Question 1

Some costs do not vary with the quantity of output produced. Those costs are called

Accepted Answer

A) marginal costs. 
B) average costs. 
C) fixed costs. 
D) explicit costs. 
A) marginal costs. 
B) average costs. 
C) fixed costs. 
D) explicit costs.

Question 2

If the average-total-cost of producing five units is $10, and the marginal-cost of producing the fifth unit is $10, then the average-total-cost curve is at its minimum at five units.​

Accepted Answer

A) True 
 B)False

Question 3

Bubba is a shrimp fisherman who could earn $5,000 as a fishing tour guide. Instead, he is a full-time shrimp fisherman. In calculating the economic profit of his shrimp business, the $5,000 that Bubba gave up is counted as part of the shrimp business's

Accepted Answer

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

Question 4

Consider a small hair styling salon. List some examples of implicit costs of this business.

Accepted Answer

the lost earnings of the owner

Question 5

In the long run, a firm that produces and sells textbooks gets to choose

Accepted Answer

A) how many workers to hire. 
B) the size of its factories. 
C) which short-run average-total-cost curve to use. 
D) All of the above are correct. 
A) how many workers to hire. 
B) the size of its factories. 
C) which short-run average-total-cost curve to use. 
D) All of the above are correct.

Question 6

Suppose a certain firm is able to produce 165 units of output per day when 15 workers are hired. The firm is able to produce 181 units of output per day when 16 workers are hired, holding other inputs fixed. The marginal product of the 16th worker is

Accepted Answer

A) 10 units of output. 
B) 11 units of output. 
C) 16 units of output. 
D) 181 units of output. 
A) 10 units of output. 
B) 11 units of output. 
C) 16 units of output. 
D) 181 units of output.

Question 7

Katya owns a math-tutoring business. Her accountant most likely includes which of the following costs on her financial statements? (i)
Workbooks containing practice problems
(ii)
Rent for the storefront
(iii)
Wages Katya could earn as a bookkeeper
(iv)
Interest that Katya's money was earning before she spent her savings to set up the tutoring business

Accepted Answer

A) (i) only 
B) (i) and (ii) only 
C) (iii) and (iv) only 
D) (i), (ii), (iii), and (iv) 
A) (i) only 
B) (i) and (ii) only 
C) (iii) and (iv) only 
D) (i), (ii), (iii), and (iv)

Question 8

If long-run average total cost is rising, then the firm is experiencing economies of scale.

Accepted Answer

A) True 
 B)False

Question 9

Suppose that for a particular firm the only variable input into the production process is labor and that output equals zero when no workers are hired. In addition, suppose that marginal cost of the third worker hired is $40, and the average total cost when three workers are hired is $50. What is the total cost of production when three workers are hired?

Accepted Answer

A) $50 
B) $90 
C) $120 
D) $150 
A) $50 
B) $90 
C) $120 
D) $150

Question 10

Table 13-7
The Flying Elvis Copter Rides  
-Refer to Table 13-7. What is the value of N?

Accepted Answer

A) $50 
B) $140 
C) $360 
D) $410 
A) $50 
B) $140 
C) $360 
D) $410

Question 11

Total revenue minus only explicit costs is called

Accepted Answer

A) accounting profit. 
B) economic profit. 
C) average total cost. 
D) implicit profit. 
A) accounting profit. 
B) economic profit. 
C) average total cost. 
D) implicit profit.

Question 12

If Kevin's children run a lemonade stand for a day and sell 200 glasses of lemonade at $0.50 each, their total revenues are

Accepted Answer

A) $100. 
B) $199.50. 
C) $200. 
D) $400. 
A) $100. 
B) $199.50. 
C) $200. 
D) $400.

Question 13

Which of the following is an example of an implicit cost? (i)
The owner of a firm forgoing an opportunity to earn a large salary working for a Wall Street brokerage firm
(ii)
Interest paid on the firm's debt
(iii)
Rent paid by the firm to lease office space

Accepted Answer

A) (ii) and (iii) only 
B) (i) and (iii) only 
C) (i) only 
D) (iii) only 
A) (ii) and (iii) only 
B) (i) and (iii) only 
C) (i) only 
D) (iii) only

Question 14

Table 13-11  
-Refer to Table 13-11. What is the variable cost of producing 5 posters?

Accepted Answer

A) $13 
B) $14 
C) $15 
D) It can't be determined from the information given. 
A) $13 
B) $14 
C) $15 
D) It can't be determined from the information given.

Question 15

In the long run a company that produces and sells popcorn incurs total costs of $1,050 when output is 90 canisters and $1,200 when output is 120 canisters. The popcorn company exhibits

Accepted Answer

A) diseconomies of scale because total cost is rising as output rises. 
B) diseconomies of scale because average total cost is rising as output rises. 
C) economies of scale because total cost is rising as output rises. 
D) economies of scale because average total cost is falling as output rises. 
A) diseconomies of scale because total cost is rising as output rises. 
B) diseconomies of scale because average total cost is rising as output rises. 
C) economies of scale because total cost is rising as output rises. 
D) economies of scale because average total cost is falling as output rises.

Question 16

Total cost can be divided into two types of costs:

Accepted Answer

A) fixed costs and variable costs. 
B) fixed costs and marginal costs. 
C) variable costs and marginal costs. 
D) average costs and marginal costs. 
A) fixed costs and variable costs. 
B) fixed costs and marginal costs. 
C) variable costs and marginal costs. 
D) average costs and marginal costs.

Question 17

The average-fixed-cost curve is constant.

Accepted Answer

A) True 
 B)False

Question 18

Fixed costs are those costs that remain fixed no matter how long the time horizon is.

Accepted Answer

A) True 
 B)False

Question 19

The Wacky Widget company has total fixed costs of $100,000 per year. The firm's average variable cost is $5 for 10,000 widgets. At that level of output, the firm's average total costs equal

Accepted Answer

A) $10 
B) $15 
C) $100 
D) $150 
A) $10 
B) $15 
C) $100 
D) $150

Question 20

The average-fixed-cost curve

Accepted Answer

A) is constant. 
B) is always decreasing. 
C) intersects marginal cost at the minimum of average fixed cost. 
D) intersects marginal cost at the minimum of marginal cost. 
A) is constant. 
B) is always decreasing. 
C) intersects marginal cost at the minimum of average fixed cost. 
D) intersects marginal cost at the minimum of marginal cost.

Some costs do not vary with the quantity of output produced. Those costs are called

If the average-total-cost of producing five units is $10, and the marginal-cost of producing the fifth unit is $10, then the average-total-cost curve is at its minimum at five units.

Bubba is a shrimp fisherman who could earn $5,000 as a fishing tour guide. Instead, he is a full-time shrimp fisherman. In calculating the economic profit of his shrimp business, the $5,000 that Bubba gave up is counted as part of the shrimp business's

Consider a small hair styling salon. List some examples of implicit costs of this business.

In the long run, a firm that produces and sells textbooks gets to choose

Suppose a certain firm is able to produce 165 units of output per day when 15 workers are hired. The firm is able to produce 181 units of output per day when 16 workers are hired, holding other inputs fixed. The marginal product of the 16th worker is

If long-run average total cost is rising, then the firm is experiencing economies of scale.

Table 13-7 The Flying Elvis Copter Rides -Refer to Table 13-7. What is the value of N?

Total revenue minus only explicit costs is called

If Kevin's children run a lemonade stand for a day and sell 200 glasses of lemonade at $0.50 each, their total revenues are

Which of the following is an example of an implicit cost? (i) The owner of a firm forgoing an opportunity to earn a large salary working for a Wall Street brokerage firm (ii) Interest paid on the firm's debt (iii) Rent paid by the firm to lease office space

Table 13-11 -Refer to Table 13-11. What is the variable cost of producing 5 posters?

In the long run a company that produces and sells popcorn incurs total costs of $1,050 when output is 90 canisters and $1,200 when output is 120 canisters. The popcorn company exhibits

Total cost can be divided into two types of costs:

The average-fixed-cost curve is constant.

Fixed costs are those costs that remain fixed no matter how long the time horizon is.

The Wacky Widget company has total fixed costs of $100,000 per year. The firm's average variable cost is $5 for 10,000 widgets. At that level of output, the firm's average total costs equal

The average-fixed-cost curve

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

Some costs do not vary with the quantity of output produced. Those costs are called

If the average-total-cost of producing five units is $10, and the marginal-cost of producing the fifth unit is $10, then the average-total-cost curve is at its minimum at five units.​

Bubba is a shrimp fisherman who could earn $5,000 as a fishing tour guide. Instead, he is a full-time shrimp fisherman. In calculating the economic profit of his shrimp business, the $5,000 that Bubba gave up is counted as part of the shrimp business's

Consider a small hair styling salon. List some examples of implicit costs of this business.

In the long run, a firm that produces and sells textbooks gets to choose

Suppose a certain firm is able to produce 165 units of output per day when 15 workers are hired. The firm is able to produce 181 units of output per day when 16 workers are hired, holding other inputs fixed. The marginal product of the 16th worker is

If long-run average total cost is rising, then the firm is experiencing economies of scale.

Table 13-7 The Flying Elvis Copter Rides -Refer to Table 13-7. What is the value of N?

Total revenue minus only explicit costs is called

If Kevin's children run a lemonade stand for a day and sell 200 glasses of lemonade at $0.50 each, their total revenues are

Which of the following is an example of an implicit cost? (i) The owner of a firm forgoing an opportunity to earn a large salary working for a Wall Street brokerage firm (ii) Interest paid on the firm's debt (iii) Rent paid by the firm to lease office space

Table 13-11 -Refer to Table 13-11. What is the variable cost of producing 5 posters?

In the long run a company that produces and sells popcorn incurs total costs of $1,050 when output is 90 canisters and $1,200 when output is 120 canisters. The popcorn company exhibits

Total cost can be divided into two types of costs:

The average-fixed-cost curve is constant.

Fixed costs are those costs that remain fixed no matter how long the time horizon is.

The Wacky Widget company has total fixed costs of $100,000 per year. The firm's average variable cost is $5 for 10,000 widgets. At that level of output, the firm's average total costs equal

The average-fixed-cost curve

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

If the average-total-cost of producing five units is $10, and the marginal-cost of producing the fifth unit is $10, then the average-total-cost curve is at its minimum at five units.