Reading 17: Output and Costs - LOS d, (Part 1) ～ Q1-7 quantity, black, capital

cfaedu

1.Holding the quantity of labor constant, output increases as the quantity of capital increases, but at a decreasing rate. This phenomenon is most accurately described as:

A)   diminishing marginal costs of capital.

B)   diminishing marginal returns to labor.

C)   diminishing marginal product of capital.

D)   diminishing average returns to capital.

2.Which of the following statements regarding diminishing marginal returns is most accurate?

A)   As the quantity produced rises, costs begin to rise at a decreasing rate.

B)   As the quantity produced falls, costs begin to rise at a decreasing rate.

C)   The total cost curve arches downward.

D)   As the quantity produced rises, costs begin to rise at an increasing rate.

3.At a fixed level of capital, output increases as the quantity of labor increases, but at a decreasing rate. This phenomenon is an example of:

A)   law of diminishing costs to labor.

B)   law of diminishing returns to capital.

C)   law of diminishing returns to labor.

D)   law of diminishing returns to technology.

4.According to the law of diminishing returns, doubling the number of salespeople for a firm will most likely result in:

A)   doubling the total sales of the firm.

B)   more than doubling the total sales of the firm as a result of economies of scale.

C)   decreasing the total sales of the firm as a result of competition amongst salespeople.

D)   increasing the total sales of the firm and reducing the average sales per salesperson.

5.Based on the concept of diminishing returns, as the quantity of output increases, the short-run marginal costs of production eventually:

A)   rise at a decreasing rate.

B)   rise at an increasing rate.

C)   fall at an increasing rate.

D)   fall at a decreasing rate.

6.The law of diminishing returns states that at some point:

A)   as less of a resource are devoted to production, holding the quantity of other inputs constant, the output will decrease, but at an increasing rate.

B)   as more of a resource is devoted to production, holding the quantity of other inputs constant, the output will increase, but at a decreasing rate.

C)   as more of a resource is devoted to production, holding the quantity of other inputs constant, at some point output will begin to decrease.

D)   costs will rise substantially due to added fixed costs.

7.The law of diminishing returns states that for a given production process, as more and more of a resource (such as labor) are added, holding the quantities of other resources fixed:

A)   cost declines at an increasing rate.

B)   cost declines at a decreasing rate.

C)   output increases at a decreasing rate.

D)   output increases at an increasing rate.

jingh1981

thanks

cfaedu

答案和详解如下：

1.Holding the quantity of labor constant, output increases as the quantity of capital increases, but at a decreasing rate. This phenomenon is most accurately described as:

A)   diminishing marginal costs of capital.

B)   diminishing marginal returns to labor.

C)   diminishing marginal product of capital.

D)   diminishing average returns to capital.

The correct answer was C)

The marginal product of capital is the change in output divided by a unit change in capital, holding labor constant. Diminishing marginal product of capital means that at a constant level of labor, output increases as capital is added, but at a decreasing rate.

2.Which of the following statements regarding diminishing marginal returns is most accurate?

A)   As the quantity produced rises, costs begin to rise at a decreasing rate.

B)   As the quantity produced falls, costs begin to rise at a decreasing rate.

C)   The total cost curve arches downward.

D)   As the quantity produced rises, costs begin to rise at an increasing rate.

The correct answer was D)

At production levels that are consistent with decreasing marginal returns, costs will increase at an increasing rate as production rises.

3.At a fixed level of capital, output increases as the quantity of labor increases, but at a decreasing rate. This phenomenon is an example of:

A)   law of diminishing costs to labor.

B)   law of diminishing returns to capital.

C)   law of diminishing returns to labor.

D)   law of diminishing returns to technology.

The correct answer was C)

The law of diminishing returns states that at some point, as more and more of a resource (e.g., labor) is devoted to a production process, holding the quantity of other inputs constant, the output increases, but at a decreasing rate.

4.According to the law of diminishing returns, doubling the number of salespeople for a firm will most likely result in:

A)   doubling the total sales of the firm.

B)   more than doubling the total sales of the firm as a result of economies of scale.

C)   decreasing the total sales of the firm as a result of competition amongst salespeople.

D)   increasing the total sales of the firm and reducing the average sales per salesperson.

The correct answer was D)

The law of diminishing returns states that as more of a resource is added to a production process, holding other resource use constant, increases in output will eventually decrease. Therefore, as more salespeople are added they will generate more sales at a decreasing rate. Total sales will increase and the average sales per salesperson will decrease.

5.Based on the concept of diminishing returns, as the quantity of output increases, the short-run marginal costs of production eventually:

A)   rise at a decreasing rate.

B)   rise at an increasing rate.

C)   fall at an increasing rate.

D)   fall at a decreasing rate.

The correct answer was B)

The law of diminishing returns states that as more variable resources are a production process combined with a fixed input, output will eventually increase at a decreasing rate. In the short run, as the quantity produced rises, costs rise at an increasing rate.

6.The law of diminishing returns states that at some point:

A)   as less of a resource are devoted to production, holding the quantity of other inputs constant, the output will decrease, but at an increasing rate.

B)   as more of a resource is devoted to production, holding the quantity of other inputs constant, the output will increase, but at a decreasing rate.

C)   as more of a resource is devoted to production, holding the quantity of other inputs constant, at some point output will begin to decrease.

D)   costs will rise substantially due to added fixed costs.

The correct answer was B)

At low levels of output, increasing marginal returns will exist corresponding to the downward sloping portion of the marginal cost curve. As marginal costs begin to increase diminishing marginal returns will occur.

7.The law of diminishing returns states that for a given production process, as more and more of a resource (such as labor) are added, holding the quantities of other resources fixed:

A)   cost declines at an increasing rate.

B)   cost declines at a decreasing rate.

C)   output increases at a decreasing rate.

D)   output increases at an increasing rate.

The correct answer was C)

The law of diminishing returns states that for a given production process, as more and more resources (such as labor) are added holding the quantities of other resources fixed, output increases at a decreasing rate. This occurs because, at some point, adding more workers results in inefficiencies.