Placement Economics Microeconomics
UNIT
3
Microeconomics
MULTIPLE-CHOICE
SAMPLE QUESTIONS
Sample Multiple-Choice Questions
Circletheletterofeachcorrectanswer.
1. True statements about the theory of the firm in the short run and long run include which of the following?
I. All input costs are fixed in the short run.
II. All input costs are variable in the long run.
III. At least one input price is fixed in the short run. (A) I only
(B) II only
(C) III only
(D) I and II only
(E) II and III only
3. Whichofthefollowingstatementsabouta firm’s production function are true?
I. When total product is at its maximum, marginal product is zero.
II. When total product rises, marginal product is rising.
III. When marginal product is greater than average product, average product is rising.
IV. Whenmarginalproductislessthanaverage product, average product is falling.
(A) I and II only
(B) II and III only
(C) II and IV only
(D) I, III and IV only
(E) I, II, III and IV
TP
MP AP ABCDE
INPUT
Q Q1
LRATC
Q2 Q3
OUTPUT
2. Onthegraphabove,theonsetofdiminishing marginal returns occurs beyond
(A) Point A. (B) Point B. (C) Point C. (D) Point D. (E) Point E.
4. Accordingtographabove,ifthefirmisproduc- ing any quantity greater than Q2, the firm is experiencing
(A) economies of scale.
(B) minimum efficient scale. (C) diseconomies of scale. (D) constant returns.
(E) increasing returns.
Advanced Placement Economics Microeconomics: Student Activities © National Council on Economic Education, New York, N.Y. 203
OUTPUT
COSTS
UNIT
3
Microeconomics
5. Foraperfectlycompetitivefirm,ifthemarket price is $8 then
(A) marginal revenue is greater than $8. (B) marginal revenue is less than $8. (C) marginal revenue is equal to $8. (D) average revenue is greater than $8. (E) average revenue is less than $8.
6. A firm’s short-run marginal cost curve will eventually increase because of
(A) more efficient production. (B) economies of scale.
(C) diseconomies of scale.
(D) diminishing
3
Microeconomics
MULTIPLE-CHOICE
SAMPLE QUESTIONS
Sample Multiple-Choice Questions
Circletheletterofeachcorrectanswer.
1. True statements about the theory of the firm in the short run and long run include which of the following?
I. All input costs are fixed in the short run.
II. All input costs are variable in the long run.
III. At least one input price is fixed in the short run. (A) I only
(B) II only
(C) III only
(D) I and II only
(E) II and III only
3. Whichofthefollowingstatementsabouta firm’s production function are true?
I. When total product is at its maximum, marginal product is zero.
II. When total product rises, marginal product is rising.
III. When marginal product is greater than average product, average product is rising.
IV. Whenmarginalproductislessthanaverage product, average product is falling.
(A) I and II only
(B) II and III only
(C) II and IV only
(D) I, III and IV only
(E) I, II, III and IV
TP
MP AP ABCDE
INPUT
Q Q1
LRATC
Q2 Q3
OUTPUT
2. Onthegraphabove,theonsetofdiminishing marginal returns occurs beyond
(A) Point A. (B) Point B. (C) Point C. (D) Point D. (E) Point E.
4. Accordingtographabove,ifthefirmisproduc- ing any quantity greater than Q2, the firm is experiencing
(A) economies of scale.
(B) minimum efficient scale. (C) diseconomies of scale. (D) constant returns.
(E) increasing returns.
Advanced Placement Economics Microeconomics: Student Activities © National Council on Economic Education, New York, N.Y. 203
OUTPUT
COSTS
UNIT
3
Microeconomics
5. Foraperfectlycompetitivefirm,ifthemarket price is $8 then
(A) marginal revenue is greater than $8. (B) marginal revenue is less than $8. (C) marginal revenue is equal to $8. (D) average revenue is greater than $8. (E) average revenue is less than $8.
6. A firm’s short-run marginal cost curve will eventually increase because of
(A) more efficient production. (B) economies of scale.
(C) diseconomies of scale.
(D) diminishing