Refer to the above table. There are increasing marginal returns through the:

A.	first unit of variable input.

B.	second unit of variable input.

C.	third unit of variable input.

D.	fourth unit of variable input.

R-2 REF 22-51

At what point in the graph above does the law of diminishing returns set in?

A.

point A

B.

point B

C.

point C

D.

point D

R-3 REF 22-52

Which of the above properly depicts the relationships TP, AP, and MP?

A.

graph A

B.

graph B

C.

graph C

D.

graph D

R-4 REF 22-53

At which point is marginal product smallest?

A.

point a

B.

point b

C.

point c

D.

point d

R-5 REF 22-54

In the above product schedule, marginal product will be zero for which level of input?

A.

A

B.

B

C.

C

D.

D

Refer to the above table. The total variable cost of producing 5 units is:

A.

$10.

B.

$14.60.

C.

$63.

D.

$73.

R-7 REF 22-73

Refer to the above graph. Total fixed cost is measured by:

A.

0B.

B.

AC.

C.

CD.

D.

DE.

Refer to the above table. If output is zero, total cost is:

A.

$90.

B.

$50.

C.

$40.

D.

$0.

R-9 REF 22-92

At which point of the graph above is the MP the greatest?

A.

point A

B.

point B

C.

point C

D.

point D

R-10 REF 22-93

Looking at the graph above, if labor is the only variable input:

A.	optimal level of output is at point a.

B.	average fixed costs are lowest at point c.

C.	marginal costs are at their minimum, and the marginal productivity of labor is at its maximum, at point a.

D.	average product of labor is at its minimum, and average variable costs are therefore at their minimum, at point b.

R-11 REF 22-94

Based on the diagram above, which of the following statements is true?

A.	Average total cost at Q2 is the slope of line 0A.

B.	Average total cost at Q1 is the slope of line AB.

C.	Marginal cost at Q2 is the slope of line CB.

D.	Marginal cost at Q1 is the slope of line 0A.

R-12 REF 22-107

Refer to the above graph. If the firm is producing at Q1, the area 0 BEQ1 represents:

A.	total costs.

B.	total variable costs.

C.	total fixed costs.

D.	average variable costs.

R-13 REF 22-111

Which of the graphs above is correct?

A.

A

B.

B

C.

C

D.

D

R-14 REF 22-122

"The bigger the volume, the lower the cost, and we pass these savings on to you" is a familiar slogan. It implies the situation shown in the above graph:

A.

A.

B.

B.

C.

C.

D.

D.

R-15 REF 22-134

In the diagram above LRTC = long-run total costs. The firm is experiencing:

A.	economies of scale.

B.	diseconomies of scale.

C.	constant returns to scale.

D.	minimum efficient scale.

R-16 REF 22-139

Just after World War II the Ford Motor Company opened a large automobile manufacturing facility near Detroit with capacity Q0 autos per year. Shortly thereafter, the plant was closed and two smaller ones were opened in the same vicinity, each more profitably producing about one-half as many cars as the old facility. Of the long-run average total cost (LRATC) graphs above, which one best shows the initial situation described above, when only one plant was operating?

A.

graph A

B.

graph B

C.

graph C

D.

graph D

Refer to the above table. Which plant size would produce at least cost for the 3000-4000 level of output?

A.

1

B.

2

C.

3

D.

4

R-18 REF 22-148

Which of the figures above correctly depicts a firm which does not experience diseconomies of scale?

A.

graph A

B.

graph B

C.

graph C

D.

graph D

R-19 REF 22-149

In the figure above, the long-run average total cost curve (LRATC) indicates that there are diseconomies of scale:

A.	to the left of point A.

B.	to the right of point B.

C.	at points A and B .

D.	between points A and B.

R-20 REF 22-157

In the graph above, minimum efficient scale occurs at:

A.

Q1.

B.

Q2.

C.

Q3.

D.

Q4.