Question 1

The marginal product of labor is equal to the

Accepted Answer

A)  incremental cost associated with a one unit increase in labor. 
B)  incremental profit associated with a one unit increase in labor. 
C)  increase in labor necessary to generate a one unit increase in output. 
D)  increase in output obtained from a one unit increase in labor. 
A)  incremental cost associated with a one unit increase in labor. 
B)  incremental profit associated with a one unit increase in labor. 
C)  increase in labor necessary to generate a one unit increase in output. 
D)  increase in output obtained from a one unit increase in labor.

Question 2

The long-run average total cost curve is always

Accepted Answer

A)  flatter than the short-run average total cost curve, but not necessarily horizontal. 
B)  horizontal. 
C)  falling as output increases. 
D)  rising as output increases. 
A)  flatter than the short-run average total cost curve, but not necessarily horizontal. 
B)  horizontal. 
C)  falling as output increases. 
D)  rising as output increases.

Question 3

A firm produces 300 units of output at a total cost of $1,000.If fixed costs are $100,

Accepted Answer

A)  average fixed cost is $10. 
B)  average variable cost is $3. 
C)  average total cost is $4. 
D)  average total cost is $5. 
A)  average fixed cost is $10. 
B)  average variable cost is $3. 
C)  average total cost is $4. 
D)  average total cost is $5.

Question 4

Table 13-6
Wooden Chair Factory
  
-Refer to Table 13-6.The Wooden Chair Factory experiences diminishing marginal product of labor with the addition of which worker?

Accepted Answer

A)  the third worker 
B)  the fourth worker 
C)  the fifth worker 
D)  the sixth worker 
A)  the third worker 
B)  the fourth worker 
C)  the fifth worker 
D)  the sixth worker

Question 5

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.Assume the number of machines does not change.If the factory produces at a rate of 78 chairs per hour,what is the total machine cost per day?

Accepted Answer

A)  $20 
B)  $40 
C)  $240 
D)  We are unable to determine total machine costs from the information given. 
A)  $20 
B)  $40 
C)  $240 
D)  We are unable to determine total machine costs from the information given.

Question 6

Variable cost divided by quantity produced is

Accepted Answer

A)  average total cost. 
B)  marginal cost. 
C)  profit. 
D)  None of the above is correct. 
A)  average total cost. 
B)  marginal cost. 
C)  profit. 
D)  None of the above is correct.

Question 7

A production function is a relationship between inputs and

Accepted Answer

A)  quantity of output. 
B)  revenue. 
C)  costs. 
D)  profit. 
A)  quantity of output. 
B)  revenue. 
C)  costs. 
D)  profit.

Question 8

Wiladee used to work as an office manager,earning $25,000 per year.She gave up that job to start a tailoring business.In calculating the economic profit of her tailoring business,the $25,000 income that she gave up is counted as part of the tailoring firm's

Accepted Answer

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

Question 9

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 average fixed cost for the month if 9 instructional modules are produced?

Accepted Answer

A)  $108.00 
B)  $120.00 
C)  $150.00 
D)  $811.11 
A)  $108.00 
B)  $120.00 
C)  $150.00 
D)  $811.11

Question 10

Table 13-10
Eileen's Elegant Earrings produces pairs of earrings for its mail order catalogue business. Each pair is shipped in a separate box. She rents a small room for $150 a week in the downtown business district that serves as her factory. She can hire workers for $275 a week. There are no implicit costs.
  
-Refer to Table 13-10.One week,Eileen earns a profit of $125.If her revenue for the week is $1100,how many boxes of earrings did she produce?

Accepted Answer

A)  140 
B)  330 
C)  780 
D)  950 
A)  140 
B)  330 
C)  780 
D)  950

Question 11

A firm's opportunity costs of production are equal to its

Accepted Answer

A)  explicit costs only. 
B)  implicit costs only. 
C)  explicit costs + implicit costs. 
D)  explicit costs + implicit costs + total revenue. 
A)  explicit costs only. 
B)  implicit costs only. 
C)  explicit costs + implicit costs. 
D)  explicit costs + implicit costs + total revenue.

Question 12

An example of an opportunity cost that is also an implicit cost is

Accepted Answer

A)  a lease payment. 
B)  the cost of raw materials. 
C)  the value of the business owner's time. 
D)  All of the above are correct. 
A)  a lease payment. 
B)  the cost of raw materials. 
C)  the value of the business owner's time. 
D)  All of the above are correct.

Question 13

When a firm experiences diseconomies of scale,

Accepted Answer

A)  short-run average total cost is minimized. 
B)  long-run average total cost is minimized. 
C)  long-run average total cost increases as output increases. 
D)  long-run average total cost decreases as output increases. 
A)  short-run average total cost is minimized. 
B)  long-run average total cost is minimized. 
C)  long-run average total cost increases as output increases. 
D)  long-run average total cost decreases as output increases.

Question 14

Table 13-13
  
-Refer to Table 13-13.What is variable cost when output equals 30 units?

Accepted Answer

A)  $4 
B)  $40 
C)  $90 
D)  $130 
A)  $4 
B)  $40 
C)  $90 
D)  $130

Question 15

Table 13-12
Betty's Bakery
  
-Refer to Table 13-12.What is the variable cost of producing 8 cakes at Betty's Bakery?

Accepted Answer

A)  $120 
B)  $140 
C)  $155 
D)  $160 
A)  $120 
B)  $140 
C)  $155 
D)  $160

Question 16

The amount of money that a firm receives from the sale of its output is called

Accepted Answer

A)  total gross profit. 
B)  total net profit. 
C)  total revenue. 
D)  net revenue. 
A)  total gross profit. 
B)  total net profit. 
C)  total revenue. 
D)  net revenue.

Question 17

Suppose Jan started up a small lemonade stand business last month.Variable costs for Jan's lemonade stand now include the cost of

Accepted Answer

A)  lemons and sugar. 
B)  paper cups. 
C)  the wages paid to her hourly workers. 
D)  All of the above are correct. 
A)  lemons and sugar. 
B)  paper cups. 
C)  the wages paid to her hourly workers. 
D)  All of the above are correct.

Question 18

Economies of scale occur when

Accepted Answer

A)  long-run average total costs rise as output increases. 
B)  long-run average total costs fall as output increases. 
C)  average fixed costs are falling. 
D)  average fixed costs are constant. 
A)  long-run average total costs rise as output increases. 
B)  long-run average total costs fall as output increases. 
C)  average fixed costs are falling. 
D)  average fixed costs are constant.

Question 19

Table 13-10
Eileen's Elegant Earrings produces pairs of earrings for its mail order catalogue business. Each pair is shipped in a separate box. She rents a small room for $150 a week in the downtown business district that serves as her factory. She can hire workers for $275 a week. There are no implicit costs.
  
-Refer to Table 13-10.What is the total cost associated with making 890 boxes of earrings per week?

Accepted Answer

A)  $1,250 
B)  $1,325 
C)  $1,400 
D)  $1,575 
A)  $1,250 
B)  $1,325 
C)  $1,400 
D)  $1,575

Question 20

Brady Industries has average variable costs of $1 and average total costs of $3 when it produces 500 units of output.The firm's total fixed costs equal

Accepted Answer

A)  $2. 
B)  $4. 
C)  $1,000. 
D)  $2,000. 
A)  $2. 
B)  $4. 
C)  $1,000. 
D)  $2,000.

The marginal product of labor is equal to the

The long-run average total cost curve is always

A firm produces 300 units of output at a total cost of $1,000.If fixed costs are $100,

Table 13-6 Wooden Chair Factory -Refer to Table 13-6.The Wooden Chair Factory experiences diminishing marginal product of labor with the addition of which worker?

Variable cost divided by quantity produced is

A production function is a relationship between inputs and

Wiladee used to work as an office manager,earning $25,000 per year.She gave up that job to start a tailoring business.In calculating the economic profit of her tailoring business,the $25,000 income that she gave up is counted as part of the tailoring firm's

A firm's opportunity costs of production are equal to its

An example of an opportunity cost that is also an implicit cost is

When a firm experiences diseconomies of scale,

Table 13-13 -Refer to Table 13-13.What is variable cost when output equals 30 units?

Table 13-12 Betty's Bakery -Refer to Table 13-12.What is the variable cost of producing 8 cakes at Betty's Bakery?

The amount of money that a firm receives from the sale of its output is called

Suppose Jan started up a small lemonade stand business last month.Variable costs for Jan's lemonade stand now include the cost of

Economies of scale occur when

Brady Industries has average variable costs of $1 and average total costs of $3 when it produces 500 units of output.The firm's total fixed costs equal

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.

The marginal product of labor is equal to the

The long-run average total cost curve is always

A firm produces 300 units of output at a total cost of $1,000.If fixed costs are $100,

Table 13-6 Wooden Chair Factory -Refer to Table 13-6.The Wooden Chair Factory experiences diminishing marginal product of labor with the addition of which worker?

Variable cost divided by quantity produced is

A production function is a relationship between inputs and

Wiladee used to work as an office manager,earning $25,000 per year.She gave up that job to start a tailoring business.In calculating the economic profit of her tailoring business,the $25,000 income that she gave up is counted as part of the tailoring firm's

A firm's opportunity costs of production are equal to its

An example of an opportunity cost that is also an implicit cost is

When a firm experiences diseconomies of scale,

Table 13-13 -Refer to Table 13-13.What is variable cost when output equals 30 units?

Table 13-12 Betty's Bakery -Refer to Table 13-12.What is the variable cost of producing 8 cakes at Betty's Bakery?

The amount of money that a firm receives from the sale of its output is called

Suppose Jan started up a small lemonade stand business last month.Variable costs for Jan's lemonade stand now include the cost of

Economies of scale occur when

Brady Industries has average variable costs of $1 and average total costs of $3 when it produces 500 units of output.The firm's total fixed costs equal

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