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Questions and Answers
What is the law of diminishing marginal returns?
What is the law of diminishing marginal returns?
- Increases in the variable input increase the total product.
- Increases in the fixed input increase the total product.
- Increases in the fixed input reduce the total product.
- Increases in the variable input reduce the total product. (correct)
Which of the following is a characteristic of a market with economies of scale?
Which of the following is a characteristic of a market with economies of scale?
- Constant returns to scale
- Downward-sloping long-run average cost curve (correct)
- Upward-sloping long-run average cost curve
- Decreasing returns to scale
When should we use relatively more labor?
When should we use relatively more labor?
- When the marginal product per dollar of labor expenditures is less than a marginal product per dollar of capital expenditures.
- When the cost of labor is higher than the cost of capital.
- When the cost of labor is lower than the cost of capital.
- When the marginal product per dollar of labor expenditures is greater than a marginal product per dollar of capital expenditures. (correct)
If a firm has increasing returns to scale, what happens when all inputs are increased by 1%?
If a firm has increasing returns to scale, what happens when all inputs are increased by 1%?
What happens to output when a firm has increasing returns to scale?
What happens to output when a firm has increasing returns to scale?
Which of the following is true of monopolistic competition and perfect competition?
Which of the following is true of monopolistic competition and perfect competition?
What is the long-run average cost curve when production displays economies of scale?
What is the long-run average cost curve when production displays economies of scale?
What is the value of the four-firm concentration ratio that indicates the existence of an oligopoly in a particular industry?
What is the value of the four-firm concentration ratio that indicates the existence of an oligopoly in a particular industry?
Will more experienced workers demand higher wages over time?
Will more experienced workers demand higher wages over time?
Which of the following is an example of price discrimination?
Which of the following is an example of price discrimination?
What is the profit-maximizing output level in Figure 13-8?
What is the profit-maximizing output level in Figure 13-8?
What is the "free-rider" problem associated with public goods?
What is the "free-rider" problem associated with public goods?
What is the reason why cartels often break down?
What is the reason why cartels often break down?
When is a firm likely to be a natural monopoly?
When is a firm likely to be a natural monopoly?
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Description
Test your knowledge of production theory with this quiz! From the law of diminishing marginal returns to determining the most cost-effective input, this quiz covers essential concepts in economics. Challenge yourself and see how much you know about production theory.
