Managerial Economics Quiz Chapter 8
Questions With All Correct & Verified
Answers
If a firm is producing a given level of output in a technically-efficient manner, then it must be the case
that... Correct answer-this output level is the most that can be produced with the given levels of
inputs.
Which of the following statements is TRUE? Correct answer-Fixed costs are sunk costs.
Which of the following statements is TRUE about quasi-fixed inputs? Correct answer-None is
purchased when output is zero
If average product is decreasing, then marginal product... Correct answer-must be less than
average product
Which of the following statements is TRUE? Correct answer-In the long run all inputs are variable.
Suppose you operate a sandwich shop and currently have two employees. If you hire a third
employee, your output of sandwiches per day rises from 75 to 90. If you hire a fourth employee,
output rises to 110 per day. A fifth and sixth employee would cause output to rise to 120 and 125 per
day, respectively. Choose the correct statement: Correct answer-Diminishing returns set in with the
hiring of the fifth worker.
Marginal cost... Correct answer-is less than average cost when average cost is decreasing.
The following graph shows the marginal and average product curves for labor, the firm's only variable
input. The monthly wage for labor is $2,000. Fixed cost is $120,000.
At what output does the firm reach minimum average variable cost? Correct answer-$8,000
The following graph shows the marginal and average product curves for labor, the firm's only variable
input. The monthly wage for labor is $2,000. Fixed cost is $120,000.
What is AVC at its minimum? Correct answer-$25
The following graph shows the marginal and average product curves for labor, the firm's only variable
input. The monthly wage for labor is $2,000. Fixed cost is $120,000.
When the firm uses 100 units of labor, what is marginal cost at this level of output? Correct
answer-$25
The following graph shows the marginal and average product curves for labor, the firm's only variable
input. The monthly wage for labor is $2,000. Fixed cost is $120,000.
Questions With All Correct & Verified
Answers
If a firm is producing a given level of output in a technically-efficient manner, then it must be the case
that... Correct answer-this output level is the most that can be produced with the given levels of
inputs.
Which of the following statements is TRUE? Correct answer-Fixed costs are sunk costs.
Which of the following statements is TRUE about quasi-fixed inputs? Correct answer-None is
purchased when output is zero
If average product is decreasing, then marginal product... Correct answer-must be less than
average product
Which of the following statements is TRUE? Correct answer-In the long run all inputs are variable.
Suppose you operate a sandwich shop and currently have two employees. If you hire a third
employee, your output of sandwiches per day rises from 75 to 90. If you hire a fourth employee,
output rises to 110 per day. A fifth and sixth employee would cause output to rise to 120 and 125 per
day, respectively. Choose the correct statement: Correct answer-Diminishing returns set in with the
hiring of the fifth worker.
Marginal cost... Correct answer-is less than average cost when average cost is decreasing.
The following graph shows the marginal and average product curves for labor, the firm's only variable
input. The monthly wage for labor is $2,000. Fixed cost is $120,000.
At what output does the firm reach minimum average variable cost? Correct answer-$8,000
The following graph shows the marginal and average product curves for labor, the firm's only variable
input. The monthly wage for labor is $2,000. Fixed cost is $120,000.
What is AVC at its minimum? Correct answer-$25
The following graph shows the marginal and average product curves for labor, the firm's only variable
input. The monthly wage for labor is $2,000. Fixed cost is $120,000.
When the firm uses 100 units of labor, what is marginal cost at this level of output? Correct
answer-$25
The following graph shows the marginal and average product curves for labor, the firm's only variable
input. The monthly wage for labor is $2,000. Fixed cost is $120,000.
