Question 1

Average total cost reaches a minimum at a lower level of output than average variable cost.

Accepted Answer

A) True 
 B)False

Question 2

The short run is a period in which the quantity of at least one input is fixed and the quantities of the other inputs can be varied.

Accepted Answer

A) True 
 B)False

Question 3

Toyota has become known for its concept of

Accepted Answer

A)  using specialized parts for each model 
B)  lean manufacturing 
C)  mass production of identical vehicles 
D)  introducing new models slowly 
A)  using specialized parts for each model 
B)  lean manufacturing 
C)  mass production of identical vehicles 
D)  introducing new models slowly

Question 4

In an attempt to keep costs low, McDonald's is taking steps to

Accepted Answer

A)  achieve constant returns to scale 
B)  place detailed instructions on each cash register 
C)  develop a standardized menu across the country 
D)  reduce manager training time at Hamburger University 
A)  achieve constant returns to scale 
B)  place detailed instructions on each cash register 
C)  develop a standardized menu across the country 
D)  reduce manager training time at Hamburger University

Question 5

In the ______, a firm can vary its plant size and does not view any cost as fixed.

Accepted Answer

A)  short run 
B)  long run 
C)  intermediate run 
D)  market period 
A)  short run 
B)  long run 
C)  intermediate run 
D)  market period

Question 6

The total costs of a firm consist of

Accepted Answer

A)  implicit costs only 
B)  explicit costs only 
C)  implicit costs plus explicit costs 
D)  implicit costs plus economic profit 
A)  implicit costs only 
B)  explicit costs only 
C)  implicit costs plus explicit costs 
D)  implicit costs plus economic profit

Question 7

If a firm's owner finds that the firm's total revenue is exactly equal to the sum of its explicit and implicit costs, the owner

Accepted Answer

A)  should close the business right away and find another line of work 
B)  is doing as well in this business as she could in her next-best another line of work 
C)  should downsize immediately to see if this helps 
D)  can continue to produce only if she has enough personal funds to keep the business going 
A)  should close the business right away and find another line of work 
B)  is doing as well in this business as she could in her next-best another line of work 
C)  should downsize immediately to see if this helps 
D)  can continue to produce only if she has enough personal funds to keep the business going

Question 8

When a firm realizes economies of scale, the short-run average total cost curve slopes downward.

Accepted Answer

A) True 
 B)False

Question 9

If Whitey's Baseball Bat Manufacturing realizes increasing marginal returns, its total product 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 10

A 10 percent increase in all inputs results in Burger King's output increasing by 9 percent. As a result, Burger King's cost per unit rises and the long-run average total cost curve is increasing.

Accepted Answer

A) True 
 B)False

Question 11

If the Minneapolis Cement Co. employs just one worker, that person has to perform all of the aspects of cement manufacturing. If the firm hires a second person, the two workers can specialize in different aspects of cement manufacturing and thus produce more than twice as much as one. When this occurs, the firm realizes

Accepted Answer

A)  economies of scale 
B)  diseconomies of scale 
C)  increasing marginal returns 
D)  diminishing marginal returns 
A)  economies of scale 
B)  diseconomies of scale 
C)  increasing marginal returns 
D)  diminishing marginal returns

Question 12

Tires are considered to be a fixed cost of driving an automobile.

Accepted Answer

A) True 
 B)False

Question 13

The declining portion of Wal-Mart's long-run average total cost curve is explained by

Accepted Answer

A)  the law of diminishing returns 
B)  constant returns to scale 
C)  economies of scale 
D)  diseconomies of scale 
A)  the law of diminishing returns 
B)  constant returns to scale 
C)  economies of scale 
D)  diseconomies of scale

Question 14

Figure 4.2 Short-Run Cost Curves
  
-Refer to Figure 4.2. Even if this firm produces zero units of output, it will still

Accepted Answer

A)  have no fixed costs 
B)  make a profit 
C)  be producing other products 
D)  have fixed costs 
A)  have no fixed costs 
B)  make a profit 
C)  be producing other products 
D)  have fixed costs

Question 15

ATM's located at banks, service stations, and stores are a good example of

Accepted Answer

A)  economies of scale 
B)  constant returns to scale 
C)  increasing marginal returns 
D)  fixed inputs 
A)  economies of scale 
B)  constant returns to scale 
C)  increasing marginal returns 
D)  fixed inputs

Question 16

A production function specifies the minimum amount of output that we can produce with a given amount of resources.

Accepted Answer

A) True 
 B)False

Question 17

A long-run adjustment is best represented by

Accepted Answer

A)  a carrot farmer using an extra dose of pesticide to kill insects 
B)  the owner of a Pizza Hut franchise hiring an extra cook 
C)  General Electric reducing its employment of electrical engineers 
D)  Ford building a new plant to assemble automobiles 
A)  a carrot farmer using an extra dose of pesticide to kill insects 
B)  the owner of a Pizza Hut franchise hiring an extra cook 
C)  General Electric reducing its employment of electrical engineers 
D)  Ford building a new plant to assemble automobiles

Question 18

The accounting profit of a KFC franchise equals total revenue minus

Accepted Answer

A)  total cost 
B)  implicit cost 
C)  explicit cost 
D)  total fixed cost 
A)  total cost 
B)  implicit cost 
C)  explicit cost 
D)  total fixed cost

Question 19

An increased tax on each newpaper sold will

Accepted Answer

A)  cause newpaper firms to sell more newspapers 
B)  not have any effect on newspaper firms' cost curves 
C)  cause the newspaper firms' cost curves to shift upward 
D)  cause the newspaper firms' cost curves to shift downward 
A)  cause newpaper firms to sell more newspapers 
B)  not have any effect on newspaper firms' cost curves 
C)  cause the newspaper firms' cost curves to shift upward 
D)  cause the newspaper firms' cost curves to shift downward

Question 20

When marginal cost lies below average total cost, it pulls average total cost downward.

Accepted Answer

A) True 
 B)False

Average total cost reaches a minimum at a lower level of output than average variable cost.

The short run is a period in which the quantity of at least one input is fixed and the quantities of the other inputs can be varied.

Toyota has become known for its concept of

In an attempt to keep costs low, McDonald's is taking steps to

In the ______, a firm can vary its plant size and does not view any cost as fixed.

The total costs of a firm consist of

If a firm's owner finds that the firm's total revenue is exactly equal to the sum of its explicit and implicit costs, the owner

When a firm realizes economies of scale, the short-run average total cost curve slopes downward.

If Whitey's Baseball Bat Manufacturing realizes increasing marginal returns, its total product is

A 10 percent increase in all inputs results in Burger King's output increasing by 9 percent. As a result, Burger King's cost per unit rises and the long-run average total cost curve is increasing.

Tires are considered to be a fixed cost of driving an automobile.

The declining portion of Wal-Mart's long-run average total cost curve is explained by

Figure 4.2 Short-Run Cost Curves -Refer to Figure 4.2. Even if this firm produces zero units of output, it will still

ATM's located at banks, service stations, and stores are a good example of

A production function specifies the minimum amount of output that we can produce with a given amount of resources.

A long-run adjustment is best represented by

The accounting profit of a KFC franchise equals total revenue minus

An increased tax on each newpaper sold will

When marginal cost lies below average total cost, it pulls average total cost downward.

Scarcity and Choice

Market Transactions: Demand and Supply Analysis

Demand and Supply Applications

Competition and Monopoly: Virtues and Vices

Imperfect Competition

Labor Markets

Government and Markets

The Mixed Economy of the United States

Gross Domestic Product and Economic Growth

The Business Cycle, Unemployment, and Inflation

Macroeconomic Instability: Aggregate Demand and Aggregate Supply

Fiscal Policy and the Federal Budget

Money and the Banking System

The Federal Reserve and Monetary Policy

The United States and the Global Economy

International Finance

Economic Systems and Developing Countries

Filters

Exam 4: Production and the Costs of Production

Average total cost reaches a minimum at a lower level of output than average variable cost.

The short run is a period in which the quantity of at least one input is fixed and the quantities of the other inputs can be varied.

Toyota has become known for its concept of

In an attempt to keep costs low, McDonald's is taking steps to

In the ______, a firm can vary its plant size and does not view any cost as fixed.

The total costs of a firm consist of

If a firm's owner finds that the firm's total revenue is exactly equal to the sum of its explicit and implicit costs, the owner

When a firm realizes economies of scale, the short-run average total cost curve slopes downward.

If Whitey's Baseball Bat Manufacturing realizes increasing marginal returns, its total product is

A 10 percent increase in all inputs results in Burger King's output increasing by 9 percent. As a result, Burger King's cost per unit rises and the long-run average total cost curve is increasing.

Tires are considered to be a fixed cost of driving an automobile.

The declining portion of Wal-Mart's long-run average total cost curve is explained by

Figure 4.2 Short-Run Cost Curves -Refer to Figure 4.2. Even if this firm produces zero units of output, it will still

ATM's located at banks, service stations, and stores are a good example of

A production function specifies the minimum amount of output that we can produce with a given amount of resources.

A long-run adjustment is best represented by

The accounting profit of a KFC franchise equals total revenue minus

An increased tax on each newpaper sold will

When marginal cost lies below average total cost, it pulls average total cost downward.

Scarcity and Choice

Market Transactions: Demand and Supply Analysis

Demand and Supply Applications

Competition and Monopoly: Virtues and Vices

Imperfect Competition

Labor Markets

Government and Markets

The Mixed Economy of the United States

Gross Domestic Product and Economic Growth

The Business Cycle, Unemployment, and Inflation

Macroeconomic Instability: Aggregate Demand and Aggregate Supply

Fiscal Policy and the Federal Budget

Money and the Banking System

The Federal Reserve and Monetary Policy

The United States and the Global Economy

International Finance

Economic Systems and Developing Countries

Filters