Question 1

Use the table Workers and Buns Produced. What is the marginal product of the eighth worker?
​

Accepted Answer

A)  215 
B)  205 
C)  -5 
D)  5 
A)  215 
B)  205 
C)  -5 
D)  5 C

Question 2

How is accounting profit calculated?

Accepted Answer

A)  Accounting profit = Total revenue - Total explicit costs 
B)  Accounting profit = Total revenue - Total implicit costs 
C)  Accounting profit = Total revenue - Average costs 
D)  Accounting profit = Total revenue - (Total explicit costs + Total implicit costs) 
A)  Accounting profit = Total revenue - Total explicit costs 
B)  Accounting profit = Total revenue - Total implicit costs 
C)  Accounting profit = Total revenue - Average costs 
D)  Accounting profit = Total revenue - (Total explicit costs + Total implicit costs) A

Question 3

Jason's carpentry business has a fixed cost of $5,000 from equipment and tool rental and a variable cost of $40,000 when he builds 100 bookshelves per year. The total cost of producing 100 bookshelves is:

Accepted Answer

A)  $5,000. 
B)  $45,000. 
C)  $4,500. 
D)  $35,000. 
A)  $5,000. 
B)  $45,000. 
C)  $4,500. 
D)  $35,000. B

Question 4

Use the table Workers and Croissants Produced. Which of the following statements is true?

Accepted Answer

A)  The marginal product of the third worker is negative. 
B)  The total product of the second worker is negative. 
C)  The marginal product of the second worker is less than the marginal product of the first worker. 
D)  The marginal product of the third worker is less than the marginal product of the second worker. 
A)  The marginal product of the third worker is negative. 
B)  The total product of the second worker is negative. 
C)  The marginal product of the second worker is less than the marginal product of the first worker. 
D)  The marginal product of the third worker is less than the marginal product of the second worker.

Question 5

Jennifer's fixed cost of providing consulting services to clients is $1,000 per month. Her variable cost of consulting 10 clients is $2,000. What is Jennifer's average total cost of consulting 10 clients?

Accepted Answer

A)  $3,000 
B)  $1,000 
C)  $300 
D)  $500 
A)  $3,000 
B)  $1,000 
C)  $300 
D)  $500

Question 6

When costs grow more than in proportion to output, then a firm is experiencing:

Accepted Answer

A)  minimum efficient scale. 
B)  minimum social output. 
C)  economies of scale. 
D)  diseconomies of scale. 
A)  minimum efficient scale. 
B)  minimum social output. 
C)  economies of scale. 
D)  diseconomies of scale.

Question 7

During the back-to-school shopping season, a large store hires extra workers to work the 20 cash registers in the store. What are the fixed inputs in this situation?

Accepted Answer

A)  workers 
B)  the store 
C)  workers and cash registers 
D)  neither workers nor cash registers 
A)  workers 
B)  the store 
C)  workers and cash registers 
D)  neither workers nor cash registers

Question 8

Pamela wants to open a swim school. She estimates that her annual costs of renting a building with a pool are $100,000 and the cost of labor (other than her own) is $50,000, but she will have no other costs. She earns $35,000 at her current job. She estimates that her annual revenue from the swim school will be $160,000.
A. Calculate her accounting profit.
B. Calculate her economic profit.
C. If her goal is to make as much money as possible, should she open the swim school? Explain.

Accepted Answer

For part A, her accounting profit is thi

Question 9

Last year, the city of Madtucky spent $1 million to study how a new resort and casino would bring new economic development and tourist dollars to town. The cost of new construction of the resort and casino is expected to be $7 million, and the project will bring $8 million in tourist dollars to the city. Suppose that halfway through the construction of the resort, paleontologists discover dinosaur bones at the site, and $500,000 of unexpected expense must be paid to remove the bones safely. Should the city continue building the resort and casino or abandon the project? Explain.

Accepted Answer

The city should continue building the re

Question 10

Which of the following statements about profit is NOT true?

Accepted Answer

A)  Economic profit is always smaller than accounting profit. 
B)  Opportunity costs are the same as implicit costs. 
C)  All costs and benefits should be factored when making a decision. 
D)  A decision might still be rational if the benefit of that decision outweighs economic losses. 
A)  Economic profit is always smaller than accounting profit. 
B)  Opportunity costs are the same as implicit costs. 
C)  All costs and benefits should be factored when making a decision. 
D)  A decision might still be rational if the benefit of that decision outweighs economic losses.

Question 11

Magma Motor Company is producing at minimum efficient scale when it produces 2,000 cars per month. What happens if it increases output to 2,100 per month?

Accepted Answer

A)  Long-run average total cost decreases. 
B)  There is no change in long-run average total cost. 
C)  Marginal cost falls to zero. 
D)  The average total cost in the long run increases. 
A)  Long-run average total cost decreases. 
B)  There is no change in long-run average total cost. 
C)  Marginal cost falls to zero. 
D)  The average total cost in the long run increases.

Question 12

The city of Montrose cannot hire any more workers, but it can buy new garbage trucks. If it buys one more garbage truck it can serve 100 more households each day. What do the 100 additional households represent?

Accepted Answer

A)  the marginal product of capital 
B)  the marginal product of labor 
C)  the average product of natural resources 
D)  the production function 
A)  the marginal product of capital 
B)  the marginal product of labor 
C)  the average product of natural resources 
D)  the production function

Question 13

What is the difference between a fixed input and a variable input?

Accepted Answer

Fixed inputs cannot be changed

Question 14

Use the table The Cost of Swing Sets. Eleanor's costs of producing swing sets are given in this table, but the labels for several columns are missing. What column represents Eleanor's variable cost?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
A)  A 
B)  B 
C)  C 
D)  D

Question 15

Variable inputs are often _____, and fixed inputs are often:

Accepted Answer

A)  capital; labor. 
B)  capital; natural resources. 
C)  labor; capital. 
D)  labor; money. 
A)  capital; labor. 
B)  capital; natural resources. 
C)  labor; capital. 
D)  labor; money.

Question 16

The change in production when one more piece of equipment is added, holding labor constant, is the:

Accepted Answer

A)  total product of labor. 
B)  total product of capital. 
C)  marginal product of labor. 
D)  marginal product of capital. 
A)  total product of labor. 
B)  total product of capital. 
C)  marginal product of labor. 
D)  marginal product of capital.

Question 17

The total cost curve:

Accepted Answer

A)  at first decreases and then increases. 
B)  is always below the fixed cost curve. 
C)  has a height of the variable cost plus the fixed cost. 
D)  is the difference between marginal cost and profit. 
A)  at first decreases and then increases. 
B)  is always below the fixed cost curve. 
C)  has a height of the variable cost plus the fixed cost. 
D)  is the difference between marginal cost and profit.

Question 18

If Mackenzie owns the equipment that she uses to bake pies, then her:

Accepted Answer

A)  wage rate is zero. 
B)  rental rate is zero. 
C)  rental rate is what she could earn renting the equipment to someone else. 
D)  rental rate is what she could earn if she replaced all of her workers with equipment. 
A)  wage rate is zero. 
B)  rental rate is zero. 
C)  rental rate is what she could earn renting the equipment to someone else. 
D)  rental rate is what she could earn if she replaced all of her workers with equipment.

Question 19

Henrietta's fixed cost of catering meals is $1,000. She spends $14,000 on the cost of food to make meals and labor when she caters 100 meals. What is her average total cost of catering 100 meals?

Accepted Answer

A)  $15 
B)  $14 
C)  $140 
D)  $150 
A)  $15 
B)  $14 
C)  $140 
D)  $150

Question 20

What costs involve an actual payment of money?

Accepted Answer

A)  marginal costs 
B)  opportunity costs 
C)  explicit costs 
D)  implicit costs 
A)  marginal costs 
B)  opportunity costs 
C)  explicit costs 
D)  implicit costs

Use the table Workers and Buns Produced. What is the marginal product of the eighth worker?

How is accounting profit calculated?

Jason's carpentry business has a fixed cost of $5,000 from equipment and tool rental and a variable cost of $40,000 when he builds 100 bookshelves per year. The total cost of producing 100 bookshelves is:

Use the table Workers and Croissants Produced. Which of the following statements is true?

Jennifer's fixed cost of providing consulting services to clients is $1,000 per month. Her variable cost of consulting 10 clients is $2,000. What is Jennifer's average total cost of consulting 10 clients?

When costs grow more than in proportion to output, then a firm is experiencing:

During the back-to-school shopping season, a large store hires extra workers to work the 20 cash registers in the store. What are the fixed inputs in this situation?

Which of the following statements about profit is NOT true?

Magma Motor Company is producing at minimum efficient scale when it produces 2,000 cars per month. What happens if it increases output to 2,100 per month?

The city of Montrose cannot hire any more workers, but it can buy new garbage trucks. If it buys one more garbage truck it can serve 100 more households each day. What do the 100 additional households represent?

What is the difference between a fixed input and a variable input?

Use the table The Cost of Swing Sets. Eleanor's costs of producing swing sets are given in this table, but the labels for several columns are missing. What column represents Eleanor's variable cost?

Variable inputs are often _____, and fixed inputs are often:

The change in production when one more piece of equipment is added, holding labor constant, is the:

The total cost curve:

If Mackenzie owns the equipment that she uses to bake pies, then her:

Henrietta's fixed cost of catering meals is $1,000. She spends $14,000 on the cost of food to make meals and labor when she caters 100 meals. What is her average total cost of catering 100 meals?

What costs involve an actual payment of money?

Foundations of Economics

Extension: Understanding Graphs

Markets and Economies

Demand

Supply

Market Equilibrium

Elasticity

Consumer Behavior

Perfect Competition

Market Power

Factor Markets

Market Failure and Government Failure

Measuring an Economys Performance

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money and Banking

Monetary Policy

Economic Growth and Development

International Trade and Finance

Filters

Exam 8: Production Costs

Use the table Workers and Buns Produced. What is the marginal product of the eighth worker? ​

How is accounting profit calculated?

Jason's carpentry business has a fixed cost of $5,000 from equipment and tool rental and a variable cost of $40,000 when he builds 100 bookshelves per year. The total cost of producing 100 bookshelves is:

Use the table Workers and Croissants Produced. Which of the following statements is true?

Jennifer's fixed cost of providing consulting services to clients is $1,000 per month. Her variable cost of consulting 10 clients is $2,000. What is Jennifer's average total cost of consulting 10 clients?

When costs grow more than in proportion to output, then a firm is experiencing:

During the back-to-school shopping season, a large store hires extra workers to work the 20 cash registers in the store. What are the fixed inputs in this situation?

Which of the following statements about profit is NOT true?

Magma Motor Company is producing at minimum efficient scale when it produces 2,000 cars per month. What happens if it increases output to 2,100 per month?

The city of Montrose cannot hire any more workers, but it can buy new garbage trucks. If it buys one more garbage truck it can serve 100 more households each day. What do the 100 additional households represent?

What is the difference between a fixed input and a variable input?

Use the table The Cost of Swing Sets. Eleanor's costs of producing swing sets are given in this table, but the labels for several columns are missing. What column represents Eleanor's variable cost?

Variable inputs are often _____, and fixed inputs are often:

The change in production when one more piece of equipment is added, holding labor constant, is the:

The total cost curve:

If Mackenzie owns the equipment that she uses to bake pies, then her:

Henrietta's fixed cost of catering meals is $1,000. She spends $14,000 on the cost of food to make meals and labor when she caters 100 meals. What is her average total cost of catering 100 meals?

What costs involve an actual payment of money?

Foundations of Economics

Extension: Understanding Graphs

Markets and Economies

Demand

Supply

Market Equilibrium

Elasticity

Consumer Behavior

Perfect Competition

Market Power

Factor Markets

Market Failure and Government Failure

Measuring an Economys Performance

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money and Banking

Monetary Policy

Economic Growth and Development

International Trade and Finance

Filters

Use the table Workers and Buns Produced. What is the marginal product of the eighth worker?