Question 1

Table 13-4
Charles's Math Tutoring  
-Refer to Table 13-4. What is the marginal product of the second worker?

Accepted Answer

A) 15 students 
B) 20 students 
C) 22.5 students 
D) 25 students 
A) 15 students 
B) 20 students 
C) 22.5 students 
D) 25 students

Question 2

A difference between explicit and implicit costs is that

Accepted Answer

A) explicit costs must be greater than implicit costs. 
B) explicit costs do not require a direct monetary outlay by the firm, whereas implicit costs do. 
C) implicit costs do not require a direct monetary outlay by the firm, whereas explicit costs do. 
D) implicit costs must be greater than explicit costs. 
A) explicit costs must be greater than implicit costs. 
B) explicit costs do not require a direct monetary outlay by the firm, whereas implicit costs do. 
C) implicit costs do not require a direct monetary outlay by the firm, whereas explicit costs do. 
D) implicit costs must be greater than explicit costs.

Question 3

For a construction company that builds houses, which of the following costs would be a fixed cost?

Accepted Answer

A) the $50,000 per year salary paid to a construction foreman 
B) the $30,000 per year salary paid to the company's bookkeeper 
C) the $10,000 per year premium paid to an insurance company 
D) All of the above are correct. 
A) the $50,000 per year salary paid to a construction foreman 
B) the $30,000 per year salary paid to the company's bookkeeper 
C) the $10,000 per year premium paid to an insurance company 
D) All of the above are correct.

Question 4

Thirsty Thelma owns and operates a small lemonade stand. When Thelma is producing a low quantity of lemonade she has few workers and her equipment is not being fully utilized. Because she can easily put her idle resources to use,

Accepted Answer

A) the marginal cost of an extra worker is large. 
B) the marginal cost of one more glass of lemonade is smaller than if output were high. 
C) the marginal product of an extra worker is small. 
D) her lemonade stand is likely to be crowded with workers. 
A) the marginal cost of an extra worker is large. 
B) the marginal cost of one more glass of lemonade is smaller than if output were high. 
C) the marginal product of an extra worker is small. 
D) her lemonade stand is likely to be crowded with workers.

Question 5

Suppose that a worker can produce 100 units of output in 7 hours. In the 8th hour, he can produce 12 units of output. The worker can produce 112 units of output in 8 hours.

Accepted Answer

A) True 
 B)False

Question 6

​Sebastian decides to open a tree farm. When deciding to open his own business, he turned down two separate job offers of $25,000 and $30,000 and withdrew $20,000 from his savings. Sebastian's savings account paid 3 percent interest. He also borrowed $20,000 from his brother, whom he pays 2 percent interest per year. He spent $15,000 to purchase supplies and earned $50,000 in revenue during his first year. What are Sebastian's implicit costs from running his own business?

Accepted Answer

A) ​$30,600 
B) ​$55,600 
C) ​$50,000 
D) ​$75,600 
A) ​$30,600 
B) ​$55,600 
C) ​$50,000 
D) ​$75,600

Question 7

Jaxon borrows $10,000 from a bank and withdraws $20,000 from his personal savings to open a tattoo parlor. The interest rate is 3 percent for both the bank loan and his personal savings. Jaxon also quit his job as a waiter, which paid $20,000. According to an economist, Jaxon's opportunity cost of opening the tattoo parlor equals $20,900.

Accepted Answer

A) True 
 B)False

Question 8

Table 13-11  
-Refer to Table 13-11. The total cost of producing 1 poster is

Accepted Answer

A) $1. 
B) $10. 
C) $11. 
D) $22. 
A) $1. 
B) $10. 
C) $11. 
D) $22.

Question 9

​Table 13-16  
-Refer to Table 13-16. What is the total cost of producing 2 units of output?

Accepted Answer

A) $​50 
B) ​$74 
C) ​$76 
D) ​$58 
A) $​50 
B) ​$74 
C) ​$76 
D) ​$58

Question 10

When marginal cost is greater than average cost, average cost is

Accepted Answer

A) rising. 
B) falling. 
C) constant. 
D) The direction of change in average cost cannot be determined from this information. 
A) rising. 
B) falling. 
C) constant. 
D) The direction of change in average cost cannot be determined from this information.

Question 11

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

Accepted Answer

A) $25 
B) $50 
C) $100 
D) $150 
A) $25 
B) $50 
C) $100 
D) $150

Question 12

Since the 1980s, Wal-Mart stores have appeared in almost every community in America. Wal-Mart buys its goods in large quantities and, therefore, at cheaper prices. Wal-Mart also locates its stores where land prices are low, usually outside of the community business district. Many customers shop at Wal-Mart because of low prices. Local retailers, like the neighborhood drug store, often go out of business because they lose customers. This story demonstrates that

Accepted Answer

A) consumers do not react to changing prices. 
B) there are diseconomies of scale in retail sales. 
C) there are economies of scale in retail sales. 
D) there are diminishing returns to producing and selling retail goods. 
A) consumers do not react to changing prices. 
B) there are diseconomies of scale in retail sales. 
C) there are economies of scale in retail sales. 
D) there are diminishing returns to producing and selling retail goods.

Question 13

Scenario 13-7
Julia prepares tax returns and does bookkeeping. Last year her revenues from the tax and bookkeeping business were $150,000, and her expenses for the business were $15,000. When she started her tax and bookkeeping business, Julia gave up her supplemental job doing in-home pet sitting. She used to earn $10,000 per year from pet sitting. Assume that she incurred no costs for her pet sitting business.
-Refer to Scenario 13-7. Julia's explicit costs are

Accepted Answer

A) 0. 
B) $10,000. 
C) $15,000. 
D) $25,000. 
A) 0. 
B) $10,000. 
C) $15,000. 
D) $25,000.

Question 14

Scenario 13-13
Christine is an artist who creates custom cookie jars. Her annual revenue from selling the cookie jars is $90,000. The annual explicit costs of the materials used to make the cookie jars are $54,000.
-Refer to Scenario 13-13. Christine used $5,000 from her personal savings account to buy pottery tools for her business. The savings account paid 1% annual interest. Christine could earn $6,000 per year as a tax preparer. What is the annual accounting profit of her cookie jar business?

Accepted Answer

A) $36,000 
B) $35,950 
C) $30,000 
D) $29,950 
A) $36,000 
B) $35,950 
C) $30,000 
D) $29,950

Question 15

The value of a business owner's time is an example of

Accepted Answer

A) an opportunity cost. 
B) a fixed cost. 
C) an explicit cost. 
D) total revenue. 
A) an opportunity cost. 
B) a fixed cost. 
C) an explicit cost. 
D) total revenue.

Question 16

Table 13-17
Consider the following table of long-run total cost for four different firms:  
-Refer to Table 13-17. Which firm's long-run marginal cost decreases as output increases?

Accepted Answer

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

Question 17

Table 13-13
Teacher's Helper is a small company that has a subcontract to produce instructional materials for disabled children in public school districts. The owner rents several small rooms in an office building in the suburbs for $600 a month and has leased computer equipment that costs $480 a month.  
-Refer to Table 13-13. What is the average fixed cost for the month if 9 instructional modules are produced?

Accepted Answer

A) $108.00 
B) $120.00 
C) $150.00 
D) $811.11 
A) $108.00 
B) $120.00 
C) $150.00 
D) $811.11

Question 18

The marginal product of labor is equal to the

Accepted Answer

A) incremental cost associated with a one unit increase in labor. 
B) incremental profit associated with a one unit increase in labor. 
C) increase in labor necessary to generate a one unit increase in output. 
D) increase in output obtained from a one unit increase in labor. 
A) incremental cost associated with a one unit increase in labor. 
B) incremental profit associated with a one unit increase in labor. 
C) increase in labor necessary to generate a one unit increase in output. 
D) increase in output obtained from a one unit increase in labor.

Question 19

Table 13-20
Listed in the table are the long-run total costs for three different firms.  
-Refer to Table 13-20. Firm A is experiencing economies of scale.

Accepted Answer

A) True 
 B)False

Question 20

What might cause diseconomies of scale?

Accepted Answer

coordinati

Table 13-4 Charles's Math Tutoring -Refer to Table 13-4. What is the marginal product of the second worker?

A difference between explicit and implicit costs is that

For a construction company that builds houses, which of the following costs would be a fixed cost?

Thirsty Thelma owns and operates a small lemonade stand. When Thelma is producing a low quantity of lemonade she has few workers and her equipment is not being fully utilized. Because she can easily put her idle resources to use,

Suppose that a worker can produce 100 units of output in 7 hours. In the 8th hour, he can produce 12 units of output. The worker can produce 112 units of output in 8 hours.

Table 13-11 -Refer to Table 13-11. The total cost of producing 1 poster is

Table 13-16 -Refer to Table 13-16. What is the total cost of producing 2 units of output?

When marginal cost is greater than average cost, average cost is

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

The value of a business owner's time is an example of

Table 13-17 Consider the following table of long-run total cost for four different firms: -Refer to Table 13-17. Which firm's long-run marginal cost decreases as output increases?

The marginal product of labor is equal to the

Table 13-20 Listed in the table are the long-run total costs for three different firms. -Refer to Table 13-20. Firm A is experiencing economies of scale.

What might cause diseconomies of scale?

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

Table 13-4 Charles's Math Tutoring -Refer to Table 13-4. What is the marginal product of the second worker?

A difference between explicit and implicit costs is that

For a construction company that builds houses, which of the following costs would be a fixed cost?

Thirsty Thelma owns and operates a small lemonade stand. When Thelma is producing a low quantity of lemonade she has few workers and her equipment is not being fully utilized. Because she can easily put her idle resources to use,

Suppose that a worker can produce 100 units of output in 7 hours. In the 8th hour, he can produce 12 units of output. The worker can produce 112 units of output in 8 hours.

Table 13-11 -Refer to Table 13-11. The total cost of producing 1 poster is

​Table 13-16 -Refer to Table 13-16. What is the total cost of producing 2 units of output?

When marginal cost is greater than average cost, average cost is

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

The value of a business owner's time is an example of

Table 13-17 Consider the following table of long-run total cost for four different firms: -Refer to Table 13-17. Which firm's long-run marginal cost decreases as output increases?

The marginal product of labor is equal to the

Table 13-20 Listed in the table are the long-run total costs for three different firms. -Refer to Table 13-20. Firm A is experiencing economies of scale.

What might cause diseconomies of scale?

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 13-16 -Refer to Table 13-16. What is the total cost of producing 2 units of output?