Question 1

Exhibit 21-13
​
  
-Refer to Exhibit 21-13. What dollar amounts go in blanks (P) and (Q), respectively?

Accepted Answer

A) $120; $125 
B) $10; 95 
C) $30; $80 
D) $93.33; $82.50 
E) There is not enough information to answer this question. 
A) $120; $125 
B) $10; 95 
C) $30; $80 
D) $93.33; $82.50 
E) There is not enough information to answer this question. D

Question 2

Which of the following statements is false?

Accepted Answer

A) If the MC curve is rising, the AVC curve must be rising. 
B) If MC is below ATC, ATC must be falling. 
C) If MC is above AVC, then AVC must be rising. 
D) If MC is above ATC, then ATC must be rising. 
A) If the MC curve is rising, the AVC curve must be rising. 
B) If MC is below ATC, ATC must be falling. 
C) If MC is above AVC, then AVC must be rising. 
D) If MC is above ATC, then ATC must be rising. A

Question 3

Exhibit 21-1
  
-Refer to Exhibit 21-l. The numbers that go in blanks (C) and (D) are, respectively,

Accepted Answer

A) 25 and 20. 
B) 20 and 22. 
C) 25 and 24. 
D) 22 and 20. 
E) none of the above 
A) 25 and 20. 
B) 20 and 22. 
C) 25 and 24. 
D) 22 and 20. 
E) none of the above A

Question 4

Economic profit is

Accepted Answer

A) total revenue minus total cost (including both explicit and implicit costs). 
B) the same as accounting profit. 
C) accounting profit plus implicit costs. 
D) accounting profit minus implicit costs. 
E) a and d 
A) total revenue minus total cost (including both explicit and implicit costs). 
B) the same as accounting profit. 
C) accounting profit plus implicit costs. 
D) accounting profit minus implicit costs. 
E) a and d

Question 5

Exhibit 21-5
​
  
-Refer to Exhibit 21-5. Constant returns to scale are present between

Accepted Answer

A) points A and B. 
B) points A and C. 
C) points B and C. 
D) points B and D. 
E) points C and D. 
A) points A and B. 
B) points A and C. 
C) points B and C. 
D) points B and D. 
E) points C and D.

Question 6

If AFC is $8 at a quantity of output of 1,000 units, and ATC is $12 at the same level of output, it follows that

Accepted Answer

A) marginal cost is $10. 
B) AVC is $4,000. 
C) total cost is $4,000. 
D) marginal cost is $1,000. 
E) AVC is $4. 
A) marginal cost is $10. 
B) AVC is $4,000. 
C) total cost is $4,000. 
D) marginal cost is $1,000. 
E) AVC is $4.

Question 7

Exhibit 21-4
​
  
-Refer to Exhibit 21-4. Curve A is a(n) __________ cost curve.

Accepted Answer

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

Question 8

Cy recently went into the business of producing and selling cardboard boxes. For this business, which of the following is most likely to be a fixed cost?

Accepted Answer

A) fire insurance 
B) labor costs 
C) paper costs 
D) adhesive costs 
E) b, c, and d are equally likely to be fixed costs 
A) fire insurance 
B) labor costs 
C) paper costs 
D) adhesive costs 
E) b, c, and d are equally likely to be fixed costs

Question 9

If output rises from 175 units per hour to 193 units per hour as another worker is hired and the additional worker receives $25 in wages per hour, assuming that labor is the only variable input, it follows that marginal cost is

Accepted Answer

A) $450 
B) $4,825 
C) $4,375 
D) $45 
E) $0.45 
A) $450 
B) $4,825 
C) $4,375 
D) $45 
E) $0.45

Question 10

Exhibit 21-12
​
  
-Refer to Exhibit 21-12 above. The numbers that go in blanks (A), (B), (C), and (D), respectively, are

Accepted Answer

A) 12, 13, 14 and 12. 
B) 12, 25, 39 and 51. 
C) 12, 11, 10 and 9. 
D) 12, 14, 13 and 11. 
E) none of the above 
A) 12, 13, 14 and 12. 
B) 12, 25, 39 and 51. 
C) 12, 11, 10 and 9. 
D) 12, 14, 13 and 11. 
E) none of the above

Question 11

The change in output that results from changing a variable input by one unit, holding all other inputs fixed, is called the marginal __________ product of the variable input.

Accepted Answer

A) physical 
B) value 
C) average 
D) explicit 
A) physical 
B) value 
C) average 
D) explicit

Question 12

Marginal cost is the change in

Accepted Answer

A) total cost that results from a change in output. 
B) total revenue that results from a change in output. 
C) fixed cost that results from a change in output. 
D) a and b 
E) all of the above 
A) total cost that results from a change in output. 
B) total revenue that results from a change in output. 
C) fixed cost that results from a change in output. 
D) a and b 
E) all of the above

Question 13

Working alone, a person who shirks receives __________ the benefits of shirking and pays __________ the costs of shirking.

Accepted Answer

A) all; only some of 
B) only part of; all 
C) all; all 
D) only part of; only part of 
E) none of the above 
A) all; only some of 
B) only part of; all 
C) all; all 
D) only part of; only part of 
E) none of the above

Question 14

Exhibit 21-13
​
  
-Refer to Exhibit 21-13. What dollar amounts go in blanks (E) and (F), respectively?

Accepted Answer

A) $200; $30 
B) $40; $80 
C) $200; $15 
D) $3; $40 
E) There is not enough information to answer this question. 
A) $200; $30 
B) $40; $80 
C) $200; $15 
D) $3; $40 
E) There is not enough information to answer this question.

Question 15

A rise in variable input prices will affect

Accepted Answer

A) fixed costs. 
B) variable costs. 
C) marginal costs. 
D) a, b, and c 
E) b and c 
A) fixed costs. 
B) variable costs. 
C) marginal costs. 
D) a, b, and c 
E) b and c

Question 16

The __________ hand is the metaphor used to refer to market coordination, whereas the __________ hand is the metaphor used to refer to managerial coordination.

Accepted Answer

A) visible; fast 
B) invisible; visible 
C) fast; lazy 
D) lazy; fast 
E) none of the above 
A) visible; fast 
B) invisible; visible 
C) fast; lazy 
D) lazy; fast 
E) none of the above

Question 17

Exhibit 21-9
​
  
-Refer to Exhibit 21-9. Let MC1 and ATC1 represent the initial cost curves of an aluminum can producer. In which of the following cases is it most likely that the curves will shift rightward from MC1, and ATC1 to MC3 and ATC3?

Accepted Answer

A) A new tax of $0.03 per can is imposed on the producer. 
B) There is an increase in energy costs. 
C) A new supplier offers to supply aluminum to the firm at a lower price. 
D) a and b 
A) A new tax of $0.03 per can is imposed on the producer. 
B) There is an increase in energy costs. 
C) A new supplier offers to supply aluminum to the firm at a lower price. 
D) a and b

Question 18

One of the roles of the monitor in a firm is to reduce shirking.

Accepted Answer

A) True 
 B)False

Question 19

A fixed input, X, and a variable input, Y, are used to produce good A. If the marginal physical product (MPP) of Y is constant, it follows that the

Accepted Answer

A) marginal cost curve is upward sloping. 
B) total fixed cost curve is vertical. 
C) total variable cost curve is downward sloping. 
D) b and c 
E) none of the above 
A) marginal cost curve is upward sloping. 
B) total fixed cost curve is vertical. 
C) total variable cost curve is downward sloping. 
D) b and c 
E) none of the above

Question 20

Exhibit 21-14
   Assume that labor is the only variable input and that each additional laborer is paid $600.
-Refer to Exhibit 21-14. What is the marginal cost of producing this good with 3 and 4 laborers working [blanks (G) and (H)], respectively?

Accepted Answer

A) $200; $150 
B) $60; $30 
C) $12; $40 
D) $6; $8 
E) none of the above 
A) $200; $150 
B) $60; $30 
C) $12; $40 
D) $6; $8 
E) none of the above

Exam 21: Production and Costs

Exhibit 21-13 ​ -Refer to Exhibit 21-13. What dollar amounts go in blanks (P) and (Q), respectively?

Which of the following statements is false?

Exhibit 21-1 -Refer to Exhibit 21-l. The numbers that go in blanks (C) and (D) are, respectively,

Economic profit is

Exhibit 21-5 ​ -Refer to Exhibit 21-5. Constant returns to scale are present between

If AFC is $8 at a quantity of output of 1,000 units, and ATC is $12 at the same level of output, it follows that

Exhibit 21-4 ​ -Refer to Exhibit 21-4. Curve A is a(n) __________ cost curve.

Cy recently went into the business of producing and selling cardboard boxes. For this business, which of the following is most likely to be a fixed cost?

If output rises from 175 units per hour to 193 units per hour as another worker is hired and the additional worker receives $25 in wages per hour, assuming that labor is the only variable input, it follows that marginal cost is

Exhibit 21-12 ​ -Refer to Exhibit 21-12 above. The numbers that go in blanks (A), (B), (C), and (D), respectively, are

The change in output that results from changing a variable input by one unit, holding all other inputs fixed, is called the marginal __________ product of the variable input.

Marginal cost is the change in

Working alone, a person who shirks receives __________ the benefits of shirking and pays __________ the costs of shirking.

Exhibit 21-13 ​ -Refer to Exhibit 21-13. What dollar amounts go in blanks (E) and (F), respectively?

A rise in variable input prices will affect

The __________ hand is the metaphor used to refer to market coordination, whereas the __________ hand is the metaphor used to refer to managerial coordination.

Exhibit 21-9 ​ -Refer to Exhibit 21-9. Let MC1 and ATC1 represent the initial cost curves of an aluminum can producer. In which of the following cases is it most likely that the curves will shift rightward from MC1, and ATC1 to MC3 and ATC3?

One of the roles of the monitor in a firm is to reduce shirking.

A fixed input, X, and a variable input, Y, are used to produce good A. If the marginal physical product (MPP) of Y is constant, it follows that the

Exhibit 21-14 Assume that labor is the only variable input and that each additional laborer is paid $600. -Refer to Exhibit 21-14. What is the marginal cost of producing this good with 3 and 4 laborers working [blanks (G) and (H)], respectively?

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand Theory

Prices Free Controlled and Relative

Supply Demand and Price Applications

Macroeconomic Measurements Part I Prices and Unemployment

Macroeconomic Measurements Part II Gdp and Real Gdp

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self Regulating Economy

Keynesian Macroeconomics and Economic Instability a Critique of the Self Regulating Economy

Fiscal Policy and the Federal Budget

Money Banking and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth Resources Technology Ideas and Institutions

Debates in Macroeconomics Over the Role and Effects of Government

Elasticity

Consumer Choice and Behavioral Economics

Perfect Competition

Monopoly

Monopolistic Competition Oligopoly and Game Theory

Government and Product Markets Antitrust and Regulation

Factor Markets With Emphasis on the Labor Market

Wages Unions and Labor

The Distribution of Income and Poverty

Interest Rent and Profit

Market Failure Externalities Public Goods and Asymmetric Information

Public Choice and Special Interest Group Politics

Building Theories to Explain Everyday Life From Observations to Questions to Theories to Predictions

International Trade

International Finance

The Economic Case for and Against Government Five Topics Considered

Stocks Bonds Futures and Options

Filters

Exhibit 21-13 -Refer to Exhibit 21-13. What dollar amounts go in blanks (P) and (Q), respectively?

Exhibit 21-5 -Refer to Exhibit 21-5. Constant returns to scale are present between

Exhibit 21-4 -Refer to Exhibit 21-4. Curve A is a(n) __________ cost curve.

Exhibit 21-12 -Refer to Exhibit 21-12 above. The numbers that go in blanks (A), (B), (C), and (D), respectively, are

Working alone, a person who shirks receives the benefits of shirking and pays the costs of shirking.

Exhibit 21-13 -Refer to Exhibit 21-13. What dollar amounts go in blanks (E) and (F), respectively?

The hand is the metaphor used to refer to market coordination, whereas the hand is the metaphor used to refer to managerial coordination.

Exhibit 21-9 -Refer to Exhibit 21-9. Let MC₁ and ATC₁ represent the initial cost curves of an aluminum can producer. In which of the following cases is it most likely that the curves will shift rightward from MC₁, and ATC₁ to MC₃ and ATC₃?