Question 1

Table 13-14  
-Refer to Table 13-14. What is the average fixed cost of producing 8 units of output?

Accepted Answer

A) $1.25 
B) $3.13 
C) $20.00 
D) $24.37 
A) $1.25 
B) $3.13 
C) $20.00 
D) $24.37

Question 2

Variable costs equal fixed costs when nothing is produced.

Accepted Answer

A) True 
 B)False

Question 3

Cindy's Car Wash has average variable costs of $2 and average total costs of $3 when it produces 100 units of output (car washes). The firm's total variable cost is

Accepted Answer

A) $100. 
B) $200. 
C) $300. 
D) $500. 
A) $100. 
B) $200. 
C) $300. 
D) $500.

Question 4

Figure 13-9
The figure below depicts average total cost functions for a firm that produces automobiles.  
-Refer to Figure 13-9. At levels of output between M and N, the firm experiences

Accepted Answer

A) economies of scale. 
B) diseconomies of scale. 
C) constant returns to scale. 
D) both the benefits of specialization and diminishing marginal productivity. 
A) economies of scale. 
B) diseconomies of scale. 
C) constant returns to scale. 
D) both the benefits of specialization and diminishing marginal productivity.

Question 5

Which of the following statements is not correct?

Accepted Answer

A) The marginal cost of the fifth unit of output equals the total cost of five units minus the total cost of four units. 
B) The total variable cost of seven units equals the average variable cost of seven units times seven. 
C) If marginal cost is rising, then average variable cost must be rising. 
D) The marginal cost of the fifth unit of output equals the total variable cost of five units minus the total variable cost of four units. 
A) The marginal cost of the fifth unit of output equals the total cost of five units minus the total cost of four units. 
B) The total variable cost of seven units equals the average variable cost of seven units times seven. 
C) If marginal cost is rising, then average variable cost must be rising. 
D) The marginal cost of the fifth unit of output equals the total variable cost of five units minus the total variable cost of four units.

Question 6

Johnny is a sophomore in college and has a 1.5 cumulative grade point average (GPA). Johnny's cumulative GPA will fall even further next semester if he performs worse than (i)
His cumulative GPa.(ii)
He ever performed before.(iii)
He did last semester.

Accepted Answer

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

Question 7

Variable cost divided by the change in quantity produced is

Accepted Answer

A) average variable cost. 
B) marginal cost. 
C) average total cost. 
D) None of the above is correct. 
A) average variable cost. 
B) marginal cost. 
C) average total cost. 
D) None of the above is correct.

Question 8

As Bubba's Bubble Gum Company adds workers while using the same amount of machinery, some workers may be underutilized because they have little work to do while waiting in line to use the machinery. When this occurs, Bubba's Bubble Gum Company encounters

Accepted Answer

A) economies of scale. 
B) diseconomies of scale. 
C) increasing marginal product. 
D) diminishing marginal product. 
A) economies of scale. 
B) diseconomies of scale. 
C) increasing marginal product. 
D) diminishing marginal product.

Question 9

Table 13-11  
-Refer to Table 13-11. What is the variable cost of producing 0 posters?

Accepted Answer

A) $0 
B) $1 
C) $10 
D) $100 
A) $0 
B) $1 
C) $10 
D) $100

Question 10

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

Accepted Answer

A) $110 
B) $120 
C) $220 
D) $270 
A) $110 
B) $120 
C) $220 
D) $270

Question 11

Which of the following can be added to profit to obtain total revenue?

Accepted Answer

A) net profit 
B) capital profit 
C) operational profit 
D) total cost 
A) net profit 
B) capital profit 
C) operational profit 
D) total cost

Question 12

Scenario 13-11
Walter builds birdhouses. He spends $5 on the materials for each birdhouse. He can build one in 30 minutes. He is semi-retired but earns $8 per hour at the local hardware store. He can sell a birdhouse for $20 each.
-Refer to Scenario 13-11. An economist would calculate the total cost for one birdhouse to be

Accepted Answer

A) $5. 
B) $8. 
C) $9. 
D) $13. 
A) $5. 
B) $8. 
C) $9. 
D) $13.

Question 13

Table 13-11  
-Refer to Table 13-11. The marginal cost of producing the 6th poster is

Accepted Answer

A) $1.00. 
B) $3.50. 
C) $5.00. 
D) $6.00. 
A) $1.00. 
B) $3.50. 
C) $5.00. 
D) $6.00.

Question 14

An example of an explicit cost would be the wages that a business owner pays her employees.

Accepted Answer

A) True 
 B)False

Question 15

Table 13-2  
-Refer to Table 13-2. What is the marginal product of the second worker?

Accepted Answer

A) 300 units 
B) 200 units 
C) 100 units 
D) 50 units 
A) 300 units 
B) 200 units 
C) 100 units 
D) 50 units

Question 16

Figure 13-3  
-Refer to Figure 13-3. Assuming that the firm depicted produces cookies, which of the statements below is most consistent with the shape of the total cost curve?

Accepted Answer

A) Producing an additional cookie is always more costly than producing the previous cookie. 
B) Total production of cookies decreases with additional units of input. 
C) Producing additional cookies is equally costly, regardless of how many cookies are already being produced. 
D) Producing additional cookies becomes increasingly costly only when the number of cookies already being produced is large. 
A) Producing an additional cookie is always more costly than producing the previous cookie. 
B) Total production of cookies decreases with additional units of input. 
C) Producing additional cookies is equally costly, regardless of how many cookies are already being produced. 
D) Producing additional cookies becomes increasingly costly only when the number of cookies already being produced is large.

Question 17

Figure 1
b.
Figure 2
c.
Figure 3
d.
Figure 4
ANSWER:
b
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 costs
KEYWORDS:
BLOOM'S: Comprehension
CUSTOM ID:
176.13.3 - MC - MANK08
-Refer to Figure 13-7. Which of the figures represents the marginal cost curve 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 18

Scenario 13-14
If Farmer Brown plants no seeds on his farm, he gets no harvest. If he plants 1 bag of seeds, he gets 5 bushels of wheat. If he plants 2 bags, he gets 9 bushels. If he plants 3 bags, he gets 12 bushels. A bag of seeds costs $120, and seeds are his only cost.
-Refer to Scenario 13-14. Farmer Brown's production function exhibits

Accepted Answer

A) increasing marginal product. 
B) constant marginal product. 
C) diminishing marginal product. 
D) The production function is unrelated to the marginal product. 
A) increasing marginal product. 
B) constant marginal product. 
C) diminishing marginal product. 
D) The production function is unrelated to the marginal product.

Question 19

How long does it take a firm to go from the short run to the long run?

Accepted Answer

A) six months 
B) one year 
C) two years 
D) It depends on the nature of the firm. 
A) six months 
B) one year 
C) two years 
D) It depends on the nature of the firm.

Question 20

Economists normally assume that the goal of a firm is to

Accepted Answer

A) maximize its total revenue. 
B) maximize its profit. 
C) minimize its explicit costs. 
D) minimize its total cost. 
A) maximize its total revenue. 
B) maximize its profit. 
C) minimize its explicit costs. 
D) minimize its total cost.

Table 13-14 -Refer to Table 13-14. What is the average fixed cost of producing 8 units of output?

Variable costs equal fixed costs when nothing is produced.

Cindy's Car Wash has average variable costs of $2 and average total costs of $3 when it produces 100 units of output (car washes). The firm's total variable cost is

Figure 13-9 The figure below depicts average total cost functions for a firm that produces automobiles. -Refer to Figure 13-9. At levels of output between M and N, the firm experiences

Which of the following statements is not correct?

Johnny is a sophomore in college and has a 1.5 cumulative grade point average (GPA). Johnny's cumulative GPA will fall even further next semester if he performs worse than (i) His cumulative GPa.(ii) He ever performed before.(iii) He did last semester.

Variable cost divided by the change in quantity produced is

As Bubba's Bubble Gum Company adds workers while using the same amount of machinery, some workers may be underutilized because they have little work to do while waiting in line to use the machinery. When this occurs, Bubba's Bubble Gum Company encounters

Table 13-11 -Refer to Table 13-11. What is the variable cost of producing 0 posters?

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

Which of the following can be added to profit to obtain total revenue?

Table 13-11 -Refer to Table 13-11. The marginal cost of producing the 6th poster is

An example of an explicit cost would be the wages that a business owner pays her employees.

Table 13-2 -Refer to Table 13-2. What is the marginal product of the second worker?

Figure 13-3 -Refer to Figure 13-3. Assuming that the firm depicted produces cookies, which of the statements below is most consistent with the shape of the total cost curve?

How long does it take a firm to go from the short run to the long run?

Economists normally assume that the goal of a firm is to

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

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Exam 13: The Costs of Production

Table 13-14 -Refer to Table 13-14. What is the average fixed cost of producing 8 units of output?

Variable costs equal fixed costs when nothing is produced.

Cindy's Car Wash has average variable costs of $2 and average total costs of $3 when it produces 100 units of output (car washes). The firm's total variable cost is

Figure 13-9 The figure below depicts average total cost functions for a firm that produces automobiles. -Refer to Figure 13-9. At levels of output between M and N, the firm experiences

Which of the following statements is not correct?

Johnny is a sophomore in college and has a 1.5 cumulative grade point average (GPA). Johnny's cumulative GPA will fall even further next semester if he performs worse than (i) His cumulative GPa.(ii) He ever performed before.(iii) He did last semester.

Variable cost divided by the change in quantity produced is

As Bubba's Bubble Gum Company adds workers while using the same amount of machinery, some workers may be underutilized because they have little work to do while waiting in line to use the machinery. When this occurs, Bubba's Bubble Gum Company encounters

Table 13-11 -Refer to Table 13-11. What is the variable cost of producing 0 posters?

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

Which of the following can be added to profit to obtain total revenue?

Table 13-11 -Refer to Table 13-11. The marginal cost of producing the 6th poster is

An example of an explicit cost would be the wages that a business owner pays her employees.

Table 13-2 -Refer to Table 13-2. What is the marginal product of the second worker?

Figure 13-3 -Refer to Figure 13-3. Assuming that the firm depicted produces cookies, which of the statements below is most consistent with the shape of the total cost curve?

How long does it take a firm to go from the short run to the long run?

Economists normally assume that the goal of a firm is to

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