Question 1

Exhibit 6-15  Long-run average cost   In Exhibit 6-15, economies of scale exist up to:

Accepted Answer

A)  500 units of output per week. 
B)  1,000 units of output per week. 
C)  1,500 units of output. 
D)  2,000 units of output. 
A)  500 units of output per week. 
B)  1,000 units of output per week. 
C)  1,500 units of output. 
D)  2,000 units of output.

Question 2

The marginal cost is the:

Accepted Answer

A)  b and c. 
B)  change in total cost as the quantity changes by one unit. 
C)  change in total variable cost as the quantity changes by one unit. 
D)  change in total fixed cost as the quantity changes by one unit. 
E)  same as the fixed cost when average fixed cost is at a minimum. 
A)  b and c. 
B)  change in total cost as the quantity changes by one unit. 
C)  change in total variable cost as the quantity changes by one unit. 
D)  change in total fixed cost as the quantity changes by one unit. 
E)  same as the fixed cost when average fixed cost is at a minimum.

Question 3

The decreasing portion of a firm's long run average cost curve is attributable to:

Accepted Answer

A)  diminishing returns to scale. 
B)  increasing marginal cost. 
C)  economies of scale. 
D)  diseconomies of scale. 
E)  constant returns to scale. 
A)  diminishing returns to scale. 
B)  increasing marginal cost. 
C)  economies of scale. 
D)  diseconomies of scale. 
E)  constant returns to scale.

Question 4

​ The law of diminishing marginal returns implies increasing marginal cost.

Accepted Answer

A) True 
 B)False

Question 5

Exhibit 6-9  Cost schedule for firm X   As shown in Exhibit 6-9, the marginal cost of producing the third unit is:

Accepted Answer

A)  $50. 
B)  $16. 
C)  $24. 
D)  $23. 
A)  $50. 
B)  $16. 
C)  $24. 
D)  $23.

Question 6

When a total output curve is falling, its corresponding marginal product curve is:

Accepted Answer

A)  vertical. 
B)  horizontal. 
C)  rising. 
D)  falling. 
A)  vertical. 
B)  horizontal. 
C)  rising. 
D)  falling.

Question 7

When the curve that envelops the series of possible short-run average total cost curves is horizontal, this means that there are:

Accepted Answer

A)  economies of scale. 
B)  diseconomies of scale. 
C)  constant returns to scale. 
D)  diminishing returns. 
E)  some fixed factors of production. 
A)  economies of scale. 
B)  diseconomies of scale. 
C)  constant returns to scale. 
D)  diminishing returns. 
E)  some fixed factors of production.

Question 8

Which statement about the total variable cost curve is true ?

Accepted Answer

A)  It begins at the origin and increases before decreasing again. 
B)  The total variable cost curve is the same at all levels of output. 
C)  The total variable cost curve is increasing but at a decreasing rate. 
D)  It begins at the origin and is always increasing. 
E)  There is no such thing as a total variable cost curve. 
A)  It begins at the origin and increases before decreasing again. 
B)  The total variable cost curve is the same at all levels of output. 
C)  The total variable cost curve is increasing but at a decreasing rate. 
D)  It begins at the origin and is always increasing. 
E)  There is no such thing as a total variable cost curve.

Question 9

Exhibit 6-13  Cost curves   In Exhibit 6-13, AFC is shown by the graph labeled:

Accepted Answer

A)  I. 
B)  II. 
C)  III. 
D)  IV. 
E)  V. 
A)  I. 
B)  II. 
C)  III. 
D)  IV. 
E)  V.

Question 10

Which of the following best describes marginal cost?

Accepted Answer

A)  The change in total cost when one additional unit of output is produced. 
B)  Total cost divided by the quantity of output produced. 
C)  Total variable cost divided by the quantity of output produced. 
D)  Total fixed cost divided by the quantity of output produced. 
E)  Costs that do not vary as output varies, and that must be paid even if output is zero. 
A)  The change in total cost when one additional unit of output is produced. 
B)  Total cost divided by the quantity of output produced. 
C)  Total variable cost divided by the quantity of output produced. 
D)  Total fixed cost divided by the quantity of output produced. 
E)  Costs that do not vary as output varies, and that must be paid even if output is zero.

Question 11

Barbara owns a small shop where dresses are made. At the end of a given month, she has 250 dresses. Her expenses for the month are $1,000 for rent, $6,000 for wages, $1,500 for fabric and thread, and $500 for electricity. Her total variable costs for the month are:

Accepted Answer

A)  c and e. 
B)  $4,000. 
C)  $32 per dress. 
D)  $7,500. 
E)  $8,000. 
A)  c and e. 
B)  $4,000. 
C)  $32 per dress. 
D)  $7,500. 
E)  $8,000.

Question 12

What is the shape of the average total cost curve for a firm in the short run?

Accepted Answer

A)  U-shaped. 
B)  A horizontal line. 
C)  A vertical line. 
D)  A curve that slopes upward to the right. 
A)  U-shaped. 
B)  A horizontal line. 
C)  A vertical line. 
D)  A curve that slopes upward to the right.

Question 13

Exhibit 6-9  Cost schedule for firm X   As shown in Exhibit 6-9, the total cost of producing 5 units is:

Accepted Answer

A)  zero. 
B)  $227. 
C)  $250. 
D)  $100. 
A)  zero. 
B)  $227. 
C)  $250. 
D)  $100.

Question 14

Diseconomies of scale cause the short-run marginal cost curve to slope upwards.

Accepted Answer

A) True 
 B)False

Exhibit 6-15 Long-run average cost In Exhibit 6-15, economies of scale exist up to:

The marginal cost is the:

The decreasing portion of a firm's long run average cost curve is attributable to:

The law of diminishing marginal returns implies increasing marginal cost.

Exhibit 6-9 Cost schedule for firm X As shown in Exhibit 6-9, the marginal cost of producing the third unit is:

When a total output curve is falling, its corresponding marginal product curve is:

When the curve that envelops the series of possible short-run average total cost curves is horizontal, this means that there are:

Which statement about the total variable cost curve is true ?

Exhibit 6-13 Cost curves In Exhibit 6-13, AFC is shown by the graph labeled:

Which of the following best describes marginal cost?

Barbara owns a small shop where dresses are made. At the end of a given month, she has 250 dresses. Her expenses for the month are $1,000 for rent, $6,000 for wages, $1,500 for fabric and thread, and $500 for electricity. Her total variable costs for the month are:

What is the shape of the average total cost curve for a firm in the short run?

Exhibit 6-9 Cost schedule for firm X As shown in Exhibit 6-9, the total cost of producing 5 units is:

Diseconomies of scale cause the short-run marginal cost curve to slope upwards.

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets and Income Distribution

Gross Domestic Product

Business Cycles and Unemployment

Inflation

Aggregate Demand and Supply

Fiscal Policy

The Public Sector

Federal Deficits, Surpluses, and the National Debt

Money and the Federal Reserve System

Money Creation

Policy Disputes Using the Self-Correcting Aggregate Demand and Supply Model

International Trade and Finance

Economies in Transition

Growth and the Less-Developed Countries

Filters

Exam 6: Production Costs

Exhibit 6-15 Long-run average cost In Exhibit 6-15, economies of scale exist up to:

The marginal cost is the:

The decreasing portion of a firm's long run average cost curve is attributable to:

​ The law of diminishing marginal returns implies increasing marginal cost.

Exhibit 6-9 Cost schedule for firm X As shown in Exhibit 6-9, the marginal cost of producing the third unit is:

When a total output curve is falling, its corresponding marginal product curve is:

When the curve that envelops the series of possible short-run average total cost curves is horizontal, this means that there are:

Which statement about the total variable cost curve is true ?

Exhibit 6-13 Cost curves In Exhibit 6-13, AFC is shown by the graph labeled:

Which of the following best describes marginal cost?

Barbara owns a small shop where dresses are made. At the end of a given month, she has 250 dresses. Her expenses for the month are $1,000 for rent, $6,000 for wages, $1,500 for fabric and thread, and $500 for electricity. Her total variable costs for the month are:

What is the shape of the average total cost curve for a firm in the short run?

Exhibit 6-9 Cost schedule for firm X As shown in Exhibit 6-9, the total cost of producing 5 units is:

Diseconomies of scale cause the short-run marginal cost curve to slope upwards.

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets and Income Distribution

Gross Domestic Product

Business Cycles and Unemployment

Inflation

Aggregate Demand and Supply

Fiscal Policy

The Public Sector

Federal Deficits, Surpluses, and the National Debt

Money and the Federal Reserve System

Money Creation

Policy Disputes Using the Self-Correcting Aggregate Demand and Supply Model

International Trade and Finance

Economies in Transition

Growth and the Less-Developed Countries

Filters

The law of diminishing marginal returns implies increasing marginal cost.