Question 1

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

Accepted Answer

A)  $60 
B)  $135 
C)  $240 
D)  $270 
A)  $60 
B)  $135 
C)  $240 
D)  $270

Question 2

A firm's total profit equals its marginal revenue minus its marginal cost.

Accepted Answer

A) True 
 B)False

Question 3

Scenario 13-9
Jessica makes photo frames. She spends $5 on the materials for each photo frame. She can create one photo frame in an hour. She earns $10 per hour at a part-time job at the local coffee shop. She can sell a photo frame for $30 each.
-Refer to Scenario 13-9.An economist would calculate the total cost for one photo frame to be

Accepted Answer

A)  $5. 
B)  $10. 
C)  $15. 
D)  $25. 
A)  $5. 
B)  $10. 
C)  $15. 
D)  $25.

Question 4

Scenario 13-7
Wanda owns a lemonade stand. She produces lemonade using five inputs: water, sugar, lemons, paper cups, and labor. Her costs per glass are as follows: $0.01 for water, $0.02 for sugar, $0.03 for lemons, $0.02 for cups, and $0.10 for the opportunity cost of her labor. She can sell 300 glasses for $0.50 each.
-Refer to Scenario 13-7.What are Wanda's total accounting profits?

Accepted Answer

A)  $150 
B)  $126 
C)  $96 
D)  $24 
A)  $150 
B)  $126 
C)  $96 
D)  $24

Question 5

John has decided to start his own lawn-mowing business.To purchase the mowers and the trailer to transport the mowers,John withdrew $1,000 from his savings account,which was earning 3% interest,and borrowed an additional $2,000 from the bank at an interest rate of 7%.What is John's annual opportunity cost of the financial capital that has been invested in the business?

Accepted Answer

A)  $30 
B)  $140 
C)  $170 
D)  $300 
A)  $30 
B)  $140 
C)  $170 
D)  $300

Question 6

Table 13-12
Betty's Bakery
  
-Refer to Table 13-12.What is the total cost of producing 7 cakes at Betty's Bakery?

Accepted Answer

A)  $140 
B)  $150 
C)  $153 
D)  $158 
A)  $140 
B)  $150 
C)  $153 
D)  $158

Question 7

If marginal cost is greater than average total cost,then

Accepted Answer

A)  profits are increasing. 
B)  economies of scale are becoming greater. 
C)  average total cost remains constant. 
D)  average total cost is increasing. 
A)  profits are increasing. 
B)  economies of scale are becoming greater. 
C)  average total cost remains constant. 
D)  average total cost is increasing.

Question 8

In the long run Al's Sandwich Shop incurs total costs of $2,500 when output is 1,250 units and $3,000 when output is 1,500 units.For this range of output,Al's 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 9

On a 100-acre farm,a farmer is able to produce 3,000 bushels of wheat when he hires 2 workers.He is able to produce 4,400 bushels of wheat when he hires 3 workers.Which of the following possibilities is consistent with the property of diminishing marginal product?

Accepted Answer

A)  The farmer is able to produce 5,600 bushels of wheat when he hires 4 workers. 
B)  The farmer is able to produce 5,400 bushels of wheat when he hires 4 workers. 
C)  The farmer is able to produce 5,200 bushels of wheat when he hires 4 workers. 
D)  Any of the above could be correct. 
A)  The farmer is able to produce 5,600 bushels of wheat when he hires 4 workers. 
B)  The farmer is able to produce 5,400 bushels of wheat when he hires 4 workers. 
C)  The farmer is able to produce 5,200 bushels of wheat when he hires 4 workers. 
D)  Any of the above could be correct.

Question 10

The marginal-cost curve intersects the average-total-cost curve at the minimum point of the marginal-cost curve.

Accepted Answer

A) True 
 B)False

Question 11

The marginal-cost curve intersects the average-total-cost curve at the output level where average fixed costs are zero.

Accepted Answer

A) True 
 B)False

Question 12

The marginal product of any input is the

Accepted Answer

A)  increase in total cost associated with a one-unit increase in production. 
B)  change in total output associated with a $1.00 increase in total cost. 
C)  increase in total cost resulting from the hiring of an additional worker. 
D)  increase in total output obtained from one additional unit of that input. 
A)  increase in total cost associated with a one-unit increase in production. 
B)  change in total output associated with a $1.00 increase in total cost. 
C)  increase in total cost resulting from the hiring of an additional worker. 
D)  increase in total output obtained from one additional unit of that input.

Question 13

Table 13-11
Teacher's Helper is a small company that has a subcontract to produce instructional materials for disabled children in public school districts. The owner rents several small rooms in an office building in the suburbs for $600 a month and has leased computer equipment that costs $480 a month.
  
-Refer to Table 13-11.One month,Teacher's Helper produced 18 instructional modules.What was the average fixed cost for that month?

Accepted Answer

A)  $60 
B)  $108 
C)  $811 
D)  It can't be determined from the information given. 
A)  $60 
B)  $108 
C)  $811 
D)  It can't be determined from the information given.

Question 14

Suppose a firm currently produces 225 units of output per day with 15 workers.The firm is able to produce 235 units of output with a 16th worker.What is the marginal product of the 16th worker?

Accepted Answer

A)  10 units of output 
B)  15 units of output 
C)  16 units of output 
D)  25 units of output 
A)  10 units of output 
B)  15 units of output 
C)  16 units of output 
D)  25 units of output

Question 15

Which of the following is not a property of a firm's cost curves?

Accepted Answer

A)  Marginal cost must eventually rise as a result of diminishing marginal product. 
B)  Average total cost is U-shaped. 
C)  Economies of scale will exist when average total cost falls as output rises. 
D)  Average total cost will cross marginal cost at the minimum of marginal cost. 
A)  Marginal cost must eventually rise as a result of diminishing marginal product. 
B)  Average total cost is U-shaped. 
C)  Economies of scale will exist when average total cost falls as output rises. 
D)  Average total cost will cross marginal cost at the minimum of marginal cost.

Question 16

When marginal cost is less than average total cost,

Accepted Answer

A)  marginal cost must be falling. 
B)  average variable cost must be falling. 
C)  average total cost is falling. 
D)  average total cost is rising. 
A)  marginal cost must be falling. 
B)  average variable cost must be falling. 
C)  average total cost is falling. 
D)  average total cost is rising.

Question 17

In the long run,

Accepted Answer

A)  inputs that were fixed in the short run remain fixed. 
B)  inputs that were fixed in the short run become variable. 
C)  inputs that were variable in the short run become fixed. 
D)  variable inputs are rarely used. 
A)  inputs that were fixed in the short run remain fixed. 
B)  inputs that were fixed in the short run become variable. 
C)  inputs that were variable in the short run become fixed. 
D)  variable inputs are rarely used.

Question 18

Trevor's Tire Company produced and sold 500 tires.The average cost of production per tire was $50.Each tire sold for a price of $65.Trevor's Tire Company's total profits are

Accepted Answer

A)  $7,500. 
B)  $25,000. 
C)  $32,500. 
D)  $67,500. 
A)  $7,500. 
B)  $25,000. 
C)  $32,500. 
D)  $67,500.

Question 19

Variable costs equal fixed costs when nothing is produced.

Accepted Answer

A) True 
 B)False

Question 20

In the short run,a firm that produces and sells cell phones can adjust

Accepted Answer

A)  how many workers to hire. 
B)  the size of its factories. 
C)  where to produce along its long-run average-total-cost curve. 
D)  All of the above are correct. 
A)  how many workers to hire. 
B)  the size of its factories. 
C)  where to produce along its long-run average-total-cost curve. 
D)  All of the above are correct.

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

A firm's total profit equals its marginal revenue minus its marginal cost.

Table 13-12 Betty's Bakery -Refer to Table 13-12.What is the total cost of producing 7 cakes at Betty's Bakery?

If marginal cost is greater than average total cost,then

In the long run Al's Sandwich Shop incurs total costs of $2,500 when output is 1,250 units and $3,000 when output is 1,500 units.For this range of output,Al's exhibits

On a 100-acre farm,a farmer is able to produce 3,000 bushels of wheat when he hires 2 workers.He is able to produce 4,400 bushels of wheat when he hires 3 workers.Which of the following possibilities is consistent with the property of diminishing marginal product?

The marginal-cost curve intersects the average-total-cost curve at the minimum point of the marginal-cost curve.

The marginal-cost curve intersects the average-total-cost curve at the output level where average fixed costs are zero.

The marginal product of any input is the

Suppose a firm currently produces 225 units of output per day with 15 workers.The firm is able to produce 235 units of output with a 16th worker.What is the marginal product of the 16th worker?

Which of the following is not a property of a firm's cost curves?

When marginal cost is less than average total cost,

In the long run,

Trevor's Tire Company produced and sold 500 tires.The average cost of production per tire was $50.Each tire sold for a price of $65.Trevor's Tire Company's total profits are

Variable costs equal fixed costs when nothing is produced.

In the short run,a firm that produces and sells cell phones can adjust

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.

Application: 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 Market For the Factors of Production.

Earnings and Discrimination.

Income Inequality and Poverty.

The Theory of Consumer Choice.

Frontiers in Microeconomics.

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Exam 13: The Costs of Production.

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

A firm's total profit equals its marginal revenue minus its marginal cost.

Table 13-12 Betty's Bakery -Refer to Table 13-12.What is the total cost of producing 7 cakes at Betty's Bakery?

If marginal cost is greater than average total cost,then

In the long run Al's Sandwich Shop incurs total costs of $2,500 when output is 1,250 units and $3,000 when output is 1,500 units.For this range of output,Al's exhibits

On a 100-acre farm,a farmer is able to produce 3,000 bushels of wheat when he hires 2 workers.He is able to produce 4,400 bushels of wheat when he hires 3 workers.Which of the following possibilities is consistent with the property of diminishing marginal product?

The marginal-cost curve intersects the average-total-cost curve at the minimum point of the marginal-cost curve.

The marginal-cost curve intersects the average-total-cost curve at the output level where average fixed costs are zero.

The marginal product of any input is the

Suppose a firm currently produces 225 units of output per day with 15 workers.The firm is able to produce 235 units of output with a 16th worker.What is the marginal product of the 16th worker?

Which of the following is not a property of a firm's cost curves?

When marginal cost is less than average total cost,

In the long run,

Trevor's Tire Company produced and sold 500 tires.The average cost of production per tire was $50.Each tire sold for a price of $65.Trevor's Tire Company's total profits are

Variable costs equal fixed costs when nothing is produced.

In the short run,a firm that produces and sells cell phones can adjust

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.

Application: 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 Market For the Factors of Production.

Earnings and Discrimination.

Income Inequality and Poverty.

The Theory of Consumer Choice.

Frontiers in Microeconomics.

Filters