Question : 21) Increasing marginal returns always occurs when the A) marginal product : 1226166

21) Increasing marginal returns always occurs when the

A) marginal product of an additional worker exceeds the marginal product of the previous worker.

B) average product of an additional worker exceeds the average product of the previous worker.

C) marginal product of an additional worker is less than the marginal product of the previous worker.

D) average product of an additional worker is less than the average product of the previous worker.

E) marginal product of an additional worker exceeds the average product of the previous worker.

22) Jeremiah runs a bullfrog farm in Frogville, Oklahoma. Jeremiah notices that each additional worker he employs adds more to the total output than does the previous worker. Jeremiah must be

A) experiencing increasing marginal returns to labor.

B) producing at a point where the average product of labor decreases as more workers are employed.

C) producing at a point below his total product curve.

D) mistaken because the law of decreasing returns points out that it cannot be the case that the marginal product increases as more workers are employed.

E) producing at a point where the average product of labor exceeds the marginal product of labor.

23) Increasing marginal returns to labor

A) occur when a particularly efficient worker is employed.

B) describe the portion of a total product curve where the marginal product is negative.

C) mean that two workers produce less than twice the output of one worker.

D) are the result of specialization and division of labor in the production process.

E) occur only when there are increasing marginal returns to capital.

24) When the marginal product of an additional worker is less than the marginal product of the previous worker, there are ________ returns to labor.

A) increasing total

B) decreasing total

C) increasing marginal

D) decreasing marginal

E) constant average

25) Decreasing marginal returns

A) can be avoided if a firm watches costs.

B) affect all firms, but at different production levels.

C) affect all firms at the same level of production.

D) disappear when the firm produces a large enough level of output.

E) mean that the average product of labor starts as a negative number and then becomes positive.

26) Decreasing marginal returns occur in the short run as more labor is hired to work in a fixed sized plant because

A) less efficient and less productive workers are hired.

B) adding more workers exhausts the possible gains from specialization.

C) the entrepreneur does not know how to manage more workers.

D) each worker will produce more than the worker previously hired.

E) the plant becomes less specialized.

27) The law of decreasing returns states that as a firm uses more of a

A) fixed input, with a given quantity of variable inputs, the marginal product of the fixed input eventually decreases.

B) variable input, total output will increase indefinitely.

C) variable input, with a given quantity of fixed inputs, the marginal product of the variable input eventually decreases.

D) variable input, output will begin to fall immediately.

E) fixed input and a variable input, the marginal product of the fixed input and the marginal product of the variable input both decrease.

28) Average product is equal to

A) marginal product + total product.

B) total product ÷ marginal product.

C) total product ÷ quantity of labor.

D) total product × quantity of labor.

E) marginal product × quantity of labor.

29) Jill runs a factory that makes lie detectors in Little Rock, Arkansas. This month, Jill’s 34 workers produced 680 machines. Jill’s average product of labor equaled ________ lie detectors per worker.

A) 680

B) 34

C) 23

D) 20

E) None of the above answers is correct.

30) If 9 workers can produce 1,550 units of output and 10 workers can produce 1,700 units of output, then the average product of 10 workers is

A) 1,700 units.

B) 1,550 units.

C) 170 units.

D) 150 units.

E) 155 units.