Question 1

Economic profit is greater than or equal to accounting profit.

Accepted Answer

A) True 
 B)False

Question 2

​​​Table 13-7  
-​Refer to Table 13-7. ​What is total output when 1 worker is hired?

Accepted Answer

A) ​0 
B) ​40 
C) 45 
D) ​85 
A) ​0 
B) ​40 
C) 45 
D) ​85

Question 3

Adam Smith used a famous example of what type of firm to illustrate economies of scale?

Accepted Answer

A) Apple 
B) a pin factory 
C) a lumber mill 
D) a British university 
A) Apple 
B) a pin factory 
C) a lumber mill 
D) a British university

Question 4

Jamar used to work as an office manager, earning $40,000 per year. He gave up that job to start a life-coaching business. In calculating the economic profit of his life-coaching business, the $40,000 income that he gave up is counted as part of the life-coaching business's

Accepted Answer

A) total revenue. 
B) opportunity costs. 
C) explicit costs. 
D) marginal costs. 
A) total revenue. 
B) opportunity costs. 
C) explicit costs. 
D) marginal costs.

Question 5

Figure 13-5  
-Refer to Figure 13-5. Which of the curves is most likely to represent average fixed cost?

Accepted Answer

A) A 
B) B 
C) C 
D) D 
A) A 
B) B 
C) C 
D) D

Question 6

Total revenue minus only implicit costs is called

Accepted Answer

A) accounting profit. 
B) economic profit. 
C) opportunity cost. 
D) None of the above is correct. 
A) accounting profit. 
B) economic profit. 
C) opportunity cost. 
D) None of the above is correct.

Question 7

The Wacky Widget company has total fixed costs of $100,000 per year. The firm's average variable cost is $10 for 10,000 widgets. At that level of output, the firm's average total costs equal

Accepted Answer

A) $10 
B) $15 
C) $20 
D) $25 
A) $10 
B) $15 
C) $20 
D) $25

Question 8

When a firm's only variable input is labor, then the slope of the production function measures the

Accepted Answer

A) quantity of labor. 
B) quantity of output. 
C) total cost. 
D) marginal product of labor. 
A) quantity of labor. 
B) quantity of output. 
C) total cost. 
D) marginal product of labor.

Question 9

When marginal cost exceeds average total cost,

Accepted Answer

A) average fixed cost must be rising. 
B) average total cost must be rising. 
C) average total cost must be falling. 
D) marginal cost must be falling. 
A) average fixed cost must be rising. 
B) average total cost must be rising. 
C) average total cost must be falling. 
D) marginal cost must be falling.

Question 10

Figure 1
b.
Figure 2
c.
Figure 3
d.
Figure 4
ANSWER:
a
DIFFICULTY:
Moderate
LEARNING OBJECTIVES:
ECON.MANK.252 - Given data on a firm's cost structure, calculate the firm's marginal cost at different quantities.
TOPICS:
Producer theory
Production costs
KEYWORDS:
BLOOM'S: Comprehension
CUSTOM ID:
177.13.3 - MC - MANK08
-Refer to Figure 13-7. Which of the figures represents the production function for a typical firm?

Accepted Answer

A)  Figure 1 
B)  Figure 2 
C)  Figure 3 
D)  Figure 4 
A)  Figure 1 
B)  Figure 2 
C)  Figure 3 
D)  Figure 4

Question 11

The opportunity cost of capital is an implicit cost almost every business incurs.

Accepted Answer

A) True 
 B)False

Question 12

In some cases, specialization allows larger factories to produce goods at a lower average cost than smaller factories.

Accepted Answer

A) True 
 B)False

Question 13

Implicit costs

Accepted Answer

A) do not require an outlay of money by the firm. 
B) do not enter into the economist's measurement of a firm's profit. 
C) are also known as variable costs. 
D) are not part of an economist's measurement of opportunity cost. 
A) do not require an outlay of money by the firm. 
B) do not enter into the economist's measurement of a firm's profit. 
C) are also known as variable costs. 
D) are not part of an economist's measurement of opportunity cost.

Question 14

Table 13-5  
-Refer to Table 13-5. The marginal product of the fourth worker is

Accepted Answer

A) 9,000 units. 
B) 8,000 units. 
C) 7,000 units. 
D) 5,000 units. 
A) 9,000 units. 
B) 8,000 units. 
C) 7,000 units. 
D) 5,000 units.

Question 15

A student might describe information about the costs of production as

Accepted Answer

A) dry and technical. 
B) boring. 
C) crucial to understanding firms and market structures. 
D) All of the above could be correct. 
A) dry and technical. 
B) boring. 
C) crucial to understanding firms and market structures. 
D) All of the above could be correct.

Question 16

In his book, An Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith described a visit he made to a

Accepted Answer

A) car factory. 
B) pin factory. 
C) washing machine factory. 
D) farm. 
A) car factory. 
B) pin factory. 
C) washing machine factory. 
D) farm.

Question 17

The marginal-cost curve intersects the average-total-cost curve at the minimum point of the marginal-cost curve.

Accepted Answer

A) True 
 B)False

Question 18

The firm's efficient scale is the quantity of output that minimizes

Accepted Answer

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

Question 19

Table 13-12
Eileen's Elegant Earrings produces pairs of earrings for its mail order catalogue business. Each pair is shipped in a separate box. She rents a small room for $150 a week in the downtown business district that serves as her factory. She can hire workers for $275 a week. There are no implicit costs.  
-Refer to Table 13-12. What is the marginal product of the second worker?

Accepted Answer

A) 110 
B) 200 
C) 260 
D) 300 
A) 110 
B) 200 
C) 260 
D) 300

Question 20

The average-total-cost curve is unaffected by diminishing marginal product.

Accepted Answer

A) True 
 B)False

Economic profit is greater than or equal to accounting profit.

Table 13-7 -Refer to Table 13-7. What is total output when 1 worker is hired?

Adam Smith used a famous example of what type of firm to illustrate economies of scale?

Jamar used to work as an office manager, earning $40,000 per year. He gave up that job to start a life-coaching business. In calculating the economic profit of his life-coaching business, the $40,000 income that he gave up is counted as part of the life-coaching business's

Figure 13-5 -Refer to Figure 13-5. Which of the curves is most likely to represent average fixed cost?

Total revenue minus only implicit costs is called

The Wacky Widget company has total fixed costs of $100,000 per year. The firm's average variable cost is $10 for 10,000 widgets. At that level of output, the firm's average total costs equal

When a firm's only variable input is labor, then the slope of the production function measures the

When marginal cost exceeds average total cost,

The opportunity cost of capital is an implicit cost almost every business incurs.

In some cases, specialization allows larger factories to produce goods at a lower average cost than smaller factories.

Implicit costs

Table 13-5 -Refer to Table 13-5. The marginal product of the fourth worker is

A student might describe information about the costs of production as

In his book, An Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith described a visit he made to a

The marginal-cost curve intersects the average-total-cost curve at the minimum point of the marginal-cost curve.

The firm's efficient scale is the quantity of output that minimizes

The average-total-cost curve is unaffected by diminishing marginal product.

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Filters

Exam 13: The Costs of Production

Economic profit is greater than or equal to accounting profit.

​​​Table 13-7 -​Refer to Table 13-7. ​What is total output when 1 worker is hired?

Adam Smith used a famous example of what type of firm to illustrate economies of scale?

Jamar used to work as an office manager, earning $40,000 per year. He gave up that job to start a life-coaching business. In calculating the economic profit of his life-coaching business, the $40,000 income that he gave up is counted as part of the life-coaching business's

Figure 13-5 -Refer to Figure 13-5. Which of the curves is most likely to represent average fixed cost?

Total revenue minus only implicit costs is called

The Wacky Widget company has total fixed costs of $100,000 per year. The firm's average variable cost is $10 for 10,000 widgets. At that level of output, the firm's average total costs equal

When a firm's only variable input is labor, then the slope of the production function measures the

When marginal cost exceeds average total cost,

The opportunity cost of capital is an implicit cost almost every business incurs.

In some cases, specialization allows larger factories to produce goods at a lower average cost than smaller factories.

Implicit costs

Table 13-5 -Refer to Table 13-5. The marginal product of the fourth worker is

A student might describe information about the costs of production as

In his book, An Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith described a visit he made to a

The marginal-cost curve intersects the average-total-cost curve at the minimum point of the marginal-cost curve.

The firm's efficient scale is the quantity of output that minimizes

The average-total-cost curve is unaffected by diminishing marginal product.

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Filters

Table 13-7 -Refer to Table 13-7. What is total output when 1 worker is hired?