

    a.  
    b.  
    c.  
    d.  

  3. A firm has a fixed cost of $2,000, and at an output of one, variable cost is $1,500. How much is marginal cost at an output of 1?   (5 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  4. Marginal cost may be defined as   (5 points)

    a.  
    b.  
    c.  
    d.  

  5. Jimmy, Walter, Mike, and Bill run a school for political candidates. The school has fixed costs of $10 million, variable costs of $4 million, and sales of $15 million. In the short run the school will _____ and in the long run the school will ____.   (5 points)

    a.  
    b.  
    c.  
    d.  

  6. Which of the following cost curves will NOT shift downward if the price of a variable input decreases?   (5 points)

    a.  
    b.  
    c.  
    d.  

  7. Statement I: As output rises, average fixed cost declines.

    Statement II: The marginal cost curve intersects the average variable cost curve at the minimum point of the average variable cost curve.   (5 points)

    a.  
    b.  
    c.  
    d.  

  8. Which statement is false?   (5 points)

    a.  
    b.  
    c.  
    d.  




  9. Use the above table and assume a fixed cost of $200.

    At an output of 3, AVC is   (5 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  10. Statement I: In the short run output can be varied by changing the size of factories.

    Statement II: The MC curve intersects the AVC and ATC curves at their minimum points most of the time.   (5 points)

    a.  
    b.  
    c.  
    d.  



  11. The MC curve is curve   (5 points)

    a.  
    b.  
    c.  
    d.  

  12. Statement I: Average total cost can be found by dividing total cost into output.

    Statement II: At one unit of output marginal cost is always zero.   (5 points)

    a.  
    b.  
    c.  
    d.  

  13. Statement I: Average variable cost can be found by dividing variable cost into output.

    Statement II: At an output of zero, total cost is always equal to fixed cost.   (5 points)

    a.  
    b.  
    c.  
    d.  

  14. Corporate bureaucracies are associated   (5 points)

    a.  
    b.  
    c.  
    d.  

  15. Statement I: Variable costs vary with output.

    Statement II: Fixed costs don't vary with output.   (5 points)

    a.  
    b.  
    c.  
    d.  

  16. Statement I: When ATC is falling, MC is greater than ATC.

    Statement II: When output is zero, variable cost is zero.   (5 points)

    a.  
    b.  
    c.  
    d.  

  17. Economies and diseconomies of scale explain   (5 points)

    a.  
    b.  
    c.  
    d.  

  18. Statement I: There is no such thing as a fixed cost.

    Statement II: When output is 0, total cost equals fixed cost.   (5 points)

    a.  
    b.  
    c.  
    d.  

  19. Statement I: At an output of 0, variable cost is always 0.

    Statement II: Total cost less fixed cost equals variable cost.   (5 points)

    a.  
    b.  
    c.  
    d.  

  20. Each of the following industries takes great advantage of economies of scale except   (5 points)

    a.  
    b.  
    c.  
    d.  
    e.  



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