Question 1

Table 13-18  
-Refer to Table 13-18. What is the shape of the marginal-cost curve?

Accepted Answer

MC = change in TC / change in Q, so alth

Question 2

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 when the firm hires 2 workers, the total cost of production is $100. When the firm hires 3 workers, the total cost of production is $120. In addition, assume that the variable cost per unit of labor is the same regardless of the number of units of labor that are hired. What is the firm's fixed cost?

Accepted Answer

A) $40 
B) $60 
C) $80 
D) $100 
A) $40 
B) $60 
C) $80 
D) $100

Question 3

Explicit costs

Accepted Answer

A) do not require an outlay of money by the firm. 
B) enter into the accountant's measurement of a firm's profit. 
C) enter into the economist's measurement of a firm's profit. 
D) Both b and c are correct. 
A) do not require an outlay of money by the firm. 
B) enter into the accountant's measurement of a firm's profit. 
C) enter into the economist's measurement of a firm's profit. 
D) Both b and c are correct.

Question 4

Which of the following statements is correct?

Accepted Answer

A) Opportunity costs equal explicit minus implicit costs. 
B) Economists consider opportunity costs to be included in a firm's total revenues. 
C) Economists consider opportunity costs to be included in a firm's costs of production. 
D) All of the above are correct. 
A) Opportunity costs equal explicit minus implicit costs. 
B) Economists consider opportunity costs to be included in a firm's total revenues. 
C) Economists consider opportunity costs to be included in a firm's costs of production. 
D) All of the above are correct.

Question 5

Which of the following is the best example of a variable cost?

Accepted Answer

A) monthly wage payments for hired labor 
B) annual property tax payments for a building 
C) monthly rent payments for a warehouse 
D) annual insurance payments for a warehouse 
A) monthly wage payments for hired labor 
B) annual property tax payments for a building 
C) monthly rent payments for a warehouse 
D) annual insurance payments for a warehouse

Question 6

In the long run the local coffee shop incurs total costs of $625 when output is 1,250 cups of coffee and $750 when output is 1,500 cups of coffee. For this range of output, the coffee shop exhibits

Accepted Answer

A) economies of scale. 
B) constant returns to scale. 
C) diseconomies of scale. 
D) efficient scale. 
A) economies of scale. 
B) constant returns to scale. 
C) diseconomies of scale. 
D) efficient scale.

Question 7

Which of the following measures of cost is best described as "the increase in total cost that arises from an extra unit of production?"

Accepted Answer

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

Question 8

Table 13-6
Wooden Chair Factory  
-Refer to Table 13-6. Each worker at the Wooden Chair Factory costs $12 per hour. The cost of each machine is $20 per day regardless of the number of chairs produced. If the factory produces at a rate of 35 chairs per hour, what is the total labor cost per hour?

Accepted Answer

A) $40 
B) $48 
C) $384 
D) $424 
A) $40 
B) $48 
C) $384 
D) $424

Question 9

​​​Table 13-7  
-Refer to Table 13-7. What is the marginal product of the sixth worker? ​

Accepted Answer

A) ​215 
B) ​30 
C) ​25 
D) ​190 
A) ​215 
B) ​30 
C) ​25 
D) ​190

Question 10

Figure 13-9
The figure below depicts average total cost functions for a firm that produces automobiles.  
-Refer to Figure 13-9. Which curve represents the long-run average total cost?

Accepted Answer

A) ATCA 
B) ATCB 
C) ATCC 
D) ATCD 
A) ATCA 
B) ATCB 
C) ATCC 
D) ATCD

Question 11

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

Accepted Answer

A) the $20 per hour wage paid to a construction foreman 
B) the $30,000 per year salary paid to the company's bookkeeper 
C) the $2 per worker-hour paid to the state government for workers' compensation insurance 
D) All of the above are correct. 
A) the $20 per hour wage paid to a construction foreman 
B) the $30,000 per year salary paid to the company's bookkeeper 
C) the $2 per worker-hour paid to the state government for workers' compensation insurance 
D) All of the above are correct.

Question 12

When comparing short-run average total cost with long-run average total cost at a given level of output,

Accepted Answer

A) short-run average total cost is typically above long-run average total cost. 
B) short-run average total cost is typically the same as long-run average total cost. 
C) short-run average total cost is typically below long-run average total cost. 
D) the relationship between short-run and long-run average total cost follows no clear pattern. 
A) short-run average total cost is typically above long-run average total cost. 
B) short-run average total cost is typically the same as long-run average total cost. 
C) short-run average total cost is typically below long-run average total cost. 
D) the relationship between short-run and long-run average total cost follows no clear pattern.

Question 13

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

Accepted Answer

In the short run, the firm con

Question 14

Table 13-10  
-Refer to Table 13-10. The average variable cost of producing 240 units of output is

Accepted Answer

A) $0.06. 
B) $0.38. 
C) $0.44. 
D) $30. 
A) $0.06. 
B) $0.38. 
C) $0.44. 
D) $30.

Question 15

An example of an opportunity cost that is also an implicit cost is

Accepted Answer

A) a lease payment. 
B) the cost of raw materials. 
C) the value of the business owner's time. 
D) All of the above are correct. 
A) a lease payment. 
B) the cost of raw materials. 
C) the value of the business owner's time. 
D) All of the above are correct.

Question 16

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

Accepted Answer

A) 10 
B) 30 
C) 45 
D) 75 
A) 10 
B) 30 
C) 45 
D) 75

Question 17

A production function describes

Accepted Answer

A) how a firm maximizes profits. 
B) how a firm turns inputs into output. 
C) the minimal cost of producing a given level of output. 
D) the relationship between cost and output. 
A) how a firm maximizes profits. 
B) how a firm turns inputs into output. 
C) the minimal cost of producing a given level of output. 
D) the relationship between cost and output.

Question 18

At Bert's Bootery, the total cost of producing twenty pairs of boots is $400. The marginal cost of producing the twenty-first pair of boots is $83. We can conclude that the

Accepted Answer

A) average variable cost of 21 pairs of boots is $23. 
B) average total cost of 21 pairs of boots is $23. 
C) average total cost of 21 pairs of boots is $15.09. 
D) marginal cost of the 20th pair of boots is $20. 
A) average variable cost of 21 pairs of boots is $23. 
B) average total cost of 21 pairs of boots is $23. 
C) average total cost of 21 pairs of boots is $15.09. 
D) marginal cost of the 20th pair of boots is $20.

Question 19

If marginal cost is equal to average total cost, then

Accepted Answer

A) marginal cost is minimized. 
B) average total cost is minimized. 
C) average variable cost is minimized. 
D) marginal cost is zero. 
A) marginal cost is minimized. 
B) average total cost is minimized. 
C) average variable cost is minimized. 
D) marginal cost is zero.

Question 20

Which of the following would be an example of an implicit cost?
(i)forgone investment opportunities
(ii)wages of workers
(iii)raw materials costs

Accepted Answer

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

Exam 13: The Costs of Production

Table 13-18 -Refer to Table 13-18. What is the shape of the marginal-cost curve?

Explicit costs

Which of the following statements is correct?

Which of the following is the best example of a variable cost?

In the long run the local coffee shop incurs total costs of $625 when output is 1,250 cups of coffee and $750 when output is 1,500 cups of coffee. For this range of output, the coffee shop exhibits

Which of the following measures of cost is best described as "the increase in total cost that arises from an extra unit of production?"

Table 13-6 Wooden Chair Factory -Refer to Table 13-6. Each worker at the Wooden Chair Factory costs $12 per hour. The cost of each machine is $20 per day regardless of the number of chairs produced. If the factory produces at a rate of 35 chairs per hour, what is the total labor cost per hour?

​​​Table 13-7 -Refer to Table 13-7. What is the marginal product of the sixth worker? ​

Figure 13-9 The figure below depicts average total cost functions for a firm that produces automobiles. -Refer to Figure 13-9. Which curve represents the long-run average total cost?

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

When comparing short-run average total cost with long-run average total cost at a given level of output,

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

Table 13-10 -Refer to Table 13-10. The average variable cost of producing 240 units of output is

An example of an opportunity cost that is also an implicit cost is

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

A production function describes

At Bert's Bootery, the total cost of producing twenty pairs of boots is $400. The marginal cost of producing the twenty-first pair of boots is $83. We can conclude that the

If marginal cost is equal to average total cost, then

Which of the following would be an example of an implicit cost? (i)forgone investment opportunities (ii)wages of workers (iii)raw materials costs

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

Applications: 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

Measuring a Nation S Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters

Table 13-7 -Refer to Table 13-7. What is the marginal product of the sixth worker?