Question 1

Economic profit equals total revenue minus total

Accepted Answer

A)  explicit costs. 
B)  opportunity costs. 
C)  implicit costs. 
D)  accounting costs. 
E)  entrepreneur's costs. 
A)  explicit costs. 
B)  opportunity costs. 
C)  implicit costs. 
D)  accounting costs. 
E)  entrepreneur's costs.

Question 2

In the long run,if 1,000 units are produced at a cost of $8,000 and 1,200 units at a cost of $9,200,then over this range of output there are

Accepted Answer

A)  constant economies of scale. 
B)  constant returns to scale. 
C)  diseconomies of scale. 
D)  economies of scale. 
E)  constant diseconomies of scale. 
A)  constant economies of scale. 
B)  constant returns to scale. 
C)  diseconomies of scale. 
D)  economies of scale. 
E)  constant diseconomies of scale.

Question 3

The cost that does not change as output changes is

Accepted Answer

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

Question 4

An increase in the price of labor (a variable resource)shifts

Accepted Answer

A)  all cost curves upward. 
B)  the variable cost curves upward but leaves the fixed cost curves unchanged. 
C)  the fixed cost curves upward but leaves the variable cost curves unchanged. 
D)  the marginal cost curve rightward. 
E)  none of the cost curves. 
A)  all cost curves upward. 
B)  the variable cost curves upward but leaves the fixed cost curves unchanged. 
C)  the fixed cost curves upward but leaves the variable cost curves unchanged. 
D)  the marginal cost curve rightward. 
E)  none of the cost curves.

Question 5

The main sources of economies of scale are

Accepted Answer

A)  increasing marginal cost and decreasing marginal product. 
B)  specialization of resources such as labor and capital. 
C)  caused by the difficulty of coordinating and controlling large enterprises. 
D)  decreasing marginal cost and increasing marginal product. 
E)  an increase in a firm's bargaining power to lower the wage rate and the cost of capital as the firm's output increases. 
A)  increasing marginal cost and decreasing marginal product. 
B)  specialization of resources such as labor and capital. 
C)  caused by the difficulty of coordinating and controlling large enterprises. 
D)  decreasing marginal cost and increasing marginal product. 
E)  an increase in a firm's bargaining power to lower the wage rate and the cost of capital as the firm's output increases.

Question 6

Chuck owns a factory that produces leather footballs.His total fixed cost equaled $86,000 last year.His total cost equaled $286,000 last year.Hence Chuck's

Accepted Answer

A)  total variable cost was zero. 
B)  incurred an economic loss. 
C)  total variable cost equaled $200,000. 
D)  total variable cost equaled $372,000. 
E)  None of the above answers is correct. 
A)  total variable cost was zero. 
B)  incurred an economic loss. 
C)  total variable cost equaled $200,000. 
D)  total variable cost equaled $372,000. 
E)  None of the above answers is correct.

Question 7

In the long run,constant returns to scale necessarily occur when the firm increases its production and the firm's

Accepted Answer

A)  total cost increases. 
B)  total cost does not change. 
C)  average total cost increases . 
D)  average total cost does not change. 
E)  production increases by more than does the firm's total cost. 
A)  total cost increases. 
B)  total cost does not change. 
C)  average total cost increases . 
D)  average total cost does not change. 
E)  production increases by more than does the firm's total cost.

Question 8

Average total cost equals

Accepted Answer

A)  marginal cost divided by output. 
B)  average fixed cost plus average variable cost. 
C)  total fixed cost plus total variable cost. 
D)  marginal cost plus opportunity cost. 
E)  marginal cost multiplied by the quantity of output. 
A)  marginal cost divided by output. 
B)  average fixed cost plus average variable cost. 
C)  total fixed cost plus total variable cost. 
D)  marginal cost plus opportunity cost. 
E)  marginal cost multiplied by the quantity of output.

Question 9

If a company triples its output and its average cost decreases,then the firm is definitely experiencing

Accepted Answer

A)  diseconomies of scale. 
B)  decreasing marginal returns. 
C)  increasing marginal returns. 
D)  economies of scale. 
E)  Both answers C and D are correct. 
A)  diseconomies of scale. 
B)  decreasing marginal returns. 
C)  increasing marginal returns. 
D)  economies of scale. 
E)  Both answers C and D are correct.

Question 10

As a typical firm increases its output,its marginal cost

Accepted Answer

A)  is constant. 
B)  decreases at first and then increases. 
C)  increases at first and then decreases. 
D)  decreases. 
E)  is negative at first and then positive. 
A)  is constant. 
B)  decreases at first and then increases. 
C)  increases at first and then decreases. 
D)  decreases. 
E)  is negative at first and then positive.

Question 11

Which of the following is correct about marginal and average products?

Accepted Answer

A)  When the marginal product is increasing, the average product must be increasing. 
B)  When the marginal product exceeds the average product, the average product must be increasing. 
C)  When the average product is increasing, the marginal product must be decreasing. 
D)  When the marginal product is decreasing, the average product must be decreasing. 
E)  When the marginal product is increasing, the average product must be decreasing. 
A)  When the marginal product is increasing, the average product must be increasing. 
B)  When the marginal product exceeds the average product, the average product must be increasing. 
C)  When the average product is increasing, the marginal product must be decreasing. 
D)  When the marginal product is decreasing, the average product must be decreasing. 
E)  When the marginal product is increasing, the average product must be decreasing.

Question 12

Which of the following is a list of fixed inputs for a hospital?

Accepted Answer

A)  bandages, casts, and other materials 
B)  antibiotics, pain medication, and other prescription drugs 
C)  the emergency room, intensive care unit, and other facilities 
D)  the nurses, receptionists, and other employees 
E)  the lobby, the doctors, and the electricity it uses 
A)  bandages, casts, and other materials 
B)  antibiotics, pain medication, and other prescription drugs 
C)  the emergency room, intensive care unit, and other facilities 
D)  the nurses, receptionists, and other employees 
E)  the lobby, the doctors, and the electricity it uses

Question 13

Which of the following is an explicit cost in Jim's business venture?

Accepted Answer

A)  the salary Jim could have earned at another job 
B)  the interest Jim does not earn because he invested his savings in his business 
C)  the wages Jim pays his workers 
D)  Jim's normal profit 
E)  Answers A, B, and D are correct. 
A)  the salary Jim could have earned at another job 
B)  the interest Jim does not earn because he invested his savings in his business 
C)  the wages Jim pays his workers 
D)  Jim's normal profit 
E)  Answers A, B, and D are correct.

Question 14

Which of the following always decreases when output increases?

Accepted Answer

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

Question 15

-The above table shows the total product schedule for Hair Today,a hair styling salon.The average product when four workers are hired is

Accepted Answer

A)  10 hair stylings. 
B)  15 hair stylings. 
C)  20 hair stylings. 
D)  240 hair stylings. 
E)  the same as when five workers are hired. 
A)  10 hair stylings. 
B)  15 hair stylings. 
C)  20 hair stylings. 
D)  240 hair stylings. 
E)  the same as when five workers are hired.

Question 16

-Paulette owns a pizza parlor.Her total cost schedule is in the above table.Her total fixed cost is equal to

Accepted Answer

A)  $20. 
B)  $35. 
C)  $79. 
D)  $85. 
E)  Some amount, but more information is needed to determine her fixed cost. 
A)  $20. 
B)  $35. 
C)  $79. 
D)  $85. 
E)  Some amount, but more information is needed to determine her fixed cost.

Question 17

What are diseconomies of scale and why might they occur?

Accepted Answer

Diseconomies of scale are features of th

Question 18

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 19

The total product is 10 units.The average total cost is $30 and the average fixed cost is $10.What is the amount of the total variable cost?

Accepted Answer

A)  $20 
B)  $200 
C)  $300 
D)  $10 
E)  It is impossible to determine with the information given. 
A)  $20 
B)  $200 
C)  $300 
D)  $10 
E)  It is impossible to determine with the information given.

Question 20

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.

Economic profit equals total revenue minus total

In the long run,if 1,000 units are produced at a cost of $8,000 and 1,200 units at a cost of $9,200,then over this range of output there are

The cost that does not change as output changes is

An increase in the price of labor (a variable resource)shifts

The main sources of economies of scale are

Chuck owns a factory that produces leather footballs.His total fixed cost equaled $86,000 last year.His total cost equaled $286,000 last year.Hence Chuck's

In the long run,constant returns to scale necessarily occur when the firm increases its production and the firm's

Average total cost equals

If a company triples its output and its average cost decreases,then the firm is definitely experiencing

As a typical firm increases its output,its marginal cost

Which of the following is correct about marginal and average products?

Which of the following is a list of fixed inputs for a hospital?

Which of the following is an explicit cost in Jim's business venture?

Which of the following always decreases when output increases?

-The above table shows the total product schedule for Hair Today,a hair styling salon.The average product when four workers are hired is

-Paulette owns a pizza parlor.Her total cost schedule is in the above table.Her total fixed cost is equal to

What are diseconomies of scale and why might they occur?

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

The total product is 10 units.The average total cost is $30 and the average fixed cost is $10.What is the amount of the total variable cost?

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

Getting Started

The Usand 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

Economic profit equals total revenue minus total

In the long run,if 1,000 units are produced at a cost of $8,000 and 1,200 units at a cost of $9,200,then over this range of output there are

The cost that does not change as output changes is

An increase in the price of labor (a variable resource)shifts

The main sources of economies of scale are

Chuck owns a factory that produces leather footballs.His total fixed cost equaled $86,000 last year.His total cost equaled $286,000 last year.Hence Chuck's

In the long run,constant returns to scale necessarily occur when the firm increases its production and the firm's

Average total cost equals

If a company triples its output and its average cost decreases,then the firm is definitely experiencing

As a typical firm increases its output,its marginal cost

Which of the following is correct about marginal and average products?

Which of the following is a list of fixed inputs for a hospital?

Which of the following is an explicit cost in Jim's business venture?

Which of the following always decreases when output increases?

-The above table shows the total product schedule for Hair Today,a hair styling salon.The average product when four workers are hired is

-Paulette owns a pizza parlor.Her total cost schedule is in the above table.Her total fixed cost is equal to

What are diseconomies of scale and why might they occur?

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

The total product is 10 units.The average total cost is $30 and the average fixed cost is $10.What is the amount of the total variable cost?

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

Getting Started

The Usand 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