Question 1

Can economic profit ever exceed accounting profit?

Accepted Answer

No. Economic profit = Accounting profit

Question 2

Describe the difference between the short run and the long run.

Accepted Answer

In the short run, the firm con

Question 3

Figure 1
b.
Figure 2
c.
Figure 3
d.
Figure 4
ANSWER:
d
DIFFICULTY:
Moderate
LEARNING OBJECTIVES:
ECON.MANK.174 - Given a graph of the production function and input costs, derive the firm's total-cost curve.
TOPICS:
Producer theory
Production function
KEYWORDS:
BLOOM'S: Comprehension
CUSTOM ID:
178.13.3 - MC - MANK08
Figure 13-8  
-Refer to Figure 13-8. Which of the following statements is correct?

Accepted Answer

A) Average total cost is rising for quantities higher than D because marginal cost is higher than average total cost. 
B) Average variable cost is declining for quantities less than B because marginal cost is lower than average variable cost. 
C) Average variable cost is minimized at B because at that quantity, marginal cost equals average variable cost. 
D) All of the above are correct. 
A) Average total cost is rising for quantities higher than D because marginal cost is higher than average total cost. 
B) Average variable cost is declining for quantities less than B because marginal cost is lower than average variable cost. 
C) Average variable cost is minimized at B because at that quantity, marginal cost equals average variable cost. 
D) All of the above are correct.

Question 4

Scenario 13-20
Suppose that a given firm experiences decreasing marginal product of labor with the addition of each worker regardless of the current output level.
-Refer to Scenario 13-20. Average variable cost will be

Accepted Answer

A) rising at all points. 
B) falling at all points. 
C) U-shaped. 
D) constant. 
A) rising at all points. 
B) falling at all points. 
C) U-shaped. 
D) constant.

Question 5

Table 13-3  
-Refer to Table 13-3. The marginal product of the third worker is

Accepted Answer

A) 230 units. 
B) 100 units. 
C) 77 units. 
D) 60 units. 
A) 230 units. 
B) 100 units. 
C) 77 units. 
D) 60 units.

Question 6

Scenario 13-8
Wanda owns a lemonade stand. She produces lemonade using five inputs: water, sugar, lemons, paper cups, and labor. Her costs per glass are as follows: $0.01 for water, $0.02 for sugar, $0.03 for lemons, $0.02 for cups, and $0.10 for the opportunity cost of her labor. She can sell 300 glasses for $0.50 each.
-Refer to Scenario 13-8. What are Wanda's total accounting profits?

Accepted Answer

A) $150 
B) $126 
C) $96 
D) $24 
A) $150 
B) $126 
C) $96 
D) $24

Question 7

Table 13-14  
-Refer to Table 13-14. What is the average variable cost of producing 3 units of output?

Accepted Answer

A) $20 
B) $30 
C) $35 
D) $60 
A) $20 
B) $30 
C) $35 
D) $60

Question 8

If marginal cost is greater than average total cost, then

Accepted Answer

A) profits are increasing. 
B) economies of scale are becoming greater. 
C) average total cost remains constant. 
D) average total cost is increasing. 
A) profits are increasing. 
B) economies of scale are becoming greater. 
C) average total cost remains constant. 
D) average total cost is increasing.

Question 9

Average total cost will increase if __________.

Accepted Answer

marginal c

Question 10

How would a production function that exhibits decreasing marginal product affect the shape of the total cost curve? Explain or draw a graph.

Accepted Answer

The total cost curve will incr

Question 11

Diminishing marginal product suggests that

Accepted Answer

A) additional units of output become less costly as more output is produced. 
B) marginal cost is upward sloping. 
C) the firm is at full capacity. 
D) adding additional workers will lower total cost. 
A) additional units of output become less costly as more output is produced. 
B) marginal cost is upward sloping. 
C) the firm is at full capacity. 
D) adding additional workers will lower total cost.

Question 12

Table 13-14  
-Refer to Table 13-14. What is the average total cost of producing 2 units of output?

Accepted Answer

A) $15 
B) $19 
C) $24 
D) $48 
A) $15 
B) $19 
C) $24 
D) $48

Question 13

Economic profit

Accepted Answer

A) will never exceed accounting profit. 
B) is most often equal to accounting profit. 
C) is always at least as large as accounting profit. 
D) is a less complete measure of profitability than accounting profit. 
A) will never exceed accounting profit. 
B) is most often equal to accounting profit. 
C) is always at least as large as accounting profit. 
D) is a less complete measure of profitability than accounting profit.

Question 14

Figure 13-5  
-Refer to Figure 13-5. Curve D represents which type of cost curve?

Accepted Answer

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

Question 15

Define profit.

Accepted Answer

Profit = T

Question 16

​Economies of scale commonly arise because of coordination problems.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

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

Question 18

Marginal cost equals

Accepted Answer

A) total cost divided by quantity of output produced. 
B) total output divided by the change in total cost. 
C) the slope of the total cost curve. 
D) the slope of the line drawn from the origin to the total cost curve. 
A) total cost divided by quantity of output produced. 
B) total output divided by the change in total cost. 
C) the slope of the total cost curve. 
D) the slope of the line drawn from the origin to the total cost curve.

Question 19

Riva crafts and sells hard cider as a part-time job. She can bottle and sell four cases in a week. She is considering hiring her friend Atul to help her. Atul can bottle and sell three cases per week. What is the maximum total output possible if Riva hires Atul?

Accepted Answer

A) 3 cases 
B) 4 cases 
C) 7 cases 
D) 11 cases 
A) 3 cases 
B) 4 cases 
C) 7 cases 
D) 11 cases

Question 20

Total revenue equals

Accepted Answer

A) marginal revenue - marginal cost. 
B) price/quantity. 
C) price x quantity. 
D) output - input. 
A) marginal revenue - marginal cost. 
B) price/quantity. 
C) price x quantity. 
D) output - input.

Can economic profit ever exceed accounting profit?

Describe the difference between the short run and the long run.

Scenario 13-20 Suppose that a given firm experiences decreasing marginal product of labor with the addition of each worker regardless of the current output level. -Refer to Scenario 13-20. Average variable cost will be

Table 13-3 -Refer to Table 13-3. The marginal product of the third worker is

Table 13-14 -Refer to Table 13-14. What is the average variable cost of producing 3 units of output?

If marginal cost is greater than average total cost, then

Average total cost will increase if __________.

How would a production function that exhibits decreasing marginal product affect the shape of the total cost curve? Explain or draw a graph.

Diminishing marginal product suggests that

Table 13-14 -Refer to Table 13-14. What is the average total cost of producing 2 units of output?

Economic profit

Figure 13-5 -Refer to Figure 13-5. Curve D represents which type of cost curve?

Define profit.

Economies of scale commonly arise because of coordination problems.

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

Marginal cost equals

Riva crafts and sells hard cider as a part-time job. She can bottle and sell four cases in a week. She is considering hiring her friend Atul to help her. Atul can bottle and sell three cases per week. What is the maximum total output possible if Riva hires Atul?

Total revenue equals

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

Can economic profit ever exceed accounting profit?

Describe the difference between the short run and the long run.

Scenario 13-20 Suppose that a given firm experiences decreasing marginal product of labor with the addition of each worker regardless of the current output level. -Refer to Scenario 13-20. Average variable cost will be

Table 13-3 -Refer to Table 13-3. The marginal product of the third worker is

Table 13-14 -Refer to Table 13-14. What is the average variable cost of producing 3 units of output?

If marginal cost is greater than average total cost, then

Average total cost will increase if __________.

How would a production function that exhibits decreasing marginal product affect the shape of the total cost curve? Explain or draw a graph.

Diminishing marginal product suggests that

Table 13-14 -Refer to Table 13-14. What is the average total cost of producing 2 units of output?

Economic profit

Figure 13-5 -Refer to Figure 13-5. Curve D represents which type of cost curve?

Define profit.

​Economies of scale commonly arise because of coordination problems.

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

Marginal cost equals

Riva crafts and sells hard cider as a part-time job. She can bottle and sell four cases in a week. She is considering hiring her friend Atul to help her. Atul can bottle and sell three cases per week. What is the maximum total output possible if Riva hires Atul?

Total revenue equals

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

Economies of scale commonly arise because of coordination problems.