Question 1

A firm's long run marginal cost is:

Accepted Answer

A) the change in long run cost resulting from producing one more unit of output. 
B) the change in long run fixed cost resulting from producing one more unit of output. 
C) the change in long run variable cost resulting from producing one more unit of output. 
D) none of the above. 
A) the change in long run cost resulting from producing one more unit of output. 
B) the change in long run fixed cost resulting from producing one more unit of output. 
C) the change in long run variable cost resulting from producing one more unit of output. 
D) none of the above.

Question 2

Sarah has a savings account with a $1000 balance that earns 3% APY.She decides to withdraw the entire balance to buy a laptop computer,what will be her opportunity if her buying the laptop?

Accepted Answer

A) the cost of the laptop 
B) the forgone interest 
C) the forgone interest and the cost of the laptop 
D) the cost of the laptop minus the forgone interest 
A) the cost of the laptop 
B) the forgone interest 
C) the forgone interest and the cost of the laptop 
D) the cost of the laptop minus the forgone interest

Question 3

Scenario 8.1: Ana used to work for a Advertising agency where she earned a yearly salary of $60,000.She got tired of working for another company so she opened his own Advertising company.Ana now pays her designer $40,000 per year and spends $25,000 for rent and utilities.She earns $120,000 in annual revenue.
-Refer to Scenario 8.1.What is Ana's explicit cost?

Accepted Answer

A) $65,000 
B) $55,000 
C) $45,000 
D) $35,000 
A) $65,000 
B) $55,000 
C) $45,000 
D) $35,000

Question 4

The increase in total cost that results from producing one more unit of output is the fixed cost.

Accepted Answer

A) True 
 B)False

Question 5

-Refer to Figure 8.8.Curve 1 is Outdoor Equipment's:

Accepted Answer

A) marginal cost curve. 
B) average variable cost curve. 
C) average total cost curve. 
D) average fixed cost curve. 
A) marginal cost curve. 
B) average variable cost curve. 
C) average total cost curve. 
D) average fixed cost curve.

Question 6

-Refer to Figure 8.1.The marginal product of the second worker is ________ lawns moved.

Accepted Answer

A) 4 
B) 5 
C) 5.5 
D) 11 
A) 4 
B) 5 
C) 5.5 
D) 11

Question 7

At Fresh Hot Bakery,the average cost of making 20 baguettes is $1.00.The average cost of making 21 baguettes is $1.10.The marginal cost of the 21st baguettes is:

Accepted Answer

A) $0.10. 
B) $2.10. 
C) $3.00. 
D) $3.10. 
A) $0.10. 
B) $2.10. 
C) $3.00. 
D) $3.10.

Question 8

The period of time when a firm is able to change all of inputs,or factors of production,is called the:

Accepted Answer

A) economic term. 
B) short run. 
C) accounting term. 
D) long run. 
A) economic term. 
B) short run. 
C) accounting term. 
D) long run.

Question 9

-Refer to Figure 8.9.Which point of the LAC represents minimum efficient scale?

Accepted Answer

A) a 
B) b 
C) c 
D) e 
A) a 
B) b 
C) c 
D) e

Question 10

The law of diminishing returns applies in the:

Accepted Answer

A) short run and the long run. 
B) long run but not the short run. 
C) short run only. 
D) long run only. 
A) short run and the long run. 
B) long run but not the short run. 
C) short run only. 
D) long run only.

Question 11

The law of diminishing returns applies only in the long run when the fixed cost can be flexible.

Accepted Answer

A) True 
 B)False

Question 12

Table 8.2
-Mitzi's Pet Salon hires you to determine the company's status.The data in Table 8.2 provides information on the company's annual costs and revenues.Mitzi spends at least 40 hours a week at her place of business.If she closed the salon,she could work for her competitor and earn $15,000 per year.She also owns the building that houses the salon and could rent it out for $18,000 per year if she closes her business.Calculate the economic cost and economic profit for Mitzi's Pet Salon.Would an accountant come to the same conclusion about the profitability of this firm? Explain.

Accepted Answer

Economic cost is equal to all costs of p

Question 13

O'Connor Lamp Factory has total fixed costs of $4500.O'Connor Lamp Factory's average variable cost per lamp is $30 and its average total cost is $45.O'Connor Lamp Factory sells each lamp for $100 each.How many lamps is O'Connor Lamp Factory currently manufacturing:

Accepted Answer

A) 200 lamps. 
B) 250 lamps. 
C) 300 lamps. 
D) a number of lamps that is indeterminate from this information. 
A) 200 lamps. 
B) 250 lamps. 
C) 300 lamps. 
D) a number of lamps that is indeterminate from this information.

Question 14

You own a building that has four possible uses: an Internet cafe,a coffee store,an ice cream store,and a bookstore.The value of the building in each use is $2,000;$3,000;$4,000;and $5,000,respectively.You decide to open an ice cream store.The opportunity cost of using this building for an ice cream store is:

Accepted Answer

A) $2,000,the value if the building is used as an Internet cafe. 
B) $3,000,the value if the building is used as a coffee store. 
C) $3,333,the average of the values if the building is used for either an Internet cafe,a coffee store,or a bookstore. 
D) $5,000,the value if the building is used for a bookstore. 
A) $2,000,the value if the building is used as an Internet cafe. 
B) $3,000,the value if the building is used as a coffee store. 
C) $3,333,the average of the values if the building is used for either an Internet cafe,a coffee store,or a bookstore. 
D) $5,000,the value if the building is used for a bookstore.

Question 15

Table 8.6
-Refer to Table 8.6.For each level of output,compute average variable cost,marginal cost,average fixed cost,and average total cost.

Accepted Answer

The answer of   Table 8.6
-Refer to Table 8.6.For...

Question 16

Dan is an entrepreneur who invests in commercial and residential real estate.He has a savings account with $100,000 that earns 1% APY.Dan wants to buy a house that will give him a monthly cash inflow of $200.What will opportunity cost of investing in the house be?

Accepted Answer

A) 1000 
B) 1200 
C) 800 
D) 200 
A) 1000 
B) 1200 
C) 800 
D) 200

Question 17

-Refer to Figure 8.2.The marginal product of the third worker is ________.

Accepted Answer

A) forty-two 
B) thirty-two 
C) twelve 
D) ten 
A) forty-two 
B) thirty-two 
C) twelve 
D) ten

Question 18

Which of the following is true for all units of output produced?

Accepted Answer

A) Marginal cost is less than average total cost. 
B) Marginal cost is greater than average total cost. 
C) Average variable cost is less than average total cost. 
D) Average fixed cost is less than average variable cost. 
A) Marginal cost is less than average total cost. 
B) Marginal cost is greater than average total cost. 
C) Average variable cost is less than average total cost. 
D) Average fixed cost is less than average variable cost.

Question 19

Table 8.3
-Refer to Table 8.3.If four workers are hired,then:

Accepted Answer

A) diminishing marginal returns have started. 
B) marginal product equals five. 
C) total product is maximized on the table. 
D) all of the above 
A) diminishing marginal returns have started. 
B) marginal product equals five. 
C) total product is maximized on the table. 
D) all of the above

Question 20

As output increases,total cost also increases.Therefore:

Accepted Answer

A) marginal cost is increasing. 
B) marginal cost is positive. 
C) average fixed costs are increasing. 
D) all of the above 
A) marginal cost is increasing. 
B) marginal cost is positive. 
C) average fixed costs are increasing. 
D) all of the above

A firm's long run marginal cost is:

Sarah has a savings account with a $1000 balance that earns 3% APY.She decides to withdraw the entire balance to buy a laptop computer,what will be her opportunity if her buying the laptop?

The increase in total cost that results from producing one more unit of output is the fixed cost.

-Refer to Figure 8.8.Curve 1 is Outdoor Equipment's:

-Refer to Figure 8.1.The marginal product of the second worker is ________ lawns moved.

At Fresh Hot Bakery,the average cost of making 20 baguettes is $1.00.The average cost of making 21 baguettes is $1.10.The marginal cost of the 21st baguettes is:

The period of time when a firm is able to change all of inputs,or factors of production,is called the:

-Refer to Figure 8.9.Which point of the LAC represents minimum efficient scale?

The law of diminishing returns applies in the:

The law of diminishing returns applies only in the long run when the fixed cost can be flexible.

O'Connor Lamp Factory has total fixed costs of $4500.O'Connor Lamp Factory's average variable cost per lamp is $30 and its average total cost is $45.O'Connor Lamp Factory sells each lamp for $100 each.How many lamps is O'Connor Lamp Factory currently manufacturing:

Table 8.6 -Refer to Table 8.6.For each level of output,compute average variable cost,marginal cost,average fixed cost,and average total cost.

Dan is an entrepreneur who invests in commercial and residential real estate.He has a savings account with $100,000 that earns 1% APY.Dan wants to buy a house that will give him a monthly cash inflow of $200.What will opportunity cost of investing in the house be?

-Refer to Figure 8.2.The marginal product of the third worker is ________.

Which of the following is true for all units of output produced?

Table 8.3 -Refer to Table 8.3.If four workers are hired,then:

As output increases,total cost also increases.Therefore:

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand, supply, and Market Equilibrium

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters

Exam 8: Production Technology and Cost

A firm's long run marginal cost is:

Sarah has a savings account with a $1000 balance that earns 3% APY.She decides to withdraw the entire balance to buy a laptop computer,what will be her opportunity if her buying the laptop?

The increase in total cost that results from producing one more unit of output is the fixed cost.

-Refer to Figure 8.8.Curve 1 is Outdoor Equipment's:

-Refer to Figure 8.1.The marginal product of the second worker is ________ lawns moved.

At Fresh Hot Bakery,the average cost of making 20 baguettes is $1.00.The average cost of making 21 baguettes is $1.10.The marginal cost of the 21st baguettes is:

The period of time when a firm is able to change all of inputs,or factors of production,is called the:

-Refer to Figure 8.9.Which point of the LAC represents minimum efficient scale?

The law of diminishing returns applies in the:

The law of diminishing returns applies only in the long run when the fixed cost can be flexible.

O'Connor Lamp Factory has total fixed costs of $4500.O'Connor Lamp Factory's average variable cost per lamp is $30 and its average total cost is $45.O'Connor Lamp Factory sells each lamp for $100 each.How many lamps is O'Connor Lamp Factory currently manufacturing:

Table 8.6 -Refer to Table 8.6.For each level of output,compute average variable cost,marginal cost,average fixed cost,and average total cost.

Dan is an entrepreneur who invests in commercial and residential real estate.He has a savings account with $100,000 that earns 1% APY.Dan wants to buy a house that will give him a monthly cash inflow of $200.What will opportunity cost of investing in the house be?

-Refer to Figure 8.2.The marginal product of the third worker is ________.

Which of the following is true for all units of output produced?

Table 8.3 -Refer to Table 8.3.If four workers are hired,then:

As output increases,total cost also increases.Therefore:

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand, supply, and Market Equilibrium

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters