Question 1

Table 13-5
  
-Refer to Table 13-5.The marginal product of the fourth worker is

Accepted Answer

A)  900 units. 
B)  800 units. 
C)  700 units. 
D)  500 units. 
A)  900 units. 
B)  800 units. 
C)  700 units. 
D)  500 units.

Question 2

If the marginal cost of producing the tenth unit of output is $2.50,and if the average total cost of producing the tenth unit of output is $3,then at ten units of output,average total cost is rising.

Accepted Answer

A) True 
 B)False

Question 3

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 4

Average total cost (ATC)is calculated as follows:

Accepted Answer

A)  ATC = (change in total cost)/(change in quantity of output). 
B)  ATC = (change in total cost)/(change in quantity of input). 
C)  ATC = (total cost)/(quantity of output). 
D)  ATC = (total cost)/(quantity of input). 
A)  ATC = (change in total cost)/(change in quantity of output). 
B)  ATC = (change in total cost)/(change in quantity of input). 
C)  ATC = (total cost)/(quantity of output). 
D)  ATC = (total cost)/(quantity of input).

Question 5

When a firm is experiencing economies of scale,long-run

Accepted Answer

A)  average total cost is minimized. 
B)  average total cost is greater than long-run marginal cost. 
C)  average total cost is less than long-run marginal cost. 
D)  marginal cost is minimized. 
A)  average total cost is minimized. 
B)  average total cost is greater than long-run marginal cost. 
C)  average total cost is less than long-run marginal cost. 
D)  marginal cost is minimized.

Question 6

For a large firm that produces and sells automobiles,which of the following costs would be a variable cost?

Accepted Answer

A)  the $20 million payment that the firm pays each year for accounting services 
B)  the cost of the steel that is used in producing automobiles 
C)  the rent that the firm pays for office space in a suburb of St. Louis 
D)  All of the above are correct. 
A)  the $20 million payment that the firm pays each year for accounting services 
B)  the cost of the steel that is used in producing automobiles 
C)  the rent that the firm pays for office space in a suburb of St. Louis 
D)  All of the above are correct.

Question 7

Figure 13-3
  
-Refer to Figure 13-3.Assuming that the firm depicted produces cookies,which of the statements below is most consistent with the shape of the total cost curve?

Accepted Answer

A)  Producing an additional cookie is always more costly than producing the previous cookie. 
B)  Total production of cookies decreases with additional units of input. 
C)  Producing additional cookies is equally costly, regardless of how many cookies are already being produced. 
D)  Producing additional cookies becomes increasingly costly only when the number of cookies already being produced is large. 
A)  Producing an additional cookie is always more costly than producing the previous cookie. 
B)  Total production of cookies decreases with additional units of input. 
C)  Producing additional cookies is equally costly, regardless of how many cookies are already being produced. 
D)  Producing additional cookies becomes increasingly costly only when the number of cookies already being produced is large.

Question 8

When economists speak of a firm's costs,they are usually excluding the opportunity costs.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A)  $30 
B)  $120 
C)  $220 
D)  $270 
A)  $30 
B)  $120 
C)  $220 
D)  $270

Question 10

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.What is the marginal cost of creating the tenth instructional module in a given month?

Accepted Answer

A)  $900 
B)  $1,250 
C)  $2,500 
D)  $3,060 
A)  $900 
B)  $1,250 
C)  $2,500 
D)  $3,060

Question 11

Randy is a minor-league baseball player.His current cumulative batting average is 0.270.Randy believes that if he can raise his cumulative batting average to 0.300,he will have a chance to play in the major leagues.Which of the following statements is correct?

Accepted Answer

A)  If Randy gets between 27 and 30 hits out of his next 100 at bats, he will be able to raise his cumulative batting average to 0.300. 
B)  If Randy gets 30 hits out of his next 100 at bats, he will be able to raise his cumulative batting average to 0.300. 
C)  Randy must get more than 30 hits out of his next 100 at bats in order to raise his cumulative batting average to 0.300. 
D)  Either b or c could be correct. 
A)  If Randy gets between 27 and 30 hits out of his next 100 at bats, he will be able to raise his cumulative batting average to 0.300. 
B)  If Randy gets 30 hits out of his next 100 at bats, he will be able to raise his cumulative batting average to 0.300. 
C)  Randy must get more than 30 hits out of his next 100 at bats in order to raise his cumulative batting average to 0.300. 
D)  Either b or c could be correct.

Question 12

Economists assume that the goal of the firm is to maximize total

Accepted Answer

A)  revenue. 
B)  profits. 
C)  costs. 
D)  satisfaction. 
A)  revenue. 
B)  profits. 
C)  costs. 
D)  satisfaction.

Question 13

Table 13-6
Wooden Chair Factory
  
-Refer to Table 13-6.Each worker at the Wooden Chair Factory costs $12 per hour.The cost of each machine is $20 per day regardless of the number of chairs produced.If the factory produces at a rate of 70 chairs per hour and operates 8 hours per day,what is the factory's total labor cost per day?

Accepted Answer

A)  $72 
B)  $112 
C)  $576 
D)  $616 
A)  $72 
B)  $112 
C)  $576 
D)  $616

Question 14

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 15

Scenario 13-2
Chelsea wants to start her own Christmas ornament business. She can purchase a suitable factory that costs $100,000. Chelsea currently has $150,000 in the bank earning 3 percent interest per year.
-Refer to Scenario 13-2.Suppose Chelsea purchases the factory using $50,000 of her own money and $50,000 borrowed from a bank at an interest rate of 6 percent.What is Chelsea's annual opportunity cost of purchasing the factory?

Accepted Answer

A)  $2,000 
B)  $3,000 
C)  $4,500 
D)  $5,000 
A)  $2,000 
B)  $3,000 
C)  $4,500 
D)  $5,000

Question 16

What effect,if any,does diminishing marginal product have on the shape of the marginal cost curve?

Accepted Answer

Diminishing marginal

Question 17

When calculating a firm's profit,an economist will subtract only

Accepted Answer

A)  explicit costs from total revenue because these are the only costs that can be measured explicitly. 
B)  implicit costs from total revenue because these include both the costs that can be directly measured as well as the costs that can be indirectly measured. 
C)  the opportunity costs from total revenue because these include both the implicit and explicit costs of the firm. 
D)  the marginal cost because the cost of the next unit is the only relevant cost. 
A)  explicit costs from total revenue because these are the only costs that can be measured explicitly. 
B)  implicit costs from total revenue because these include both the costs that can be directly measured as well as the costs that can be indirectly measured. 
C)  the opportunity costs from total revenue because these include both the implicit and explicit costs of the firm. 
D)  the marginal cost because the cost of the next unit is the only relevant cost.

Question 18

Suppose that a firm has only one variable input,labor,and firm output is zero when labor is zero.When the firm hires 6 workers the firm produces 90 units of output.Fixed costs of production are $6 and the variable cost per unit of labor is $10.The marginal product of the seventh unit of labor is 4.Given this information,what is the average variable cost of production when the firm hires 7 workers?

Accepted Answer

A)  $12.67 
B)  $11 
C)  81 cents 
D)  75 cents 
A)  $12.67 
B)  $11 
C)  81 cents 
D)  75 cents

Question 19

The shape of the marginal cost curve tells a producer something about the marginal product of her workers.

Accepted Answer

A) True 
 B)False

Question 20

Figure 13-3
  
-Refer to Figure 13-3.Which of the following is true of the production function (not pictured)that underlies this total cost function?
(i)Total output increases as the quantity of inputs increases but at a decreasing rate.
(ii)Marginal product is diminishing for all levels of input usage.
(iii)The slope of the production function decreases as the quantity of inputs increases.

Accepted Answer

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

Table 13-5 -Refer to Table 13-5.The marginal product of the fourth worker is

If the marginal cost of producing the tenth unit of output is $2.50,and if the average total cost of producing the tenth unit of output is $3,then at ten units of output,average total cost is rising.

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

Average total cost (ATC)is calculated as follows:

When a firm is experiencing economies of scale,long-run

For a large firm that produces and sells automobiles,which of the following costs would be a variable cost?

Figure 13-3 -Refer to Figure 13-3.Assuming that the firm depicted produces cookies,which of the statements below is most consistent with the shape of the total cost curve?

When economists speak of a firm's costs,they are usually excluding the opportunity costs.

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

Randy is a minor-league baseball player.His current cumulative batting average is 0.270.Randy believes that if he can raise his cumulative batting average to 0.300,he will have a chance to play in the major leagues.Which of the following statements is correct?

Economists assume that the goal of the firm is to maximize total

Variable cost divided by the change in quantity produced is

What effect,if any,does diminishing marginal product have on the shape of the marginal cost curve?

When calculating a firm's profit,an economist will subtract only

The shape of the marginal cost curve tells a producer something about the marginal product of her workers.

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 13-5 -Refer to Table 13-5.The marginal product of the fourth worker is

If the marginal cost of producing the tenth unit of output is $2.50,and if the average total cost of producing the tenth unit of output is $3,then at ten units of output,average total cost is rising.

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

Average total cost (ATC)is calculated as follows:

When a firm is experiencing economies of scale,long-run

For a large firm that produces and sells automobiles,which of the following costs would be a variable cost?

Figure 13-3 -Refer to Figure 13-3.Assuming that the firm depicted produces cookies,which of the statements below is most consistent with the shape of the total cost curve?

When economists speak of a firm's costs,they are usually excluding the opportunity costs.

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

Randy is a minor-league baseball player.His current cumulative batting average is 0.270.Randy believes that if he can raise his cumulative batting average to 0.300,he will have a chance to play in the major leagues.Which of the following statements is correct?

Economists assume that the goal of the firm is to maximize total

Variable cost divided by the change in quantity produced is

What effect,if any,does diminishing marginal product have on the shape of the marginal cost curve?

When calculating a firm's profit,an economist will subtract only

The shape of the marginal cost curve tells a producer something about the marginal product of her workers.

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