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What is the correct answer for the total product constraint mentioned?
What is the correct answer for the total product constraint mentioned?
What does a steeper slope of the total product curve indicate?
What does a steeper slope of the total product curve indicate?
At which point does Tania achieve maximum average product?
At which point does Tania achieve maximum average product?
Which statement about average product and marginal product is true?
Which statement about average product and marginal product is true?
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Diminishing marginal returns occurs when the marginal product of an additional worker is less than what?
Diminishing marginal returns occurs when the marginal product of an additional worker is less than what?
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The law of diminishing marginal returns states that as a firm uses more of a variable factor of production, what happens?
The law of diminishing marginal returns states that as a firm uses more of a variable factor of production, what happens?
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When does the average product curve begin to fall?
When does the average product curve begin to fall?
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In the context of factors of production, what happens as the size of a firm's plant increases?
In the context of factors of production, what happens as the size of a firm's plant increases?
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Which curve represents the average total cost for the largest of the four plant sizes?
Which curve represents the average total cost for the largest of the four plant sizes?
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Which plant has the lowest average total cost for an output rate of 5 sweaters a day?
Which plant has the lowest average total cost for an output rate of 5 sweaters a day?
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An increase in production from Q1 to Q2 sweaters per day produces which of the following?
An increase in production from Q1 to Q2 sweaters per day produces which of the following?
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What does the marginal product of labor represent?
What does the marginal product of labor represent?
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Which statement is false regarding the long-run average total cost curve?
Which statement is false regarding the long-run average total cost curve?
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Given an increase in output from Q1 to Q2, what is the situation?
Given an increase in output from Q1 to Q2, what is the situation?
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Which statement accurately describes the relationship between the points on Tania's total product curve?
Which statement accurately describes the relationship between the points on Tania's total product curve?
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At which worker does marginal product reach its maximum based on Tania's total product curve?
At which worker does marginal product reach its maximum based on Tania's total product curve?
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When should a firm consider increasing its scale of plant?
When should a firm consider increasing its scale of plant?
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Which of the following statements about points below Tania's total product curve is true?
Which of the following statements about points below Tania's total product curve is true?
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At what level of output do diseconomies of scale generally occur?
At what level of output do diseconomies of scale generally occur?
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What happens to average total cost as production increases from Q1 to Q2?
What happens to average total cost as production increases from Q1 to Q2?
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When does average product of labor reach its maximum?
When does average product of labor reach its maximum?
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What is true about the cost of producing at different points on Tania's total product curve?
What is true about the cost of producing at different points on Tania's total product curve?
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In Tania's total product curve, which interval produces the highest marginal product?
In Tania's total product curve, which interval produces the highest marginal product?
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Which of the following statements is false regarding production efficiency?
Which of the following statements is false regarding production efficiency?
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What is the value of A in the marginal product row of Table 11.2.3?
What is the value of A in the marginal product row of Table 11.2.3?
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Where does the maximum value of marginal product occur in Table 11.2.3?
Where does the maximum value of marginal product occur in Table 11.2.3?
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When does the maximum value of average product occur in Table 11.2.3?
When does the maximum value of average product occur in Table 11.2.3?
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According to Table 11.2.4, when do diminishing marginal returns begin?
According to Table 11.2.4, when do diminishing marginal returns begin?
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In Table 11.2.3, what is the average product when 5 workers are employed?
In Table 11.2.3, what is the average product when 5 workers are employed?
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In Table 11.2.3, what does the marginal product of 1 represent for 8 workers?
In Table 11.2.3, what does the marginal product of 1 represent for 8 workers?
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What is the total production when 4 workers are hired in Table 11.2.4?
What is the total production when 4 workers are hired in Table 11.2.4?
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Which concept describes the decrease in additional output produced when more labor is added?
Which concept describes the decrease in additional output produced when more labor is added?
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How many rubber boats are produced when employing 6 workers in Table 11.2.3?
How many rubber boats are produced when employing 6 workers in Table 11.2.3?
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What happens when the marginal product of labor is less than the average product of labor?
What happens when the marginal product of labor is less than the average product of labor?
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In the scenario where output increases from 100 to 110 units upon hiring the 7th worker, and from 110 to 118 units upon hiring the 8th worker, what does this illustrate?
In the scenario where output increases from 100 to 110 units upon hiring the 7th worker, and from 110 to 118 units upon hiring the 8th worker, what does this illustrate?
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What is the marginal product of the third worker if output rises from 64 to 80 customers served in one hour?
What is the marginal product of the third worker if output rises from 64 to 80 customers served in one hour?
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When the marginal product of labor is greater than the average product of labor, what is expected to happen to the average product?
When the marginal product of labor is greater than the average product of labor, what is expected to happen to the average product?
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What generally occurs in a firm experiencing diminishing marginal returns?
What generally occurs in a firm experiencing diminishing marginal returns?
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If a firm's total product curve is negatively sloped, what can be inferred about its marginal product?
If a firm's total product curve is negatively sloped, what can be inferred about its marginal product?
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Which of the following indicates the result of hiring too many workers in production?
Which of the following indicates the result of hiring too many workers in production?
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What happens to average total cost (ATC) when marginal cost (MC) is below ATC?
What happens to average total cost (ATC) when marginal cost (MC) is below ATC?
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If the average fixed cost (AFC) is decreasing, what can be inferred about the total fixed cost?
If the average fixed cost (AFC) is decreasing, what can be inferred about the total fixed cost?
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What is the marginal cost (MC) associated with producing an additional unit when total cost increases from $200 to $310?
What is the marginal cost (MC) associated with producing an additional unit when total cost increases from $200 to $310?
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In the context of cost curves, what does it indicate if average total cost (ATC) is rising?
In the context of cost curves, what does it indicate if average total cost (ATC) is rising?
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What occurs to the average total cost (ATC) curve if factor prices rise?
What occurs to the average total cost (ATC) curve if factor prices rise?
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If the marginal cost curve is rising, what can be said about the behavior of average total cost (ATC)?
If the marginal cost curve is rising, what can be said about the behavior of average total cost (ATC)?
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Which statement best describes a scenario of fixed costs?
Which statement best describes a scenario of fixed costs?
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What results in the upward slope of the marginal cost (MC) curve?
What results in the upward slope of the marginal cost (MC) curve?
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Study Notes
Decision Time Frames
- The short run is a timeframe where at least one factor of production is fixed.
- The long run is a timeframe where all factors of production can be varied.
- Plant refers to factors of production that are fixed in the short run.
- The short run is typically one year or less, where some factors are fixed and others are variable.
- The long run is the time period needed to adjust all inputs and outputs.
Short-Run Technology Constraint
- Total product curve illustrates the maximum output for varying amounts of labor.
- Points above the curve are unattainable (or inefficient)
- Points below the curve are attainable but inefficient
- Points on the curve are attainable and efficient
- Marginal product reaches a maximum when the rate of increase in output diminishes with each added worker
- The total product curve shows the maximum output attainable for different levels of inputs (workers)
Short-Run Cost
- Total cost (TC) is the sum of total fixed cost (TFC) and total variable cost (TVC).
- Average fixed cost (AFC) is TFC divided by output.
- Average variable cost (AVC) is TVC divided by output.
- Average total cost (ATC) is TC divided by output (or AFC + AVC).
- Marginal cost (MC) is the change in total cost from producing one more unit of output.
- The marginal cost curve is typically U-shaped, as increasing or decreasing returns to scale begin to occur.
Long-Run Cost
- The long-run average cost (LRAC) curve shows the lowest cost at which a given level of output can be produced.
- Economies of scale occur when the LRAC curve slopes downward.
- Diseconomies of scale occur when the LRAC curve slopes upward.
- Constant returns to scale occur when the LRAC curve is horizontal.
- The minimum efficient scale is the output at which the LRAC curve reaches its minimum point.
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Description
Test your knowledge on production theory with this quiz focusing on total product constraints, average and marginal products, and the law of diminishing returns. Answer questions about plant sizes and average total costs to solidify your understanding of key concepts in production economics.
