Q. The marginal product curve is above the average product curve when the average product is :
✅ Correct Answer: (A)
increasing
MicroEconomics, Theory and Applications 1 MCQs and Notes
Q. Isoquants are equal to:
✅ Correct Answer: (A)
product lines
Q. ______ shows the overall output generated at a given level of input:
✅ Correct Answer: (B)
production function
Q. If all resources used in the production of a product are increased by 20 percent and output increases by 20 percent, then there must be:
✅ Correct Answer: (C)
constant returns to scale
Q. The larger the diameter of a natural gas pipeline, the lower is the average total cost of transmitting 1,000 cubic feet of gas 1,000 miles. This is an example of:
✅ Correct Answer: (A)
economies of scale
Q. When a firm doubles its inputs and finds that its output has more than doubled, this is known as:
✅ Correct Answer: (A)
economies of scale
Q. A firm encountering economies of scale over some range of output will have a:
✅ Correct Answer: (B)
falling long-run average cost curve
Q. The firm’s short-run marginal-cost curve is increasing when:
✅ Correct Answer: (B)
marginal product is decreasing
Q. If a more efficient technology was discovered by a firm, there would be:
✅ Correct Answer: (D)
a downward shift in the mc curve
Q. If the short-run average variable costs of production for a firm are rising, then this indicates that:
✅ Correct Answer: (C)
marginal costs are above average variable costs