Finals ms2

Statement 1: Law of Diminishing returns show Compute for the total revenue of firm that used
the effect of additional/extra inputs will result to 5 units of labor to produce finished products and
a more and more extra output while holding sell at price 1752.
other input fixed. 220,752
Statement 2: Law of Diminishing returns
describes a pattern in production wherein by
holding other inputs constant except for one
input which is increasing, output will be
increasing also arriving to a point wherein the
rate in the increase output will be lesser and
lesser.
Which of the statement/s is/are incorrect about

firm’s production?
A. The goal of production is to create goods and Compute for the average product of units
services that will yield utility to customers, thus produced while using 5 inputs of labor. 25.20
will result to increase infirm's profit.
B. The Production uses outputs in its activity to
create goods or services.
C. Production is composed of fixed and variable
input which doesn’t easily change in short
period of time even if there are changes in
production level
Statement 1: The quantity of output will

continue to increase when only one input
continues to increase also. Statement 1: Marginal Product is the change in
Statement 2: The quantity of input will depend revenue resulting from the output produced by
on the number of available outputs. one additional unit of the variable unit.
Statement 2: Average Product is the total
Compute for the marginal product of firm products divided by the total units of inputs
produced while using the 3rd unit of labor used.
inputs.
To achieve the firm’s goal which is maximizing
profit, firms should?
a. Control costs through lowering cost incurred
b. Increasing product’s cost
a. Average total cost is the sum of average fixed

cost, variable cost and marginal cost.
b. As output being produced continuously
increases, average total cost continues to
33 increase due to rising average fixed cost.
Which of the following is correct with regards Which of the following is correct about
Production possibility frontier? Keynesian theory of employment?
a. Input resources are efficiently utilized when a. Implies that if people has less purchasing
production of one good cannot be increased power, it would result to increasing employment
without simultaneously decreasing the b. Implies that through lowering of wages,
production of other good. employment will rise
b. Combination of goods beyond the production
possibility curve needs to have an increase or The following information relates to next year's
growth in the resources of the firm to achieve projected operating results of the JJ Division.
the desired output level. The total sales is 2,500,000 with 1,000,000
c. Combination of goods along the production variable cost and 1,700,000 total fixed cost.
possibility curve is not producing enough goods Should JJ division discontinue their operation
given the firm’s available resources. temporarily? No, the firm will incur net loss of
1,500,000
Which of the following is/are incorrect about
production concepts? Which of the following is incorrect with regards
A. Total product refers to the total output Labor force?
produced after utilizing the fixed and variable a. Composed of potential workers like retirees,
inputs in the production process. fresh college graduates and working students.
B. When total product curve reaches its highest b. Are those who qualified for the jobs, willing
peak, there is no marginal product generate. to work and willing to accept the on-going rate
C. Starting from production at origin until the
highest portion of average product and marginal The following information relates to next year's
product, the total product decreases. projected operating results of the JJ Division.
The total sales is 2,500,000 with 1,000,000
Potential workers are those who are? variable cost and 1,700,000 total fixed cost.
a. Retirees What will be the result if the division’s
b. an 18 years old, working 5 hours a day in a operation will shut down temporarily and 50%
fast food chain of fixed cost is avoidable? 650,000 net loss
c. a 20 years old, full time student in a local
college Average Fixed and Variable Cost of producing 1
units. 30 & 15
An unemployment which is experienced by
everybody as we will be needing time in
searching for the right job.
a. Demand deficit unemployment
b. Structural unemployment
c. Frictional unemployment Which of the following is/are correct about
d. None of these employment?
a. Keynesian theory highlights that wage is the
primary cause of why unemployment exist.
b. Classical theory explains that to increase
employment, wages needs to be lowered for
firms to demand for more workers.
Marginal Cost of producing the 5th unit. 10

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Statement 1: Law of Diminishing returns show Compute for the total revenue of firm that used

Which of the statement/s is/are incorrect about

Statement 1: The quantity of output will

a. Average total cost is the sum of average fixed

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