Marginal revenue (MR) is ____________ when total revenue is maximized.
a. greater than one
b. equal to one
c. less than zero
d. equal to zero
e. equal to minus one
When demand is _____________ a percentage change in ___________ is exactly offset by the same percentage change in _____________ demanded, the net result being a constant total consumer expenditure.
a. elastic; price; quantity
b. unit elastic; price; quantity
c. inelastic; quantity; price
d. inelastic; price; quantity
e. none of the above
Consumer expenditure plans is an example of a forecasting method. Which of the general categories best described this example?
a. time-series forecasting techniques
b. barometric techniques
c. survey techniques and opinion polling
d. econometric techniques
e. input-output analysis
The isoquants for inputs that are perfect complements for one another consist of a series of:
right angles.
parallel lines.
concentric circles.
right triangles.
1. What method of inventory valuation should be used for economic decision-making problems?
a. book value
b. original cost
c. current replacement cost
d. cost or market, whichever is lower
e. historical cost
2. According to the theory of cost, specialization in the use of variable resources in the short-run results initially in:
a. decreasing returns, and declining average and marginal costs
b. increasing returns, and declining average and marginal costs
c. increasing returns, and increasing average and marginal costs
d. decreasing returns, and increasing average and marginal costs
e. none of the above
3. For a short-run cost function which of the following statements is (are) not true?
a. The average fixed cost function is monotonically decreasing.
b. The marginal cost function intersects the average fixed cost function where the average variable cost function is a minimum.
c. The marginal cost function intersects the average variable cost function where the average variable cost function is a minimum.
d. The marginal cost function intersects the average total cost function where the average total cost function is a minimum.
e. b and c
4. The cost function is:
a. a means for expressing output as a function of cost
b. a schedule or mathematical relationship showing the total cost of producing various quantities of output
c. similar to a profit and loss statement
d. incapable in being developed from statistical regression analysis
5. Which of the following statements about cost functions is true?
a. Variable costs will always increase in direct proportion to the quantity of output produced.
b. The less capital equipment employed in the production process relative to labor and other inputs, the longer will be the period of time required to increase significantly the scale of operation.
c. The shape of the firm's long-run cost function is important in decisions to expand the scale of operations.
d. none of the above
6. Which of the following statements concerning the long-run average cost curve of economic theory is (are) not true?
a. it is L-shaped
b. it consists of the lower boundary of all the (infinitely many) short-run curves
c. the long-run average cost of producing any given level of output, in general, occurs at the point where short-run average costs are minimized
d. a and b
e. a and c
7. Possible sources of economies of scale (size) within a production plant include:
a. specialization in the use of capital and labor
b. imperfections in the labor market
c. transportation costs
d. a and b
e. a and c
8. The existence of diseconomies of scale (size) for the firm is hypothesized to result from:
a. transportation costs
b. imperfections in the labor market
c. imperfections in the capital markets
d. all of the above
e. none of the above
9. The relevant cost in economic decision-making is the opportunity cost of the resources rather than the outlay of funds required to obtain the resources.
a. true
b. false