Diminishing marginal returns occur when ____________.

the firm hires cheap less-skilled workers in place of expensive high-skilled workers
the marginal product of an additional worker is less than the marginal product of the previous worker hired
the number of workers increase faster than the amount of capital equipment
more and more workers have to share the same capital equipment

Average total cost minus average variable cost ___________ as output increases because _____________ as output increases.

decreases; marginal returns diminish
decreases and then increases; marginal cost initially decreases and then increases
decreases; economies of scale are present
decreases; average fixed cost decreases

The output at which average product is a maximum is the same output at which ________ is a minimum.

average total cost
average variable cost
average fixed cost
marginal cost

The output at which average total cost is a minimum is _____________than the output at which _______________ is a minimum.

the same as; average variable cost
the same as; marginal product
less than; average variable cost
greater than; average variable cost

If marginal cost exceeds average total cost and output increases, average total cost ________ and average variable cost _____________.

decreases; increases
increases; decreases
decreases; decreases
increases; increases

If as output increases marginal cost exceeds average variable cost but is less than average total cost, average total cost ________ and average variable cost _____________.

increases; decreases
increases; increases
decreases; increases
decreases; decreases

The vertical distance between the total variable cost curve and the total cost curve _____________ as output increases; the vertical distance between average variable cost curve and the average total cost curve _____________ as output increases.

decreases; remains the same
is constant; becomes smaller
increases; becomes smaller at first but then increases
increases; remains the same

As output increases, total cost minus total fixed cost _____________.

increases more slowly as marginal returns diminish and then more quickly as marginal returns increase
increases more slowly as marginal returns increase and then more quickly as marginal returns diminish
decreases as marginal returns diminish and then remains constant
is constant

If the average total cost of producing 20 sweaters an hour falls when the firm doubles all its inputs, then all of the following are true except ________________.

the short-run average total cost curve shifts downward
the long-run average cost curve slopes downward
the firm experiences economies of scale
the firm moves along its short-run average total cost curve

If diseconomies of scale are present and the firm __________ all its inputs, its output ___________.

halves; more than halves
doubles; less than doubles
doubles; more than doubles
increases; increases by the same percentage

Please enter your name and press the SEND button