Question 1

The average-total-cost curve is unaffected by diminishing marginal product.

Accepted Answer

A) True 
 B)False

Question 2

Table 13-14  
-Refer to Table 13-14. What is the fixed cost of production for this firm?

Accepted Answer

A) $10 
B) $20 
C) $23 
D) $33 
A) $10 
B) $20 
C) $23 
D) $33

Question 3

Table 13-18  
-Refer to Table 13-18. What is the total output of four workers?

Accepted Answer

450 + 50 =

Question 4

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

Accepted Answer

A) $40 
B) $140 
C) $360 
D) $410 
A) $40 
B) $140 
C) $360 
D) $410

Question 5

Scenario 13-17
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 13-17. Farmer Brown's marginal cost of producing 9 units of output (using 2 bags of seed) is

Accepted Answer

A) $240. 
B) $120. 
C) $40. 
D) $30. 
A) $240. 
B) $120. 
C) $40. 
D) $30.

Question 6

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 7

The Wacky Widget company has total fixed costs of $100,000 per year. The firm's average variable cost is $10 for 10,000 widgets. At that level of output, the firm's average total costs equal

Accepted Answer

A) $10 
B) $15 
C) $20 
D) $25 
A) $10 
B) $15 
C) $20 
D) $25

Question 8

Pete owns a shoe-shine business. Which of the following costs would be implicit costs?
(i)shoe polish
(ii)rent on the shoe stand
(iii)wages Pete could earn delivering newspapers
(iv)interest that Pete's money was earning before he spent his savings to set up the shoe-shine business

Accepted Answer

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

Question 9

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 10

Table 13-2  
-Refer to Table 13-2. What is the marginal product of the first 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 11

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

Accepted Answer

A) True 
 B)False

Question 12

Table 13-15  
-Refer to Table 13-15. What is average variable cost when output is 50 units?

Accepted Answer

A) $3.60 
B) $4.00 
C) $4.40 
D) $4.80 
A) $3.60 
B) $4.00 
C) $4.40 
D) $4.80

Question 13

What might cause diseconomies of scale?

Accepted Answer

coordinati

Question 14

The marginal product of an input in the production process is the increase in

Accepted Answer

A) total revenue obtained from an additional unit of that input. 
B) profit obtained from an additional unit of that input. 
C) Total revenue obtained from an additional unit of that input. 
D) quantity of output obtained from an additional unit of that input. 
A) total revenue obtained from an additional unit of that input. 
B) profit obtained from an additional unit of that input. 
C) Total revenue obtained from an additional unit of that input. 
D) quantity of output obtained from an additional unit of that input.

Question 15

Table 13-15  
-Refer to Table 13-15. What is the total fixed cost for this firm?

Accepted Answer

A) $20 
B) $30 
C) $40 
D) $50 
A) $20 
B) $30 
C) $40 
D) $50

Question 16

Scenario 13-6
Ziva is an organic lettuce farmer, but she also spends part of her day as a professional organizing consultant. As a consultant, Ziva helps people organize their houses. Due to the popularity of her home-organization services, Farmer Ziva has more clients requesting her services than she has time to help if she maintains her farming business. Farmer Ziva charges $25 an hour for her home-organization services. One spring day, Ziva spends 10 hours in her fields planting $130 worth of seeds on her farm. She expects that the seeds she planted will yield $300 worth of lettuce.
-Refer to Scenario 13-6. Ziva's accounting profit from farming equals

Accepted Answer

A) $-80. 
B) $130. 
C) $170. 
D) $260. 
A) $-80. 
B) $130. 
C) $170. 
D) $260.

Question 17

Sonia opened a yoga studio where she teaches classes and sells yoga clothing. Fixed costs for Sonia's yoga studio include the cost of the
(i)tank tops.
(ii)wages paid to the other yoga instructors.
(iii)lease on the studio space.
(iv)insurance that the landlord requires Sonia to carry for the studio.

Accepted Answer

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

Question 18

Table 13-17
Consider the following table of long-run total cost for four different firms:  
-Refer to Table 13-17. Which firm has diseconomies of scale over the entire range of output?

Accepted Answer

A) Firm 1 only 
B) Firm 2 only 
C) Firms 1 and 2 only 
D) Firm 3 only 
A) Firm 1 only 
B) Firm 2 only 
C) Firms 1 and 2 only 
D) Firm 3 only

Question 19

Describe the relationship between average variable cost and marginal cost.

Accepted Answer

If marginal cost (MC) is greater than av

Question 20

Harry's Hotdogs is a small street vendor business owned by Harry Huggins. Harry is trying to get a better understanding of his costs by categorizing them as fixed or variable. Which of the following costs are most likely to be considered fixed costs?

Accepted Answer

A) the cost of mustard 
B) the cost of hotdog buns 
C) wages paid to workers who sell hot dogs 
D) the cost of bookkeeping services 
A) the cost of mustard 
B) the cost of hotdog buns 
C) wages paid to workers who sell hot dogs 
D) the cost of bookkeeping services

Exam 13: The Costs of Production

The average-total-cost curve is unaffected by diminishing marginal product.

Table 13-14 -Refer to Table 13-14. What is the fixed cost of production for this firm?

Table 13-18 -Refer to Table 13-18. What is the total output of four workers?

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

Variable cost divided by the change in quantity produced is

The Wacky Widget company has total fixed costs of $100,000 per year. The firm's average variable cost is $10 for 10,000 widgets. At that level of output, the firm's average total costs equal

Pete owns a shoe-shine business. Which of the following costs would be implicit costs? (i)shoe polish (ii)rent on the shoe stand (iii)wages Pete could earn delivering newspapers (iv)interest that Pete's money was earning before he spent his savings to set up the shoe-shine business

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

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

Table 13-15 -Refer to Table 13-15. What is average variable cost when output is 50 units?

What might cause diseconomies of scale?

The marginal product of an input in the production process is the increase in

Table 13-15 -Refer to Table 13-15. What is the total fixed cost for this firm?

Table 13-17 Consider the following table of long-run total cost for four different firms: -Refer to Table 13-17. Which firm has diseconomies of scale over the entire range of output?

Describe the relationship between average variable cost and marginal cost.

Harry's Hotdogs is a small street vendor business owned by Harry Huggins. Harry is trying to get a better understanding of his costs by categorizing them as fixed or variable. Which of the following costs are most likely to be considered fixed 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

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