Topic 5. Fundamentals of the theory of production

If the price of a product is not sufficient to cover the average cost of producing it, then the firm must:

+ stop production as soon as possible

continue production of goods at the level where P=MC if P>AVC

choose new technology

reduce overhead costs

continue production until the price covers all fixed costs

A company is considered bankrupt if:

it is unable to meet the demands of creditors

his liabilities exceed his assets (property)

it is not creditworthy

+ Arbitration court declared him bankrupt

The production function shows:

+ the maximum output that the firm can produce with each individual combination of factors of production

marginal product of a variable resource

output per unit of time

volume of application of a variable resource

total production costs

The difference between the short term and the long term is that:

+ In the short run, some of the factors of production are constant, and in the long run, all factors of production are variable

in the long run, the reduction in average production costs occurs due to changes in the costs of both fixed and variable factors, in the short run – only variables

In the short run, the law of diminishing returns and economies of scale operate in different directions, and in the long run, they act in the same direction.

all answers are wrong

At the point of maximum total product:

marginal product is greater than average

average product curve reaches its maximum

+marginal product is zero

average product rises

the average product is zero

Law of diminishing returns in the long run:

+not applicable since all resources are variable

applicable only to capital

not applicable because it describes the dynamics of output associated with an increasingly intensive use of fixed production capacities

applicable if output is maintained at a constant level

Isoquant (equal product curve) characterizes:

+ all combinations of factors of production, the use of which gives the same output

growth in total output as labor grows at a fixed cost of capital

growth in total output as capital inputs increase with fixed labor inputs

is analogous to the indifference curve in consumption theory

The value of the marginal rate of technological substitution shows:

+ the ratio of changes in the costs of production factors while maintaining a constant volume of production

isoquant slope

degree of interchangeability of factors of production

the impossibility of substituting one factor of production for another

Increasing returns to scale (positive economies of scale) occur when:

the volume of production increases in proportion to the increase in costs

output growth lags behind growth in factor inputs

output stays the same and factor inputs increase

+ output outstrips cost growth

output growth rates lag behind resource input growth rates

Which of the following is not a source of economies of scale:

division and specialization of labor

growing productivity

advertising and marketing

+ rising resource prices

Under what conditions does the law of diminishing marginal productivity apply?

with proportional growth of all resources

provided that the supply of all resources of the producer is unlimited in the short run

+ provided that the cost of at least one resource does not change

with unlimited labor resources

The graph shows economies of scale:

To

+ increasing

constant

waning

the graph does not allow for definitive conclusions regarding economies of scale

Producer equilibrium is determined by the law:

equality of supply and demand

output maximization

+ equality of weighted marginal productivity of factors of production

minimizing the cost of production factors

If, with an increase in output, the slope of the total product curve increases, then the marginal product curve corresponding to this segment will be:

vertical

horizontal

+ have a positive slope

have a negative slope

The isoquant has:

positive slope

+ bulge facing the origin

convexity facing away from the origin

sinusoidal shape

The marginal rate of technical replacement of labor by capital is 2. To ensure the same volume of production while reducing the use of labor by 4 units, it is necessary to increase the use of capital:

by 1/2 units

+ by 2 units

for 8 units

more information needed

When marginal productivity rises, economies of scale:

+increases

decreases

constant

not enough data

With an increase in production, the isoquant will shift:

+up and right

down and right

up and left

down and left

The elasticity of demand for a resource depends on:

+ elasticity of demand for the product

ratio of marginal costs and total costs

labor productivity

transaction costs

The marginal rate of technical replacement of labor by capital is 1/2. In order to ensure the marginal output with an increase in capital by 4 units, it is necessary to reduce the use of labor:

+ by 2 units

for 4 units

for 8 units

more information needed

When marginal productivity falls, economies of scale:

increases

+decreases

constant

not enough data

The isocost unites the points:

+ equal costs

the same output

stable producer equilibrium

equality of supply and demand

The graph shows economies of scale:

increasing

constant

+ decreasing

the graph does not allow for definitive conclusions regarding economies of scale

With an increase in the price of capital at a constant price of labor, the slope of the isocost changes (it will be “linked” to the axis on which units of the factor of production with a constant price are plotted. What the producer will strive for:

reduce output while leaving resource costs unchanged

maintain output, leaving the amount of resources unchanged, but increasing the cost of them

maintain output by lowering average cost

+ to the equality of the ratio of marginal productivity and prices of production factors

increase output

Which of the following is characteristic only of a corporation:

involvement of hired managers

division of profits between the owners of the company

+payment of dividends

employment

An entrepreneur who is busy replicating video cassettes rents a room for 0.5 million rubles. in year; used by him own equipment worth 1 million rubles. wears out in a year. When he worked as a salesman in a technical goods store, his annual salary was 2.5 million rubles. in year; having gone into business, he began to receive income (accounting profit) in the amount of 4 million rubles. What are its external costs and economic profit if the real interest rate at Sberbank is approximately 100% per annum:

1.5 million, no economic profit

3 million; 4 million

0.5 million; 3.5 million

+0.5 million, no economic profit

At what price level will the firm whose costs are depicted in the graph stop producing:

only R 1

+ P 1 and P 2

R 1 , R 2 , R 3

at all indicated levels

A change in the price of one of the factors of production will affect the costs of the firm as follows:

average cost will change

marginal cost must change.

+ average and marginal costs will change

average costs will change and marginal cost will remain the same

The firm’s supply curve coincides with the curve:

average cost to the right of the marginal cost curve

average cost to the left of the marginal cost curve

+marginal cost above the average variable cost curve

marginal cost above the average total cost curve

Which of the following formula is correct:

accounting profit + internal costs = economic profit

economic profit – accounting profit = external cost

+ economic profit + internal costs = accounting profit

external costs + internal costs = revenue

Rewarding the entrepreneur for innovation is an element of:

only economic profit

only accounting profit

economic and normal profit

+ economic and accounting profit

A market constraint on a competitive firm is that:

revenue must exceed expenses

+ the market dictates a certain price level

the company does not have complete information about market conditions

revenue must be less than expenses

A short period in microeconomic theory is a period of time during which:

all factors are variable

all factors are constant

+ the company cannot change the size of its facilities, but can change the number of machines and equipment used

the firm cannot change either the size of its facilities or the number of machinery and equipment used

Opportunity cost is:

actual costs expressed in money

+ sum of actual and implicit costs

implicit costs accrued on the expenses of the firm

difference between actual and implicit costs

At what minimum price level will the firm, whose costs are shown in the graph, have revenues exceeding current costs:

R 4

R 3

R 2

+P 1

In the short run, a firm’s response to a small increase in the price of its product will be:

+ increase in output

increase in the volume of attracted capital funds

convening a council of experts to predict further possible price fluctuations in the market for this product

an attempt to pay workers the “old” wages until they find out about the increase in prices for the goods they produce

Variable factors of production are factors:

+ which can be changed quickly enough when changing output

which cannot be changed quickly enough when output changes

the price of which is unstable

the price of which cannot be controlled

Which formula correctly shows the ratio of accounting profit (BP); normal profit (NP) and net economic profit (NP), if there are no costs for the resources of the entrepreneur:

NP u003d BP + PE

+ BP u003d NP + PE

PE = BP – NP – external costs

BP = PE – NP

Marginal cost of the firm:

constantly increasing

may exceed total costs.

+equal to average costs at their minimum point

positive if total costs increase

Determine which of the following activities cannot be considered as a production process?

mining

transportation of radioactive waste

+ search by buyers in stores for scarce goods

buying up products and reselling them at a higher price

The construction of the pyramid of Cheops lasted more than 30 years. At the same time, the labor of free citizens of Ancient Egypt was used, who thus worked out labor service. Construction technology has not changed all this time. From the point of view of the theory of the firm, the period of construction of the pyramid can be called:

long-term

+short-term

permanent

BC

In the long run, all factors of production are considered as:

permanent

+variables

total economic cost

lost profit

From the list below, choose the condition for maximizing the average product of a variable factor of production:

AR = 0

AR = MP

+MP = 0

MP = max

If for a given production function the average product of the variable factor is equal to the marginal product, then it can be argued that:

+marginal product reaches its maximum

average variable costs are at this point the minimum

marginal cost is at that point the maximum

maximum profit

The production function Q(K, L) is characterized by constant returns to scale if the following condition is satisfied:

capital increases by 3 times, labor by 4 times, and output by 12 times

+ a 20% increase in both capital and labor costs causes a 20% increase in output

a 10% increase in both capital and labor costs causes a 20% increase in output

an increase in capital costs by 10%, and labor costs by 5% causes an increase in output by 7.5%

The price of a unit of capital is $10, the price of a unit of labor is $20. The optimal combination of factors of production is achieved when the marginal rate of substitution of labor by capital is:

-2

+-1/2

-thirty

-20

Two resources are used in production. If their prices are equal, then they are used:

in the same amount

in the same proportion

in the same volume and the same proportion

+not enough information

A larger volume of production corresponds to the position of the isoquant, located relative to the initial one:

+ above and to the right

below and to the right

above and to the left

below and to the left

With the optimal choice of the best combination of resources, the ratio of their marginal productivity is:

the ratio of the average productivity of the first resource to the average productivity of the second resource

ratio of output elasticities with respect to resources

+ the ratio of resource prices

ratio of total resource costs

The marginal rate of technological substitution of factor X by factor Y is 4. If it is necessary to produce the same volume of production, but reduce the cost of factor X by 2 units, then the use of factor Y:

will increase by 2 units

+ will increase by 8 units

will increase by 1/2 unit

not enough data

Output increased from 2000 to 2200, the price of goods decreased by 20%. At the same time, the number of employees increased by 20%, as a result of:

total revenue increased, while labor productivity decreased

overall revenue and labor productivity increased

+ total revenue and labor productivity decreased

total revenue decreased, while labor productivity increased

In the short run, a competitive profit maximizing or loss minimizing firm will not continue production if:

the price of the product is below the minimum average cost

average fixed cost is higher than the price of the product

+ product price below the minimum of average variable costs

product price below marginal cost

Find the correct statement:

with an increase in output, the value of long-term average costs decreases

the long run average cost curve is always decreasing

+ the dynamics of average long-term costs is determined by the effect of scale of production

The average cost curve always crosses the marginal cost curve at its maximum.

Producer equilibrium in the short run is achieved:

at the point where the isoquant crosses the isocost

with equal marginal productivity of factors of production

with equal prices of factors of production

+ if the price-weighted marginal productivity of production factors is equal

The elasticity of demand for resources depends on:

+ ease of resource substitution

marginal product reduction factor

food price levels

consumer choice

If for a given production function the average product of the variable factor is equal to the marginal product, then it can be argued that:

marginal product reaches its maximum

+ the average product of the variable factor is at this point the maximum

marginal cost is at that point the maximum

maximum profit

The production function of the firm (the Cobb-Douglas function) is described by the equation Q(K, L) = K 0.5 L 0.5 . What is the returns to scale of this firm?

rising

falling

+ permanent

not enough information

The Cobb-Douglas production function Q(K,L) = 8K x 10L 2 is characterized by:

+increasing economies of scale

decreasing effect of scale

constant economies of scale

not enough data

The Cobb-Douglas production function Q (K,L) = 3K 0.5 L 0.3 is given, it is characterized by:

increasing economies of scale

+ decreasing effect of scale

constant economies of scale

not enough data

Can a competitive firm in long-run equilibrium earn a positive economic profit:

can, if the price of a good is higher than the average cost of production

+ cannot, since in this case all firms in the industry have zero profit

can, if it is able to reduce average costs to a level below the industry

maybe, if its products have special consumer properties

Topic 6. Production costs

Costs (costs) for:

finding trading partners

securing property rights

+ storage of goods in a warehouse

enterprise security

“… This is all that is left of ten thousand,” he said with inexplicable sadness, “and I thought that there were still six or seven thousand more on the current account … How did it happen? Everything was so fun, we prepared horns and hooves, life was intoxicating, the globe was spinning especially for us – and suddenly … I understand! Overhead! The device ate all the money “(I. Ilf, E. Petrov. “The Golden Calf”). Explain what type of costs was discussed in the monologue of the great strategist:

about margin

+about permanent

about variables

about average

To organize production, the enterprise purchased a machine tool worth 20,000 rubles. and a truck worth 100,000 rubles

When accounting for these costs, the accountant should include:

100 000 rub. – for fixed costs (costs), 20,000 rubles. – for variable costs (costs)

+120 000 rub. – for fixed costs (costs)

120 000 rub. – for variable costs (costs)

100 000 rub. – for variable costs (costs), 20,000 rubles. – fixed costs (costs)

Determine which of the following types of costs (costs) are a typical example of variable costs (costs) for a firm:

+ raw material costs

management personnel costs

support staff salaries

business license fee

If the curves of marginal and average costs (costs) have a common point, then this means that they:

intersect at the point of minimum marginal cost

+ intersect at the point of minimum average costs

intersect at the point of maximum marginal cost

touch but do not intersect

Which of the proposed definitions is the best for the concept of “marginal costs (costs)”:

additional costs caused by a general price increase in the market by 1%

the maximum that a consumer can afford to spend on a given product

the amount of costs in excess of average variable costs required to produce an additional unit of output

+ costs (costs) for the production of an additional unit of output

If the long-run average costs (costs) of producing a unit of output decrease as output increases:

there is a negative scale effect

+ there is a positive scale effect

there is a constant scale effect

not enough data

The company modernized production and reduced costs (costs) per unit of output by $2, and also increased output from 2,000 to 3,000 units. per month, which led to a price reduction of $ 3. As a result, profit:

will increase

decrease

will remain unchanged

+ there is not enough information to select an answer

If the price of a competitive firm’s product exceeds its marginal revenue and marginal revenue exceeds marginal costs (costs), then in order to maximize profits, the firm must:

cut output

increase output

+ a competitive firm cannot be in such a situation

not enough information to answer

Which of the following statements regarding the AMC short-run marginal cost curve is incorrect:

marginal cost equals average cost when average cost is at its minimum

when average cost falls, marginal cost is less than average cost

+marginal cost is greater than average cost when output is greater than optimal

marginal cost is not affected by changes in the prices of factors of production

marginal cost is independent of fixed cost

The average total cost of production reaches a minimum value at the volume of production when:

AVC=TPC

profit will be maximum

MC=AVC

+MS=ATS

MS=MR

The firm’s fixed costs are:

cost of resources at prices prevailing at the time of their acquisition

minimum production costs of any volume of products under the most favorable production conditions

+ costs incurred by the firm even if the product is not produced

implicit costs

explicit costs

Which of the following types of costs are not taken into account when making decisions about the optimal volume of production of a firm:

average variables

accounting

average constants

marginal

+ implicit

Which of the following curves never takes a U-shape:

AVC

MS

+AFC

ATS

LATC

In the short run, the firm produces 500 units. The average variable cost is $2 and the average fixed cost is $0.50. The total costs will be (dollars):

2.5

+1250

cannot be determined from the available data

If AVCs decrease as production increases, then:

MS should also be reduced

TFC should also be reduced

TC should also be reduced

ATC must be lower than AVC

+MC must be lower than AVC

Economic costs:

+include explicit and implicit costs, including normal profit

include explicit costs, but do not include implicit costs

include implicit costs but not explicit costs

do not include explicit or implicit costs

exceed explicit and implicit costs by the amount of normal profit

Which of the following statements is correct:

accounting costs + economic costs = normal profit

economic profit – accounting profit = explicit costs

+ accounting profit – implicit costs = economic profit

economic profit – implicit costs = accounting costs

Which of the following expressions represents marginal cost:

TVC/Q

+ TC / Q

TFC/Q

(P * Q) / Q

TFC / Q

If a firm increases input costs by 10% and output increases by 15%, then:

there is a negative effect of scale in production

+ there is a positive effect of scale of production

the law of diminishing productivity applies

ATC curve shifts up

the firm earns maximum profit

The firm’s fixed costs include:

workers’ wages

minimum production costs

advertising costs

+ office rental costs

If the costs of both resources increase by 20%, and the volume of production increases by 10%, then in this case we have:

positive economies of scale

the firm earns maximum profit

+ negative scale effect

the production function can be non-homogeneous

the firm receives the least loss

Average variable costs are the difference between:

average total and marginal costs

variable and average fixed costs

marginal variable cost

average fixed and marginal cost

+average total and average fixed costs

The average total costs are:

ratio of variable costs to output

ratio of fixed costs to output

+ the ratio of the sum of variable and fixed costs to the volume of output

sum of average fixed and marginal costs

the ratio of the amount of fixed and variable costs to total revenue

The economic profit of a firm is the total revenue minus:

internal costs

indirect explicit costs

+ economic costs

accounting costs

direct explicit costs

The total costs are:

MS + AC

AFC+AVC

+FC +VC

AMC + AVC

At the point of minimum average cost, marginal cost should be:

more than average cost

less than average cost

+equal to average costs

minimal

If American corporations focus on maximizing profits, then Japanese corporations focus on maximizing sales. This leads to:

increase in prices for goods of Japanese firms

frequent bankruptcies of Japanese firms

an increase in the cost of producing American firms

+ lower prices for goods of Japanese firms

A competitive firm in equilibrium has:

+MS = MR = P

AR = MR > P

P u003d AC – MS

MR = P – AR

Which of the following costs is not taken into account when searching for the optimal output of the firm:

+average sunk costs

average variable costs

marginal cost

internal costs?

At the point of minimum marginal cost, average cost should be:

+ decreasing

increasing

permanent

minimal

If, at any level of output, the average total revenue (ATR) from the sale of a unit of output exceeds the marginal revenue (MR), then:

+average total income declines as output increases

conditions of perfect competition

marginal revenue is independent of output

average total income rises as output rises

If, as the firm’s output increases, its average variable costs (costs) decrease, then:

marginal cost should also be reduced

average total cost must be lower than average variable cost

total fixed costs should also be reduced

+marginal cost must be lower than average variable cost

The Cobb-Douglas function is described by the formula:

+Q = AK α L 1- α

Q = F(L,K)

Q = f(X1, X2, …, X3)

Q = K α L 1-α

There are three options for investing 550 million rubles. in the production of cars, radios and sugar with a profit of 200, 400 and 300 million rubles, respectively. in year. In addition, you can invest in absolutely reliable government bonds at 10% per annum

Determine the economic profit of the most profitable production:

500 million rubles

400 million rubles

+100 million rubles

350 million rubles

In the short run, the firm produces 600 units. The average variable costs are 200 rubles, the average fixed costs are 100 rubles. The total costs will be (rubles):

+1800

In the short run, a profit maximizing firm will stop production if it turns out that:

+ price less than minimum average variable cost

normal profit below industry average

total revenue is less than total variable cost

total revenue is less than total variable cost

average variable cost is less than price

The relationship between all possible combinations of factors of production and the volume of output is expressed using:

production possibilities curve

total output curve

+ production function

supply elasticity

total cost curve

Topic 7. Types of market structures: competition and monopoly

Unlike a competitive firm, a monopolist:

can set any price for your product

maximizes profit when marginal revenue and marginal cost are equal

can produce any amount of output and sell it at any price

+ for a given market demand curve, can choose the combination of price and output that maximizes profit

faces a perfectly elastic demand curve

Assume that a monopolist can sell 10 units of a product at a price of $100/unit. Selling 11 units causes the price to drop to $99.5/unit. The marginal revenue for an increase in sales from 10 to 11 units is, in dollars:

99.5

+94.5

94.0

109.5

Unlike a competitive firm, a simple monopoly seeks to:

+ produce less products, and set the price higher

maximize profit

set a price at the inelastic part of the demand curve

choose a volume of output at which MR=P

produce more products and set prices higher

A monopolist – a manufacturer of electronic equipment produces and sells such a volume of products at which MR=180 dollars, MC=100 dollars, ATC=200 dollars

To maximize profits, a firm must:

+ increase output

raise prices and reduce output

increase the price and maintain the same output

reduce price and increase output

reduce price and reduce output

Competition is:

manufacturers fight for the highest profit

consumer struggle for the right to buy goods at lower prices

+ economic competitiveness for achieving the best results

driving force of the market

a system of norms and rules that determines the behavior of functioning economic entities

The concept of perfect competition means that:

the industry has a large number of manufacturers of goods that produce heterogeneous products

+ products manufactured by a large number of firms are standardized

there is only one buyer for this product

there are entry barriers in the market

information of sellers and buyers about the market is significantly limited

Which of the following markets best fits the conditions of an oligopoly?

+cars

grain

top women’s clothing

company shares

An oligopoly is a market structure in which:

+ a small number of competing firms

only one big company

a large number of firms producing a homogeneous product

a large number of firms producing a differentiated product

Which of the following does not result in a monopoly:

licenses

copyright

control over a single source of goods

+production and marketing of goods that have many close substitutes

Monopolistic competition is characterized by:

technology differentiation

+ product differentiation

differentiation of manufacturers

price discrimination

a large number of economic agents

Sources of monopoly are not:

competition between producers

resource rarity

copyright

+ profit maximization

The monopsony model assumes that:

unlimited number of buyers

sellers accept prices as data

seller behavior is strategic

+ There is only one buyer on the market

The term “perfectly competitive firm” means that:

is a firm that uses only methods of legal competition

+ this is a firm that does not influence the formation of the market price

is a firm that uses any form of competition to capture the market

is a firm that seeks to establish the desired price in a competitive struggle

Which of the following is not a condition for perfect competition:

freedom to enter the market

freedom to exit the market

+ production diversification

a large number of sellers and buyers

Which of the following is a sign of only perfect competition:

The firm does not have market power

the firm maximizes profits

the firm earns economic profit in the long run

the demand line is the average revenue line of the firm

Under perfect competition, price is equal to minimum average cost:

in the short term

+ in the long run

always

never

Under perfect competition, price is determined by the intersection of supply and demand:

+always

never

in the short term

in the long run

Monopolistic competition is characterized by:

firms are not free to enter and exit the market

few firms in the market

firms in the market produce differentiated products

+ firms operating in the market do not have complete information about market conditions

A monopolist can make an economic profit:

only in the short term

only in the long term

never

+ in both the long and short term

If the marginal cost of a monopolist is positive, then it will produce where:

+elasticity of demand is greater than one

Be First to Comment

Leave a Reply

Your email address will not be published.