Question 1

There is general agreement among economists that the long-run time period exceeds one year.

Accepted Answer

A) True 
 B)False

Question 2

When marginal cost is less than average total cost,

Accepted Answer

A) marginal cost must be falling. 
B) average variable cost must be falling. 
C) average total cost is falling. 
D) average total cost is rising. 
A) marginal cost must be falling. 
B) average variable cost must be falling. 
C) average total cost is falling. 
D) average total cost is rising.

Question 3

Figure 13-9
  
-Refer to Figure 13-9.The firm experiences economies of scale if it changes its level of output

Accepted Answer

A) from Q₁ to Q₂. 
B) from Q₂ to Q₃. 
C) from Q₃ to Q₄. 
D) from Q₄ to Q₅. 
A) from Q₁ to Q₂. 
B) from Q₂ to Q₃. 
C) from Q₃ to Q₄. 
D) from Q₄ to Q₅.

Question 4

Table 13-5
  
-Refer to Table 13-5.What is the marginal cost of producing the first widget?

Accepted Answer

A) $1.00 
B) $10.00 
C) $11.00 
D) It can't be determined from the information given. 
A) $1.00 
B) $10.00 
C) $11.00 
D) It can't be determined from the information given.

Question 5

Which of the following expressions is correct?

Accepted Answer

A) marginal cost = (change in quantity of output)/(change in total cost) 
B) average total cost = total cost/quantity of output 
C) total cost = variable cost + marginal cost 
D) average variable cost = quantity of output/total variable cost 
A) marginal cost = (change in quantity of output)/(change in total cost) 
B) average total cost = total cost/quantity of output 
C) total cost = variable cost + marginal cost 
D) average variable cost = quantity of output/total variable cost

Question 6

The marginal product of any input

Accepted Answer

A) is the increase in total cost associated with a one-unit increase in production. 
B) is the change in total output associated with a $1.00 increase in total cost. 
C) is the increase in total cost resulting from the hiring of an additional worker. 
D) is the increase in total output obtained from one additional unit of that input. 
A) is the increase in total cost associated with a one-unit increase in production. 
B) is the change in total output associated with a $1.00 increase in total cost. 
C) is the increase in total cost resulting from the hiring of an additional worker. 
D) is the increase in total output obtained from one additional unit of that input.

Question 7

Table 13-5
  
-Refer to Table 13-5.The marginal cost of producing the sixth widget is

Accepted Answer

A) $1.00. 
B) $3.50. 
C) $5.00. 
D) $6.00. 
A) $1.00. 
B) $3.50. 
C) $5.00. 
D) $6.00.

Question 8

The marginal product of labor is equal to the

Accepted Answer

A) incremental cost associated with a one unit increase in labor. 
B) incremental profit associated with a one unit increase in labor. 
C) increase in labor necessary to generate a one unit increase in output. 
D) increase in output obtained from a one unit increase in labor. 
A) incremental cost associated with a one unit increase in labor. 
B) incremental profit associated with a one unit increase in labor. 
C) increase in labor necessary to generate a one unit increase in output. 
D) increase in output obtained from a one unit increase in labor.

Question 9

Several related measures of cost can be derived from a firm's total cost.

Accepted Answer

A) True 
 B)False

Question 10

If a firm wants to capitalize on economies of scale,it may be able to do so by

Accepted Answer

A) assigning limited tasks to its employees, so they can master those tasks. 
B) employing a smaller number of workers. 
C) producing a smaller quantity of output. 
D) producing an output level higher than the efficient scale. 
A) assigning limited tasks to its employees, so they can master those tasks. 
B) employing a smaller number of workers. 
C) producing a smaller quantity of output. 
D) producing an output level higher than the efficient scale.

Question 11

Average total cost tells us the

Accepted Answer

A) total cost of the first unit of output, if total cost is divided evenly over all the units produced. 
B) cost of a typical unit of output, if total cost is divided evenly over all the units produced. 
C) cost of the last unit of output, if total cost does not include a fixed cost component. 
D) variable cost of a firm that is producing at least one unit of output. 
A) total cost of the first unit of output, if total cost is divided evenly over all the units produced. 
B) cost of a typical unit of output, if total cost is divided evenly over all the units produced. 
C) cost of the last unit of output, if total cost does not include a fixed cost component. 
D) variable cost of a firm that is producing at least one unit of output.

Question 12

Average total cost equals

Accepted Answer

A) change in total costs divided by quantity produced. 
B) change in total costs divided by change in quantity produced. 
C) (fixed costs + variable costs) divided by quantity produced. 
D) (fixed costs + variable costs) divided by change in quantity produced. 
A) change in total costs divided by quantity produced. 
B) change in total costs divided by change in quantity produced. 
C) (fixed costs + variable costs) divided by quantity produced. 
D) (fixed costs + variable costs) divided by change in quantity produced.

Question 13

Explicit costs

Accepted Answer

A) do not require an outlay of money by the firm. 
B) enter into the accountant's measurement of a firm's profit. 
C) enter into the economist's measurement of a firm's profit. 
D) Both b and c are correct. 
A) do not require an outlay of money by the firm. 
B) enter into the accountant's measurement of a firm's profit. 
C) enter into the economist's measurement of a firm's profit. 
D) Both b and c are correct.

Question 14

When a firm is operating at an efficient scale,

Accepted Answer

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

Question 15

Table 13-8
  
-Refer to Table 13-8.What is the variable cost of producing 5 gigaplots at Jimmy's Gigaplot factory?

Accepted Answer

A) $64 
B) $85 
C) $90 
D) $100 
A) $64 
B) $85 
C) $90 
D) $100

Question 16

Scenario 13-4
Suppose that a given firm experiences decreasing marginal product of labor with the addition of each worker regardless of the current output level.
-Refer to Scenario 13-4.Average total cost will be

Accepted Answer

A) rising at all points. 
B) falling at all points. 
C) constant. 
D) U-shaped. 
A) rising at all points. 
B) falling at all points. 
C) constant. 
D) U-shaped.

Question 17

Table 13-3
  
-Refer to Table 13-3.Gallo's cork factory experiences diminishing marginal product of labor with the addition of which worker?

Accepted Answer

A) The third worker. 
B) The fourth worker. 
C) The fifth worker. 
D) The sixth worker. 
A) The third worker. 
B) The fourth worker. 
C) The fifth worker. 
D) The sixth worker.

Question 18

How would a production function that exhibits decreasing marginal product affect the shape of the total cost curve? Explain or draw a graph.

Accepted Answer

The total cost curve will incr

Question 19

Figure 13-4
  
-Refer to Figure 13-4.Which of the above marginal cost curves reflects the existence of diminishing marginal product?

Accepted Answer

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

Question 20

Table 13-2
  
-Refer to Table 13-2.What is the marginal product of the fourth worker?

Accepted Answer

A) 65 
B) 70 
C) 75 
D) 80 
A) 65 
B) 70 
C) 75 
D) 80

Exam 13: The Costs of Production

There is general agreement among economists that the long-run time period exceeds one year.

When marginal cost is less than average total cost,

Figure 13-9 -Refer to Figure 13-9.The firm experiences economies of scale if it changes its level of output

Table 13-5 -Refer to Table 13-5.What is the marginal cost of producing the first widget?

Which of the following expressions is correct?

The marginal product of any input

Table 13-5 -Refer to Table 13-5.The marginal cost of producing the sixth widget is

The marginal product of labor is equal to the

Several related measures of cost can be derived from a firm's total cost.

If a firm wants to capitalize on economies of scale,it may be able to do so by

Average total cost tells us the

Average total cost equals

Explicit costs

When a firm is operating at an efficient scale,

Table 13-8 -Refer to Table 13-8.What is the variable cost of producing 5 gigaplots at Jimmy's Gigaplot factory?

Scenario 13-4 Suppose that a given firm experiences decreasing marginal product of labor with the addition of each worker regardless of the current output level. -Refer to Scenario 13-4.Average total cost will be

Table 13-3 -Refer to Table 13-3.Gallo's cork factory experiences diminishing marginal product of labor with the addition of which worker?

How would a production function that exhibits decreasing marginal product affect the shape of the total cost curve? Explain or draw a graph.

Figure 13-4 -Refer to Figure 13-4.Which of the above marginal cost curves reflects the existence of diminishing marginal product?

Table 13-2 -Refer to Table 13-2.What is the marginal product of the fourth worker?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Applications

Supply, demand, and Government Policies

Consumers, producers, and the Efficiency of Markets

Application: the Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

Firms in Competitive Markets

Monopoly

Oligopoly

Monopolistic Competition

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short Run Trade Off Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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