Question 1

Given that fixed costs are constant as output increases,average fixed costs are also constant.

Accepted Answer

A) True 
 B)False

Question 2

Five months ago Wilson opened up a health club.Which of the following is an implicit cost related to the health club?

Accepted Answer

A)  Wilson paid $120 for an outside laundry service to clean the towels used at the club. 
B)  Wilson paid $100 for the pest control exterminator to spray the health club. 
C)  Wilson previously worked as an accountant, earning $3,000 a month. 
D)  Wilson usually eats four hamburgers a day, priced at $3 each. 
A)  Wilson paid $120 for an outside laundry service to clean the towels used at the club. 
B)  Wilson paid $100 for the pest control exterminator to spray the health club. 
C)  Wilson previously worked as an accountant, earning $3,000 a month. 
D)  Wilson usually eats four hamburgers a day, priced at $3 each.

Question 3

Exhibit 22-10
  
-Refer to Exhibit 22-10.Marisol encounters diminishing marginal returns in hour

Accepted Answer

A)  2. 
B)  3. 
C)  4. 
D)  5. 
E)  6. 
A)  2. 
B)  3. 
C)  4. 
D)  5. 
E)  6.

Question 4

Exhibit 22-6
  
-Refer to Exhibit 22-6.The curve labeled "K" represents the firm's __________ cost curve.

Accepted Answer

A)  marginal 
B)  total variable 
C)  average fixed 
D)  average variable 
E)  average total 
A)  marginal 
B)  total variable 
C)  average fixed 
D)  average variable 
E)  average total

Question 5

Exhibit 22-13
  
-Refer to Exhibit 22-13. What dollar amounts go in blanks (V)and (W)?

Accepted Answer

A)  $50; $70 
B)  $12.50; $14 
C)  $140; $150 
D)  $82.50; $80 
E)  There is not enough information to answer this question. 
A)  $50; $70 
B)  $12.50; $14 
C)  $140; $150 
D)  $82.50; $80 
E)  There is not enough information to answer this question.

Question 6

Which of the following is an example of market coordination?

Accepted Answer

A)  Bad weather wipes out half the pineapple crop in Hawaii, the price of pineapples rises, and consumers cut back on their purchases of pineapples. 
B)  The manager of a grocery store notices that his customers are buying tomato soup about as quickly as he puts it on the shelves, so he orders more tomato soup from the wholesaler. 
C)  The manager of a grocery store tells her employees to put the sugar-free cereals on the top shelf where adults can find them more easily. 
D)  a and b 
E)  a, b, and c 
A)  Bad weather wipes out half the pineapple crop in Hawaii, the price of pineapples rises, and consumers cut back on their purchases of pineapples. 
B)  The manager of a grocery store notices that his customers are buying tomato soup about as quickly as he puts it on the shelves, so he orders more tomato soup from the wholesaler. 
C)  The manager of a grocery store tells her employees to put the sugar-free cereals on the top shelf where adults can find them more easily. 
D)  a and b 
E)  a, b, and c

Question 7

Describe the difference between market coordination and managerial coordination.Give an example of each to support your answer.

Accepted Answer

Market coordination is the process in wh

Question 8

Exhibit 22-5
  
-Refer to Exhibit 22-5.Constant returns to scale are present between

Accepted Answer

A)  points A and B. 
B)  points A and C. 
C)  points B and C. 
D)  points B and D. 
E)  points C and D. 
A)  points A and B. 
B)  points A and C. 
C)  points B and C. 
D)  points B and D. 
E)  points C and D.

Question 9

Minimum efficient scale refers to the

Accepted Answer

A)  minimum size plant in any given industry. 
B)  minimum point on the short-run average total cost curve. 
C)  output level when economies of scale first set in. 
D)  output level when diseconomies of scale first set in. 
E)  lowest output level at which average total costs are minimized. 
A)  minimum size plant in any given industry. 
B)  minimum point on the short-run average total cost curve. 
C)  output level when economies of scale first set in. 
D)  output level when diseconomies of scale first set in. 
E)  lowest output level at which average total costs are minimized.

Question 10

Which of the following statements is true?

Accepted Answer

A)  The marginal cost curve has an upward-sloping portion to it because of the law of diminishing marginal returns. 
B)  The marginal cost curve cuts the ATC curve at its highest point. 
C)  When marginal cost is rising, so must average total cost be rising. 
D)  A decline in marginal cost causes the MPP (of the variable input) to decline. 
E)  none of the above 
A)  The marginal cost curve has an upward-sloping portion to it because of the law of diminishing marginal returns. 
B)  The marginal cost curve cuts the ATC curve at its highest point. 
C)  When marginal cost is rising, so must average total cost be rising. 
D)  A decline in marginal cost causes the MPP (of the variable input) to decline. 
E)  none of the above

Question 11

A person who does not ignore a sunk cost increases the probability that

Accepted Answer

A)  the past will influence the future. 
B)  the future will influence the past. 
C)  the future will be like the past. 
D)  there will be no future. 
E)  the future will be like the present. 
A)  the past will influence the future. 
B)  the future will influence the past. 
C)  the future will be like the past. 
D)  there will be no future. 
E)  the future will be like the present.

Question 12

Costs that do not change with output are called __________ costs.

Accepted Answer

A)  marginal 
B)  average 
C)  fixed 
D)  variable 
A)  marginal 
B)  average 
C)  fixed 
D)  variable

Question 13

Economies of scale are said to exist when

Accepted Answer

A)  inputs are increased by some percentage and output increases by the same percentage. 
B)  inputs are increased by some percentage and output increases by a lesser percentage. 
C)  inputs are increased by some percentage and output increases by a greater percentage. 
D)  the LRATC curve slopes upward. 
E)  none of the above 
A)  inputs are increased by some percentage and output increases by the same percentage. 
B)  inputs are increased by some percentage and output increases by a lesser percentage. 
C)  inputs are increased by some percentage and output increases by a greater percentage. 
D)  the LRATC curve slopes upward. 
E)  none of the above

Question 14

As the marginal physical product of U.S.workers _________________,the marginal cost of goods produced in the U.S.______________ and unit costs _____________. This makes American goods ________________ competitive in the global marketplace.

Accepted Answer

A)  rises; falls; fall; less 
B)  falls; falls; fall; more 
C)  rises; falls; fall; more. 
D)  rises; falls; fall; more.. 
A)  rises; falls; fall; less 
B)  falls; falls; fall; more 
C)  rises; falls; fall; more. 
D)  rises; falls; fall; more..

Question 15

If AFC is $9 at a quantity of output of 100 units,and ATC is $11 at the same quantity of output,it follows that

Accepted Answer

A)  marginal cost is $10. 
B)  AVC is $200. 
C)  total cost is $2,000. 
D)  marginal cost is $100. 
E)  none of the above 
A)  marginal cost is $10. 
B)  AVC is $200. 
C)  total cost is $2,000. 
D)  marginal cost is $100. 
E)  none of the above

Question 16

Exhibit 22-2
  
-Refer to Exhibit 22-2.What is the average total cost of producing 120 units of output?

Accepted Answer

A)  $0.67 
B)  $1.83 
C)  $1.07 
D)  $12.50 
E)  There is not enough information provided to answer the question. 
A)  $0.67 
B)  $1.83 
C)  $1.07 
D)  $12.50 
E)  There is not enough information provided to answer the question.

Question 17

Exhibit 22-10
  
-Refer to Exhibit 22-10.Which of the students has the highest marginal productivity for the fifth hour of studying?

Accepted Answer

A)  Jose 
B)  Paul 
C)  Marisol 
D)  both Paul and Marisol 
A)  Jose 
B)  Paul 
C)  Marisol 
D)  both Paul and Marisol

Question 18

Exhibit 22-12
  
-Refer to Exhibit 22-12 above.The numbers that go in blanks (A),(B),(C),and (D),respectively,are

Accepted Answer

A)  12, 13, 14 and 12. 
B)  12, 25, 39 and 51. 
C)  12, 11, 10 and 9. 
D)  12, 14, 13 and 11. 
E)  none of the above 
A)  12, 13, 14 and 12. 
B)  12, 25, 39 and 51. 
C)  12, 11, 10 and 9. 
D)  12, 14, 13 and 11. 
E)  none of the above

Question 19

Exhibit 22-3
  
-Refer to Exhibit 22-3.The total cost of producing 45 units of output is

Accepted Answer

A)  $1,100. 
B)  $950. 
C)  $1,050. 
D)  $900. 
E)  $1,000. 
A)  $1,100. 
B)  $950. 
C)  $1,050. 
D)  $900. 
E)  $1,000.

Question 20

Explain the difference between the law of diminishing marginal returns and diseconomies of scale.

Accepted Answer

The law of diminishing marginal returns

Exam 22: Production and Costs

Given that fixed costs are constant as output increases,average fixed costs are also constant.

Five months ago Wilson opened up a health club.Which of the following is an implicit cost related to the health club?

Exhibit 22-10 -Refer to Exhibit 22-10.Marisol encounters diminishing marginal returns in hour

Exhibit 22-6 -Refer to Exhibit 22-6.The curve labeled "K" represents the firm's __________ cost curve.

Exhibit 22-13 -Refer to Exhibit 22-13. What dollar amounts go in blanks (V)and (W)?

Which of the following is an example of market coordination?

Describe the difference between market coordination and managerial coordination.Give an example of each to support your answer.

Exhibit 22-5 -Refer to Exhibit 22-5.Constant returns to scale are present between

Minimum efficient scale refers to the

Which of the following statements is true?

A person who does not ignore a sunk cost increases the probability that

Costs that do not change with output are called __________ costs.

Economies of scale are said to exist when

As the marginal physical product of U.S.workers _________________,the marginal cost of goods produced in the U.S.______________ and unit costs _____________. This makes American goods ________________ competitive in the global marketplace.

If AFC is $9 at a quantity of output of 100 units,and ATC is $11 at the same quantity of output,it follows that

Exhibit 22-2 -Refer to Exhibit 22-2.What is the average total cost of producing 120 units of output?

Exhibit 22-10 -Refer to Exhibit 22-10.Which of the students has the highest marginal productivity for the fifth hour of studying?

Exhibit 22-12 -Refer to Exhibit 22-12 above.The numbers that go in blanks (A),(B),(C),and (D),respectively,are

Exhibit 22-3 -Refer to Exhibit 22-3.The total cost of producing 45 units of output is

Explain the difference between the law of diminishing marginal returns and diseconomies of scale.

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free, Controlled, and Relative

Supply, Demand, and Price: Applications

Macroeconomic Measurements: Prices and Unemployment

Macroeconomic Measurements: GDP and Real GDP

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self Regulating Economy

Keynesian Macroeconomics and Economic Instability: A Critique of the Self-Regulating Economy

Fiscal Policy and the Federal Budget

Money, Banking,and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth: Resources, Technology, Ideas, and Institutions

The Financial Crisis of 2007-2009

Debates in Macroeconomics Over the Role and Effects of Government

Elasticity

Consumer Choice: Maximizing Utility and Behavioral Economics

Perfect Competition

Monopoly

Monopolistic Competition, Oligopoly, and Game Theory

Government and Product Markets: Antitrust and Regulation

Factor Markets: With Emphasis on the Labor Market

Wages,Unions,and Labor

The Distribution of Income and Poverty

Interest, Rent, and Profit

Market Failure: Externalities, Public Goods, and Asymmetric Information

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

Globalization and International Impacts on the Economy

The Economic Case For and Against Government: Five Topics Considered

Stocks, Bonds, Futures, and Options

Agriculture: Problems, Policies, and Unintended Effects

Filters

As the marginal physical product of U.S.workers _________,the marginal cost of goods produced in the U.S. and unit costs _. This makes American goods __________ competitive in the global marketplace.