Question 1

The figure above shows some of a firm's cost curves.
-Based on the figure above,curve A is the firm's

Accepted Answer

A)  marginal cost curve. 
B)  total cost curve. 
C)  average total cost curve. 
D)  total variable cost curve. 
E)  total fixed cost curve. 
A)  marginal cost curve. 
B)  total cost curve. 
C)  average total cost curve. 
D)  total variable cost curve. 
E)  total fixed cost curve.

Question 2

Increasing marginal returns to labor

Accepted Answer

A)  occur when a particularly efficient worker is employed. 
B)  describe the portion of a total product curve where the marginal product is negative. 
C)  mean that two workers produce less than twice the output of one worker. 
D)  are the result of specialization and division of labor in the production process. 
E)  occur only when there are increasing marginal returns to capital. 
A)  occur when a particularly efficient worker is employed. 
B)  describe the portion of a total product curve where the marginal product is negative. 
C)  mean that two workers produce less than twice the output of one worker. 
D)  are the result of specialization and division of labor in the production process. 
E)  occur only when there are increasing marginal returns to capital.

Question 3

To produce 10 shirts,the total cost is $80; to produce 11 shirts,the total cost is $99.The marginal cost of the 11th shirt is equal to

Accepted Answer

A)  $8. 
B)  $9. 
C)  $80. 
D)  $99. 
E)  $19. 
A)  $8. 
B)  $9. 
C)  $80. 
D)  $99. 
E)  $19.

Question 4

Which of the following is true in the long run?

Accepted Answer

A)  Total cost equals fixed cost. 
B)  Total cost is constant. 
C)  All costs are variable. 
D)  Marginal cost equals zero. 
E)  None of the above is true in the long run. 
A)  Total cost equals fixed cost. 
B)  Total cost is constant. 
C)  All costs are variable. 
D)  Marginal cost equals zero. 
E)  None of the above is true in the long run.

Question 5

Diseconomies of scale is a result of

Accepted Answer

A)  mismanagement. 
B)  difficulties of coordinating and controlling a large enterprise. 
C)  specialization of labor, capital, and management. 
D)  technological progress. 
E)  larger fixed costs as the firm's production increases. 
A)  mismanagement. 
B)  difficulties of coordinating and controlling a large enterprise. 
C)  specialization of labor, capital, and management. 
D)  technological progress. 
E)  larger fixed costs as the firm's production increases.

Question 6

The production and cost information provided in the table above for Flaming Fernando's,a restaurant that sells Fiery Frijoles,is for the

Accepted Answer

A)  short run because there are no variable costs. 
B)  short run because there is a fixed cost. 
C)  long run because there are no variable costs. 
D)  long run because there are no fixed costs. 
E)  short run and long run because the total cost increases as production increases. 
A)  short run because there are no variable costs. 
B)  short run because there is a fixed cost. 
C)  long run because there are no variable costs. 
D)  long run because there are no fixed costs. 
E)  short run and long run because the total cost increases as production increases.

Question 7

The average product curve

Accepted Answer

A)  initially falls then rises. 
B)  rises as average variable cost increases. 
C)  initially rises and then falls. 
D)  shows how productivity changes as output changes. 
E)  intersects the marginal cost curve when the average product curve is at its maximum. 
A)  initially falls then rises. 
B)  rises as average variable cost increases. 
C)  initially rises and then falls. 
D)  shows how productivity changes as output changes. 
E)  intersects the marginal cost curve when the average product curve is at its maximum.

Question 8

The vertical distance between total cost curve and total variable cost curve is equal to

Accepted Answer

A)  average fixed cost. 
B)  total fixed cost. 
C)  average variable cost. 
D)  average total cost. 
E)  marginal cost. 
A)  average fixed cost. 
B)  total fixed cost. 
C)  average variable cost. 
D)  average total cost. 
E)  marginal cost.

Question 9

When an economist uses the term "cost" referring to a firm,the economist refers to the

Accepted Answer

A)  price of the good to the consumer. 
B)  explicit cost of producing a good or service but not the implicit cost of producing a good or service. 
C)  implicit cost of producing a good or service but not the explicit cost of producing a good or service. 
D)  opportunity cost of producing a good or service, which includes both implicit and explicit cost. 
E)  cost that can be actually verified and measured. 
A)  price of the good to the consumer. 
B)  explicit cost of producing a good or service but not the implicit cost of producing a good or service. 
C)  implicit cost of producing a good or service but not the explicit cost of producing a good or service. 
D)  opportunity cost of producing a good or service, which includes both implicit and explicit cost. 
E)  cost that can be actually verified and measured.

Question 10

Acme produces rocket shoes for use by slow coyotes.Acme's total cost schedule is given in the table below.Acme's total fixed cost is $12.Complete the table.(In the table,TFC is the total fixed cost,TVC is the total variable cost,AFC is the average fixed cost,AVC is the average variable cost,and ATC is the average total cost.)

Accepted Answer

@#IMG-DLM& The compl

Question 11

$$\begin{array} { | c | c | c | c | c | } 
\hline \begin{array} { c } 
\text { Labor } \
\text { (workers) }
\end{array} & \text { Output (bikes) } & \begin{array} { c } 
\text { Total fixed } \
\text { costs (dollars) }
\end{array} & \begin{array} { c } 
\text { Total variable } \
\text { cost (dollars) }
\end{array} & \begin{array} { c } 
\text { Total cost } \
\text { (dollars) }
\end{array} \
\hline 0 & 0 & 200 & & \
\hline 1 & 20 & & 100 & \
\hline 2 & 50 & & & \
\hline 3 & 60 & & & \
\hline 4 & 64 & & & \
\hline
\end{array}$$
-The table above gives costs at Jan's Bike Shop.Unfortunately,Jan's record keeping has been spotty.Each worker is paid $100 a day.Labor costs are the only variable costs of production.What is the total variable cost of producing 60 bikes?

Accepted Answer

A)  $200 
B)  $300 
C)  $400 
D)  $500 
E)  None of the above answers are correct. 
A)  $200 
B)  $300 
C)  $400 
D)  $500 
E)  None of the above answers are correct.

Question 12

When the long-run average cost curve is downward sloping,

Accepted Answer

A)  economies of scale are present. 
B)  diseconomies of scale are present. 
C)  the firm experiences constant returns to scale. 
D)  the average fixed cost curve must be upward sloping. 
E)  The premise of the question is wrong because long-run average cost curves never slope downward. 
A)  economies of scale are present. 
B)  diseconomies of scale are present. 
C)  the firm experiences constant returns to scale. 
D)  the average fixed cost curve must be upward sloping. 
E)  The premise of the question is wrong because long-run average cost curves never slope downward.

Question 13

The figure above shows some of a firm's cost curves.
-Based on the figure above,curve C is the firm's

Accepted Answer

A)  marginal cost curve. 
B)  total cost curve. 
C)  average total cost curve. 
D)  total variable cost curve. 
E)  total fixed cost curve. 
A)  marginal cost curve. 
B)  total cost curve. 
C)  average total cost curve. 
D)  total variable cost curve. 
E)  total fixed cost curve.

Question 14

If marginal cost increases when output increases,then

Accepted Answer

A)  marginal product must decrease when output increases. 
B)  average fixed cost is constant. 
C)  total cost is constant. 
D)  average variable cost must increase when output increases. 
E)  average total cost must decrease when output increases. 
A)  marginal product must decrease when output increases. 
B)  average fixed cost is constant. 
C)  total cost is constant. 
D)  average variable cost must increase when output increases. 
E)  average total cost must decrease when output increases.

Question 15

The marginal cost curve intersects the ________ curves at their ________ points.

Accepted Answer

A)  average total cost and average fixed cost; minimum 
B)  average product and marginal product; maximum 
C)  average variable cost and total variable cost; maximum 
D)  average total cost and average variable cost; minimum 
E)  average product and marginal product; minimum 
A)  average total cost and average fixed cost; minimum 
B)  average product and marginal product; maximum 
C)  average variable cost and total variable cost; maximum 
D)  average total cost and average variable cost; minimum 
E)  average product and marginal product; minimum

Question 16

$$\begin{array} { c c } 
\begin{array} { c } 
\text { Quantity of labor } \
\text { (workers) }
\end{array} & \begin{array} { c } 
\text { Total product } \
\text { (lawns mowed per hour) }
\end{array} \
\hline 0 & 0 \
1 & 2 \
2 & 5 \
3 & 8 \
4 & 15 \
5 & 22 \
6 & 26 \
7 & 28
\end{array}$$
-The table above shows the total product schedule for Rick's Lawn Service,a yard care company.When the 4th worker is hired,the ________ product of labor equals ________ lawns mowed.

Accepted Answer

A)  average; 60 
B)  average; 3.75 
C)  marginal; 3.75 
D)  marginal; 0 
E)  marginal; 15 
A)  average; 60 
B)  average; 3.75 
C)  marginal; 3.75 
D)  marginal; 0 
E)  marginal; 15

Question 17

In the long run,the firm ________ change the number of workers it employs and ________ change the size of its plant.

Accepted Answer

A)  can; can 
B)  can; cannot 
C)  cannot; can 
D)  cannot; cannot 
E)  In order to answer the question, more information is needed about how long the long run is. 
A)  can; can 
B)  can; cannot 
C)  cannot; can 
D)  cannot; cannot 
E)  In order to answer the question, more information is needed about how long the long run is.

Question 18

The short run is

Accepted Answer

A)  less than one year. 
B)  the time frame in which all resources are fixed. 
C)  the time frame in which some resources are fixed. 
D)  the time frame in which output is fixed. 
E)  a time frame short enough so that some costs are explicit costs. 
A)  less than one year. 
B)  the time frame in which all resources are fixed. 
C)  the time frame in which some resources are fixed. 
D)  the time frame in which output is fixed. 
E)  a time frame short enough so that some costs are explicit costs.

Question 19

Jake opens a pig farm in Idaho.To start his farm,he uses his entire $50,000 of savings from his savings account.The bank was paying him $2,500 interest on his saving.Explain why the $2,500 is one of Jake's costs.

Accepted Answer

When Jake provides the $50,000 to financ

Question 20

Jennifer owns a pig farm near Salina,Kansas.Last year she earned $39,000 in total revenue while incurring $38,000 in explicit costs.She could have earned $27,000 as a teacher in Salina.These are all her revenue and costs.Therefore Jennifer earned an

Accepted Answer

A)  accounting profit of $1,000 but incurred an economic loss of $26,000. 
B)  accounting profit of $1,000 but incurred an economic loss of $65,000. 
C)  accounting profit of $1,000 but incurred an economic loss of $38,000. 
D)  economic profit of $1,000. 
E)  None of the above answers is correct. 
A)  accounting profit of $1,000 but incurred an economic loss of $26,000. 
B)  accounting profit of $1,000 but incurred an economic loss of $65,000. 
C)  accounting profit of $1,000 but incurred an economic loss of $38,000. 
D)  economic profit of $1,000. 
E)  None of the above answers is correct.

The figure above shows some of a firm's cost curves. -Based on the figure above,curve A is the firm's

Increasing marginal returns to labor

To produce 10 shirts,the total cost is $80; to produce 11 shirts,the total cost is $99.The marginal cost of the 11th shirt is equal to

Which of the following is true in the long run?

Diseconomies of scale is a result of

The production and cost information provided in the table above for Flaming Fernando's,a restaurant that sells Fiery Frijoles,is for the

The average product curve

The vertical distance between total cost curve and total variable cost curve is equal to

When an economist uses the term "cost" referring to a firm,the economist refers to the

When the long-run average cost curve is downward sloping,

The figure above shows some of a firm's cost curves. -Based on the figure above,curve C is the firm's

If marginal cost increases when output increases,then

The marginal cost curve intersects the curves at their points.

Quantity of labor (workers) Total product (lawns mowed per hour) 0 0 1 2 2 5 3 8 4 15 5 22 6 26 7 28 -The table above shows the total product schedule for Rick's Lawn Service,a yard care company.When the 4th worker is hired,the product of labor equals lawns mowed.

In the long run,the firm change the number of workers it employs and change the size of its plant.

The short run is

Jake opens a pig farm in Idaho.To start his farm,he uses his entire $50,000 of savings from his savings account.The bank was paying him $2,500 interest on his saving.Explain why the $2,500 is one of Jake's costs.

Jennifer owns a pig farm near Salina,Kansas.Last year she earned $39,000 in total revenue while incurring $38,000 in explicit costs.She could have earned $27,000 as a teacher in Salina.These are all her revenue and costs.Therefore Jennifer earned an

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 14: Production and Cost

The figure above shows some of a firm's cost curves. -Based on the figure above,curve A is the firm's

Increasing marginal returns to labor

To produce 10 shirts,the total cost is $80; to produce 11 shirts,the total cost is $99.The marginal cost of the 11th shirt is equal to

Which of the following is true in the long run?

Diseconomies of scale is a result of

The production and cost information provided in the table above for Flaming Fernando's,a restaurant that sells Fiery Frijoles,is for the

The average product curve

The vertical distance between total cost curve and total variable cost curve is equal to

When an economist uses the term "cost" referring to a firm,the economist refers to the

When the long-run average cost curve is downward sloping,

The figure above shows some of a firm's cost curves. -Based on the figure above,curve C is the firm's

If marginal cost increases when output increases,then

The marginal cost curve intersects the ________ curves at their ________ points.

Quantity of labor (workers) Total product (lawns mowed per hour) 0 0 1 2 2 5 3 8 4 15 5 22 6 26 7 28 -The table above shows the total product schedule for Rick's Lawn Service,a yard care company.When the 4th worker is hired,the ________ product of labor equals ________ lawns mowed.

In the long run,the firm ________ change the number of workers it employs and ________ change the size of its plant.

The short run is

Jake opens a pig farm in Idaho.To start his farm,he uses his entire $50,000 of savings from his savings account.The bank was paying him $2,500 interest on his saving.Explain why the $2,500 is one of Jake's costs.

Jennifer owns a pig farm near Salina,Kansas.Last year she earned $39,000 in total revenue while incurring $38,000 in explicit costs.She could have earned $27,000 as a teacher in Salina.These are all her revenue and costs.Therefore Jennifer earned an

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

The marginal cost curve intersects the curves at their points.

Quantity of labor (workers) Total product (lawns mowed per hour) 0 0 1 2 2 5 3 8 4 15 5 22 6 26 7 28 -The table above shows the total product schedule for Rick's Lawn Service,a yard care company.When the 4th worker is hired,the product of labor equals lawns mowed.

In the long run,the firm change the number of workers it employs and change the size of its plant.