Exam 13: The Costs of Production

The Three Amigo's company produced and sold 500 dog beds. The average cost of production per dog bed was $50. Each dog be sold for a price of $65. The Three Amigo's total costs are

If a firm produces nothing, which of the following costs will be zero?

​​​Table 13-7 -Refer to Table 13-7. What is total output when 5 workers are hired?​

The firm's efficient scale is the quantity of output that minimizes

Which is greater -- economic profit or accounting profit?

For a typical firm, fixed costs increase in direct proportion to the increases in output.

Table 13-19 -Refer to Table 13-19. What is the total output of five workers?

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

In the short run, a firm incurs fixed costs

Table 13-9 -Refer to Table 13-9. For the firm whose production function and costs are specified in the table, its average-variable-cost curve is

Katherine gives piano lessons for $20 per hour. She also grows flowers, which she arranges and sells at the local farmer's market. One day she spends 5 hours planting $50 worth of seeds in her garden. Once the seeds have grown into flowers, she can sell them for $150 at the farmer's market. Katherine's accounting profits are

In his book, An Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith described a visit he made to a

Table 13-8 -Refer to Table 13-8. What is the shape of the marginal cost curve for this firm?

If the average total cost curve is falling, what is necessarily true of the marginal cost curve? If the average total cost curve is rising, what is necessarily true of the marginal cost curve?

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

Economists and accountants both include forgone income as a cost to a small business owner.

Scenario 13-9 Ellie has been working for an engineering firm and earning an annual salary of $80,000. She decides to open her own engineering business. Her annual expenses will include $15,000 for office rent, $3,000 for equipment rental, $1,000 for supplies, $1,200 for utilities, and a $35,000 salary for a secretary/bookkeeper. Ellie will cover her start-up expenses by cashing in a $20,000 certificate of deposit on which she was earning annual interest of $500. -Refer to Scenario 13-9. Ellie's annual accounting costs will equal

Table 13-19 -Refer to Table 13-19. What is the shape of this firm's total-cost curve?

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

In setting the production level, a firm's cost curves