Economics Past Questions and Answers

A large firm may experience diseconomies of scale if there is ____________

A Difficulty in coordinating decisions
B Division of labor in production
C Employment of more specialist
D Decrease in the cost of production

Question 4047:

Increasing returns to scale suggests that ____________

A A firm can make a profit by reducing output
B A firm can make more profit by increasing output
C As the producer reduces the quantity of raw materials used, the marginal product will double
D As the producer increases the quantity of raw materials used, the marginal product will fall

Question 4048:

One feature of the average fixed cost is that it ____________

A Falls continuously but is never equal to zero.
B Is U-shaped and intersects the Y-axis
C Rises and falls faster than the marginal cost
D Is always higher than the average variable cost

Question 4049:

If the average fixed cost (AFC) of producing 5 bags of rice is $20.00, the average fixed cost of producing 10 bags will be ____________

A $2.00
B $4.00
C $10.00
D $20.00

Question 4050:

The table below shows the total revenue schedule of a firm. Use the information to answer the question that follows<br/><table class='tbn'><tbody><tr><td> Output (units) </td><td> 50 </td><td> 60 </td><td> 70 </td><td> 80 </td><td> 90 </td></tr><tr><td> Total revenue (TR) $ </td><td> 85 </td><td> 102 </td> <td> 119 </td><td> 136 </td><td> 153 </td></tr></tbody></table><br/><br/><br/>What is the unit price of the firm's output

A $10.00
B $2.70
C $2.00
D $1.70