Question

erences Mailings Review View Help Tell me what you want to do 1. Which of the following is true before a firm has reached the point of diminishing returns? a) marginal product is negative b) marginal product is rising, but still positive c) average product is declining d) average product may be rising or declining e) both a) and c) are correct 2. Whenever the slope of the total product curve is increasing at an increasing rate, the marginal product curve is a) positive and rising b) positive and falling c) negative and falling d) negative and rising 3. Suppose a firm is currently producing 20 units of output (Q). If the average fixed cost incurred at that level of output is $2.50, then what must be this firm's total fixed cost? a) $0; the firm is not incurring a fixed cost b) between $0 and $30 c) between $30 and 560 d) between $60 and 590 e) greater than $90 4. Which of the following statements is true? a) Technological efficiency implies economic efficiency b) Economic efficiency implies technological efficiency C) Technological efficiency and economic efficiency are the same thing. ficiency is an ideal and can never be practically achieved in a production process.

Answer 1

1.

B

Before marginal return becomes diminishing, the marginal product is rising and positive.

2.

A

MP curve is positive and rising, when total product increases with increasing rate.

3.

C

Total fixed cost = 20*2.5 = $50 .

4.

B

Economic efficiency leads to the creation of technological efficiency.

5.

E

It is a case of economy of scale as well as increasing return to scale.