Question 1

The fact that many inputs are fixed in the short run but variable in the long run has little impact on the firm's cost curves.

Accepted Answer

A) True 
 B)False

Question 2

Figure 13-1   ​
​
​
-Refer to Figure 13-1. As the number of workers increases,

Accepted Answer

A) marginal product decreases. 
B) total output decreases. 
C) marginal product increases but at a decreasing rate. 
D) total output increases at an increasing rate. 
A) marginal product decreases. 
B) total output decreases. 
C) marginal product increases but at a decreasing rate. 
D) total output increases at an increasing rate.

Question 3

Table 13-9
​
​
 $$\begin{array} { | c | c | c | c | } 
\hline \begin{array} { c } 
\text { Labor } \
\text { (Number of w orkers) }
\end{array} & \begin{array} { c } 
\text { Output } \
\text { (Units) }
\end{array} & \begin{array} { c } 
\text { Fixed Cost } \
\text { (Dollars) }
\end{array} & \begin{array} { c } 
\text { Variable Cost } \
\text { (Dollars) }
\end{array} \
\hline 0 & 0 & 30 & 0 \
\hline 1 & 100 & 30 & 15 \
\hline 2 & 180 & 30 & 30 \
\hline 3 & 240 & 30 & 45 \
\hline 4 & 280 & 30 & 60 \
\hline 5 & 300 & 30 & 75 \
\hline
\end{array}$$
-Refer to Table 13-9. For the firm whose production function and costs are specified in the table, its average-variable-cost curve is

Accepted Answer

A) constant. 
B) decreasing. 
C) increasing. 
D) U-shaped. 
A) constant. 
B) decreasing. 
C) increasing. 
D) U-shaped.

Question 4

Describe the relationship between average variable cost and marginal cost.

Accepted Answer

If marginal cost (MC) is greater than av

Question 5

Bubba is a shrimp fisherman who could earn $5,000 as a fishing tour guide. Instead, he is a full-time shrimp fisherman. In calculating the economic profit of his shrimp business, the $5,000 that Bubba gave up is counted as part of the shrimp business's

Accepted Answer

A) total revenue. 
B) explicit costs. 
C) implicit costs. 
D) marginal costs. 
A) total revenue. 
B) explicit costs. 
C) implicit costs. 
D) marginal costs.

Question 6

If long-run average total cost is rising, then the firm is experiencing economies of scale.

Accepted Answer

A) True 
 B)False

Question 7

Table 13-15
 $$\begin{array} { | l | l | l | l | l | } 
\hline \text { Labor } & \text { Output } & \begin{array} { l } 
\text { Marginal } \
\text { Product }
\end{array} & \begin{array} { l } 
\text { Variable } \
\text { Cost }
\end{array} & \begin{array} { l } 
\text { Fixed } \
\text { Cost }
\end{array} \
\hline 0 & 0 & - & \$ 0 & \$ 5 \
\hline 1 & 100 & 100 & \$ 5 & \$ 5 \
\hline 2 & 250 & & \$ 10 & \$ 5 \
\hline 3 & 350 & & \$ 15 & \$ 5 \
\hline 4 & & 50 & \$ 20 & \$ 5 \
\hline 5 & & 25 & \$ 25 & \$ 5 \
\hline 6 & 430 & & \$ 30 & \$ 5 \
\hline
\end{array}$$
-Refer to Table 13-15. What is the marginal product of the sixth worker?

Accepted Answer

Total output of four workers =

Question 8

Total revenue equals

Accepted Answer

A) price × quantity. 
B) price/quantity. 
C) (price × quantity) − total cost. 
D) output − input. 
A) price × quantity. 
B) price/quantity. 
C) (price × quantity) − total cost. 
D) output − input.

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Table 13-15
 $$\begin{array} { | l | l | l | l | l | } 
\hline \text { Labor } & \text { Output } & \begin{array} { l } 
\text { Marginal } \
\text { Product }
\end{array} & \begin{array} { l } 
\text { Variable } \
\text { Cost }
\end{array} & \begin{array} { l } 
\text { Fixed } \
\text { Cost }
\end{array} \
\hline 0 & 0 & - & \$ 0 & \$ 5 \
\hline 1 & 100 & 100 & \$ 5 & \$ 5 \
\hline 2 & 250 & & \$ 10 & \$ 5 \
\hline 3 & 350 & & \$ 15 & \$ 5 \
\hline 4 & & 50 & \$ 20 & \$ 5 \
\hline 5 & & 25 & \$ 25 & \$ 5 \
\hline 6 & 430 & & \$ 30 & \$ 5 \
\hline
\end{array}$$
-Refer to Table 13-15. What is the shape of the marginal-cost curve?

Accepted Answer

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

Question 11

Average total cost is very high when a small amount of output is produced because

Accepted Answer

A) average variable cost is high. 
B) average fixed cost is high. 
C) marginal cost is high. 
D) marginal product is high. 
A) average variable cost is high. 
B) average fixed cost is high. 
C) marginal cost is high. 
D) marginal product is high.

Question 12

Describe the relationship between average total cost and marginal cost.

Accepted Answer

If marginal cost (MC) is greater than av

Question 13

Figure 13-2   ​
-Refer to Figure 13-2. Curve D represents which type of cost curve?

Accepted Answer

A) Marginal cost 
B) Average total cost 
C) Average variable cost 
D) Average fixed cost 
A) Marginal cost 
B) Average total cost 
C) Average variable cost 
D) Average fixed cost

Question 14

Scenario 13-3
Diamond is an organic brocolli farmer, but she also spends part of her day as a professional organizing consultant. As a consultant, Diamond helps people organize their houses. Due to the popularity of her home-organization services, Farmer Diamond has more clients requesting her services than she has time to help if she maintains her farming business. Farmer Diamond charges $45 an hour for her home-organization services. One spring day, Diamond spends 8 hours in her fields planting $130 worth of seeds on her farm. She expects that the seeds she planted will yield $300 worth of brocolli.
-Refer to Scenario 13-3. What is the total opportunity cost of the day that Farmer Diamond spent in the field planting brocolli?

Accepted Answer

A) $130 
B) $490 
C) $300 
D) $360 
A) $130 
B) $490 
C) $300 
D) $360

Question 15

How would a production function that exhibits decreasing marginal product affect the shape of the total cost curve? Explain or draw a graph.

Accepted Answer

The total cost curve will incr

Question 16

Tiana sells 275 candy bars at $0.50 each. Her total costs are $125. Her profits are

Accepted Answer

A) $12.50. 
B) $124.50. 
C) $125.00. 
D) $137.50. 
A) $12.50. 
B) $124.50. 
C) $125.00. 
D) $137.50.

Question 17

Omar's Car Wash has average variable costs of $4 and average fixed costs of $5 when it produces 200 units of output (car washes). The firm's total cost is

Accepted Answer

A) $800. 
B) $1,000. 
C) $200. 
D) $1,800. 
A) $800. 
B) $1,000. 
C) $200. 
D) $1,800.

Question 18

Figure 13-4
​
Figure 1
Figure 2
Figure 3
Figure 4         ​
​
-Refer to Figure 13-4. Which of the figures represents the total 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 19

The field of industrial organization addresses how the number of firms affects prices in a market and the efficiency of the market outcome.

Accepted Answer

A) True 
 B)False

Question 20

Briefly describe why measuring a firm's costs is more complicated than measuring its revenues.

Accepted Answer

A firm's revenues can be calculated by m

Exam 13: The Costs of Production

The fact that many inputs are fixed in the short run but variable in the long run has little impact on the firm's cost curves.

Figure 13-1 ​ ​ ​ -Refer to Figure 13-1. As the number of workers increases,

Describe the relationship between average variable cost and marginal cost.

Bubba is a shrimp fisherman who could earn $5,000 as a fishing tour guide. Instead, he is a full-time shrimp fisherman. In calculating the economic profit of his shrimp business, the $5,000 that Bubba gave up is counted as part of the shrimp business's

If long-run average total cost is rising, then the firm is experiencing economies of scale.

Table 13-15 Labor Output Marginal Product Variable Cost Fixed Cost 0 0 - \ 0 \ 5 1 100 100 \ 5 \ 5 2 250 \ 10 \ 5 3 350 \ 15 \ 5 4 50 \ 20 \ 5 5 25 \ 25 \ 5 6 430 \ 30 \ 5 -Refer to Table 13-15. What is the marginal product of the sixth worker?

Total revenue equals

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

Table 13-15 Labor Output Marginal Product Variable Cost Fixed Cost 0 0 - \ 0 \ 5 1 100 100 \ 5 \ 5 2 250 \ 10 \ 5 3 350 \ 15 \ 5 4 50 \ 20 \ 5 5 25 \ 25 \ 5 6 430 \ 30 \ 5 -Refer to Table 13-15. What is the shape of the marginal-cost curve?

Average total cost is very high when a small amount of output is produced because

Describe the relationship between average total cost and marginal cost.

Figure 13-2 ​ -Refer to Figure 13-2. Curve D represents which type of cost curve?

How would a production function that exhibits decreasing marginal product affect the shape of the total cost curve? Explain or draw a graph.

Tiana sells 275 candy bars at $0.50 each. Her total costs are $125. Her profits are

Omar's Car Wash has average variable costs of $4 and average fixed costs of $5 when it produces 200 units of output (car washes). The firm's total cost is

Figure 13-4 ​ Figure 1 Figure 2 Figure 3 Figure 4 ​ ​ -Refer to Figure 13-4. Which of the figures represents the total cost curve for a typical firm?

The field of industrial organization addresses how the number of firms affects prices in a market and the efficiency of the market outcome.

Briefly describe why measuring a firm's costs is more complicated than measuring its revenues.

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 Nations 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

Figure 13-1 -Refer to Figure 13-1. As the number of workers increases,

Figure 13-2 -Refer to Figure 13-2. Curve D represents which type of cost curve?

Figure 13-4 Figure 1 Figure 2 Figure 3 Figure 4 -Refer to Figure 13-4. Which of the figures represents the total cost curve for a typical firm?