Question 1

Table 13-9
  
-Refer to Table 13-9.The average variable cost of producing 4 posters is

Accepted Answer

A)  $2.00. 
B)  $2.50. 
C)  $3.33. 
D)  $5.00. 
A)  $2.00. 
B)  $2.50. 
C)  $3.33. 
D)  $5.00.

Question 2

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

Accepted Answer

A)  $50 
B)  $140 
C)  $360 
D)  $410 
A)  $50 
B)  $140 
C)  $360 
D)  $410

Question 3

Scenario 13-12
If Farmer Brown plants no seeds on his farm, he gets no harvest. If he plants 1 bag of seeds, he gets 5 bushels of wheat. If he plants 2 bags, he gets 9 bushels. If he plants 3 bags, he gets 12 bushels. A bag of seeds costs $120, and seeds are his only cost.
-Refer to Scenario 13-12.Farmer Brown's total-cost curve is

Accepted Answer

A)  increasing at an increasing rate. 
B)  increasing at a decreasing rate. 
C)  increasing at a constant rate. 
D)  decreasing. 
A)  increasing at an increasing rate. 
B)  increasing at a decreasing rate. 
C)  increasing at a constant rate. 
D)  decreasing.

Question 4

Figure 13-5
  
-Refer to Figure 13-5.Curve C 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 5

The marginal product of labor can be defined as the change in

Accepted Answer

A)  profit divided by the change in labor. 
B)  output divided by the change in labor. 
C)  labor divided by the change in output. 
D)  labor divided by the change in total cost. 
A)  profit divided by the change in labor. 
B)  output divided by the change in labor. 
C)  labor divided by the change in output. 
D)  labor divided by the change in total cost.

Question 6

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 35 chairs per hour,what is the total labor cost per hour?

Accepted Answer

A)  $40 
B)  $48 
C)  $384 
D)  $424 
A)  $40 
B)  $48 
C)  $384 
D)  $424

Question 7

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 costs 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 8

Scenario 13-8
Ellie has been working for an engineering firm and earning an annual salary of $80,000. She decides to open her own engineering business. Her annual expenses will include $15,000 for office rent, $3,000 for equipment rental, $1,000 for supplies, $1,200 for utilities, and a $35,000 salary for a secretary/bookkeeper. Ellie will cover her start-up expenses by cashing in a $20,000 certificate of deposit on which she was earning annual interest of $500.
-Refer to Scenario 13-8.Ellie's annual economic costs will equal

Accepted Answer

A)  $55,200. 
B)  $75,200. 
C)  $80,500. 
D)  $135,700. 
A)  $55,200. 
B)  $75,200. 
C)  $80,500. 
D)  $135,700.

Question 9

Scenario 13-6
Tony is a wheat farmer, but he also spends part of his day teaching guitar lessons. Due to the popularity of his local country western band, Farmer Tony has more students requesting lessons than he has time for if he is to also maintain his farming business. Farmer Tony charges $25 an hour for his guitar lessons. One spring day, he spends 10 hours in his fields planting $130 worth of seeds on his farm. He expects that the seeds he planted will yield $300 worth of wheat.
-Refer to Scenario 13-6.Tony's accounting profit equals

Accepted Answer

A)  $-80. 
B)  $130. 
C)  $170. 
D)  $260. 
A)  $-80. 
B)  $130. 
C)  $170. 
D)  $260.

Question 10

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.What is the total daily cost of producing at a rate of 55 chairs per hour if the factory operates 8 hours per day?

Accepted Answer

A)  $480 
B)  $576 
C)  $520 
D)  $616 
A)  $480 
B)  $576 
C)  $520 
D)  $616

Question 11

Table 13-8
  
-Refer to Table 13-8.What is the average variable cost of producing 5 units of output?

Accepted Answer

A)  $4 
B)  $5 
C)  $40 
D)  $44 
A)  $4 
B)  $5 
C)  $40 
D)  $44

Question 12

For a firm,the production function represents the relationship between

Accepted Answer

A)  implicit costs and explicit costs. 
B)  quantity of inputs and total cost. 
C)  quantity of inputs and quantity of output. 
D)  quantity of output and total cost. 
A)  implicit costs and explicit costs. 
B)  quantity of inputs and total cost. 
C)  quantity of inputs and quantity of output. 
D)  quantity of output and total cost.

Question 13

Scenario 13-4
Suppose that Abdul opens a coffee shop. He receives a loan from a bank for $100,000. He withdraws $50,000 from his personal savings account. The interest rate on the loan is 8%, and the interest rate on his savings account is 2%.
-Refer to Scenario 13-4.Abdul's explicit cost of capital is

Accepted Answer

A)  $8,000. 
B)  $4,000. 
C)  $2,000. 
D)  $1,000. 
A)  $8,000. 
B)  $4,000. 
C)  $2,000. 
D)  $1,000.

Question 14

Let L represent the number of workers hired by a firm,and let Q represent that firm's quantity of output.Assume two points on the firm's production function are (L = 12,Q = 122)and (L = 13,Q = 132).Then the marginal product of the 13th worker is

Accepted Answer

A)  8 units of output. 
B)  10 units of output. 
C)  122 units of output. 
D)  132 units of output. 
A)  8 units of output. 
B)  10 units of output. 
C)  122 units of output. 
D)  132 units of output.

Question 15

The marginal cost curve crosses the average total cost curve at

Accepted Answer

A)  the efficient scale. 
B)  the minimum point on the average total cost curve. 
C)  a point where the marginal cost curve is rising. 
D)  All of the above are correct. 
A)  the efficient scale. 
B)  the minimum point on the average total cost curve. 
C)  a point where the marginal cost curve is rising. 
D)  All of the above are correct.

Question 16

The marginal product of an input in the production process is the increase in

Accepted Answer

A)  total revenue obtained from an additional unit of that input. 
B)  profit obtained from an additional unit of that input. 
C)  total revenue obtained from an additional unit of that input 
D)  quantity of output obtained from an additional unit of that input. 
A)  total revenue obtained from an additional unit of that input. 
B)  profit obtained from an additional unit of that input. 
C)  total revenue obtained from an additional unit of that input 
D)  quantity of output obtained from an additional unit of that input.

Question 17

Grace is a self-employed artist.She can make 20 pieces of pottery per week.She is considering hiring her sister Kate to work for her.Kate can make 18 pieces of pottery per week.What would be the total output of Grace's firm if she hired her sister?

Accepted Answer

A)  18 pieces of pottery 
B)  19 pieces of pottery 
C)  20 pieces of pottery 
D)  38 pieces of pottery 
A)  18 pieces of pottery 
B)  19 pieces of pottery 
C)  20 pieces of pottery 
D)  38 pieces of pottery

Question 18

The average fixed cost curve

Accepted Answer

A)  always declines with increased levels of output. 
B)  always rises with increased levels of output. 
C)  declines as long as it is above marginal cost. 
D)  declines as long as it is below marginal cost. 
A)  always declines with increased levels of output. 
B)  always rises with increased levels of output. 
C)  declines as long as it is above marginal cost. 
D)  declines as long as it is below marginal cost.

Question 19

Table 13-2
  
-Refer to Table 13-2.What is the marginal product of the second worker?

Accepted Answer

A)  250 units 
B)  200 units 
C)  150 units 
D)  50 units 
A)  250 units 
B)  200 units 
C)  150 units 
D)  50 units

Question 20

In the long run Firm A incurs total costs of $1,200 when output is 30 units and $1,600 when output is 40 units.Firm A exhibits

Accepted Answer

A)  diseconomies of scale because total cost is rising as output rises. 
B)  constant returns to scale because average total cost is constant as output rises. 
C)  diseconomies of scale because average total cost is rising as output rises. 
D)  economies of scale because average total cost is falling as output rises. 
A)  diseconomies of scale because total cost is rising as output rises. 
B)  constant returns to scale because average total cost is constant as output rises. 
C)  diseconomies of scale because average total cost is rising as output rises. 
D)  economies of scale because average total cost is falling as output rises.

Table 13-9 -Refer to Table 13-9.The average variable cost of producing 4 posters is

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

Figure 13-5 -Refer to Figure 13-5.Curve C represents which type of cost curve?

The marginal product of labor can be defined as the change in

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 35 chairs per hour,what is the total labor cost per hour?

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 costs are

Table 13-8 -Refer to Table 13-8.What is the average variable cost of producing 5 units of output?

For a firm,the production function represents the relationship between

Let L represent the number of workers hired by a firm,and let Q represent that firm's quantity of output.Assume two points on the firm's production function are (L = 12,Q = 122)and (L = 13,Q = 132).Then the marginal product of the 13th worker is

The marginal cost curve crosses the average total cost curve at

The marginal product of an input in the production process is the increase in

Grace is a self-employed artist.She can make 20 pieces of pottery per week.She is considering hiring her sister Kate to work for her.Kate can make 18 pieces of pottery per week.What would be the total output of Grace's firm if she hired her sister?

The average fixed cost curve

Table 13-2 -Refer to Table 13-2.What is the marginal product of the second worker?

In the long run Firm A incurs total costs of $1,200 when output is 30 units and $1,600 when output is 40 units.Firm A exhibits

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 13-9 -Refer to Table 13-9.The average variable cost of producing 4 posters is

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

Figure 13-5 -Refer to Figure 13-5.Curve C represents which type of cost curve?

The marginal product of labor can be defined as the change in

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 35 chairs per hour,what is the total labor cost per hour?

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 costs are

Table 13-8 -Refer to Table 13-8.What is the average variable cost of producing 5 units of output?

For a firm,the production function represents the relationship between

Let L represent the number of workers hired by a firm,and let Q represent that firm's quantity of output.Assume two points on the firm's production function are (L = 12,Q = 122)and (L = 13,Q = 132).Then the marginal product of the 13th worker is

The marginal cost curve crosses the average total cost curve at

The marginal product of an input in the production process is the increase in

Grace is a self-employed artist.She can make 20 pieces of pottery per week.She is considering hiring her sister Kate to work for her.Kate can make 18 pieces of pottery per week.What would be the total output of Grace's firm if she hired her sister?

The average fixed cost curve

Table 13-2 -Refer to Table 13-2.What is the marginal product of the second worker?

In the long run Firm A incurs total costs of $1,200 when output is 30 units and $1,600 when output is 40 units.Firm A exhibits

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