Question 1

A firm's total fixed cost equals $2,500. The firm's average fixed cost at 1, 5, and 10 units of output, respectively, will be:

Accepted Answer

A) $2,500, $2,500, and $2,500. 
B) $2,500, $500, and $250. 
C) $2,500, $12,500, and $25,000. 
D) $2,500, $1,250, and $250. 
A) $2,500, $2,500, and $2,500. 
B) $2,500, $500, and $250. 
C) $2,500, $12,500, and $25,000. 
D) $2,500, $1,250, and $250.

Question 2

Exhibit
​
  
-Refer to Exhibit. Which of the following is false?

Accepted Answer

A) The marginal product of the first, second and third worker hired is the same. 
B) The marginal product of the sixth worker is higher than for any other worker. 
C) A firm trying to increase its profits would hire nine workers based on the information provided. 
D) If the prices of oranges are high enough that it is worth hiring five workers, it would also be worth hiring six workers. 
A) The marginal product of the first, second and third worker hired is the same. 
B) The marginal product of the sixth worker is higher than for any other worker. 
C) A firm trying to increase its profits would hire nine workers based on the information provided. 
D) If the prices of oranges are high enough that it is worth hiring five workers, it would also be worth hiring six workers.

Question 3

In the table below, which of the following is not true?

Accepted Answer

A) the marginal product of the 4th worker is the same as the marginal product of the 6th worker. 
B) the marginal product of the 7th worker is half that of the 4th worker. 
C) the marginal product of the 8th worker is -10. 
D) The 8th worker hired is inherently less productive than the other workers hired before him. 
A) the marginal product of the 4th worker is the same as the marginal product of the 6th worker. 
B) the marginal product of the 7th worker is half that of the 4th worker. 
C) the marginal product of the 8th worker is -10. 
D) The 8th worker hired is inherently less productive than the other workers hired before him.

Question 4

If average variable cost exceeds average fixed cost at a particular level of output:

Accepted Answer

A) Profits must be positive. 
B) That fact is meaningless for deciding the quantity of output to produce. 
C) It is more likely that the output level is low relative to the designed capacity of the production facility than that the output level is low relative to the designed capacity of the production facility. 
D) Both b and c. are likely true. 
A) Profits must be positive. 
B) That fact is meaningless for deciding the quantity of output to produce. 
C) It is more likely that the output level is low relative to the designed capacity of the production facility than that the output level is low relative to the designed capacity of the production facility. 
D) Both b and c. are likely true.

Question 5

Exhibit
The table below shows how total cost varies with output in a factory producing watches:​
  
-Refer to Exhibit. If the output equals four watches per week, then the average total cost of producing a watch equals:

Accepted Answer

A) $72. 
B) $3. 
C) $18. 
D) $5.50. 
A) $72. 
B) $3. 
C) $18. 
D) $5.50.

Question 6

Campbell recently began running his brother's lumber mill. Last month he took in $10,000 in sales revenue and paid $6,800 in out-of-pocket costs. He made an economic profit last month if his implicit costs were:

Accepted Answer

A) $2000. 
B) $3200. 
C) $4800. 
D) $6600. 
A) $2000. 
B) $3200. 
C) $4800. 
D) $6600.

Question 7

Dave recently began running his father's farm. Last year he took in $15,000 in sales revenue and paid $10,200 in out-of-pocket costs. He made an economic profit last year:

Accepted Answer

A) if his implicit costs were $3000. 
B) if his implicit costs were $4000. 
C) if his implicit costs were $5000. 
D) In both cases a. and b. 
A) if his implicit costs were $3000. 
B) if his implicit costs were $4000. 
C) if his implicit costs were $5000. 
D) In both cases a. and b.

Question 8

Refer to Exhibit. How much are average fixed costs (in dollars) at 4 units of output?

Accepted Answer

A) 10 
B) 20 
C) 30 
D) 40 
A) 10 
B) 20 
C) 30 
D) 40

Question 9

​Exhibit
  
-Refer to Exhibit. At output level 0Q, average variable cost equals:

Accepted Answer

A) QF. 
B) FE. 
C) QD. 
D) QE. 
A) QF. 
B) FE. 
C) QD. 
D) QE.

Question 10

Exhibit
  
-Refer to Exhibit. What is the level of the firm's total fixed cost (in thousands)?

Accepted Answer

A) $0 
B) $10 
C) $16 
D) $50 
A) $0 
B) $10 
C) $16 
D) $50

Question 11

If Bob's business earned a $500,000 accounting profit, but had $1,000,000 in implicit costs, it would earn an economic profit.

Accepted Answer

A) True 
 B)False

A firm's total fixed cost equals $2,500. The firm's average fixed cost at 1, 5, and 10 units of output, respectively, will be:

Exhibit -Refer to Exhibit. Which of the following is false?

In the table below, which of the following is not true?

If average variable cost exceeds average fixed cost at a particular level of output:

Exhibit The table below shows how total cost varies with output in a factory producing watches: -Refer to Exhibit. If the output equals four watches per week, then the average total cost of producing a watch equals:

Campbell recently began running his brother's lumber mill. Last month he took in $10,000 in sales revenue and paid $6,800 in out-of-pocket costs. He made an economic profit last month if his implicit costs were:

Dave recently began running his father's farm. Last year he took in $15,000 in sales revenue and paid $10,200 in out-of-pocket costs. He made an economic profit last year:

Refer to Exhibit. How much are average fixed costs (in dollars) at 4 units of output?

Exhibit -Refer to Exhibit. At output level 0Q, average variable cost equals:

Exhibit -Refer to Exhibit. What is the level of the firm's total fixed cost (in thousands)?

If Bob's business earned a $500,000 accounting profit, but had $1,000,000 in implicit costs, it would earn an economic profit.

Market Failure, Market Efficiency and Welfare

Elasticities

Market in Motion and Price Controls

Demand Supply and Market Equilibrium

Economics Eight Powerful Ideas and the Role and Method of Economics

International Finance

International Trade, Income Poverty and Health Care

The Markets for Labor Capital and Land

Oligopoly and Strategic Behavior

Monopolistic Competition, Product Differentiation, Monopoly and Antitrust

Firms in Perfectly Competitive Markets

Consumer Choice Theory

Filters

Exam 12: The Firm Production and Costs

A firm's total fixed cost equals $2,500. The firm's average fixed cost at 1, 5, and 10 units of output, respectively, will be:

Exhibit ​ -Refer to Exhibit. Which of the following is false?

In the table below, which of the following is not true?

If average variable cost exceeds average fixed cost at a particular level of output:

Exhibit The table below shows how total cost varies with output in a factory producing watches:​ -Refer to Exhibit. If the output equals four watches per week, then the average total cost of producing a watch equals:

Campbell recently began running his brother's lumber mill. Last month he took in $10,000 in sales revenue and paid $6,800 in out-of-pocket costs. He made an economic profit last month if his implicit costs were:

Dave recently began running his father's farm. Last year he took in $15,000 in sales revenue and paid $10,200 in out-of-pocket costs. He made an economic profit last year:

Refer to Exhibit. How much are average fixed costs (in dollars) at 4 units of output?

​Exhibit -Refer to Exhibit. At output level 0Q, average variable cost equals:

Exhibit -Refer to Exhibit. What is the level of the firm's total fixed cost (in thousands)?

If Bob's business earned a $500,000 accounting profit, but had $1,000,000 in implicit costs, it would earn an economic profit.

Market Failure, Market Efficiency and Welfare

Elasticities

Market in Motion and Price Controls

Demand Supply and Market Equilibrium

Economics Eight Powerful Ideas and the Role and Method of Economics

International Finance

International Trade, Income Poverty and Health Care

The Markets for Labor Capital and Land

Oligopoly and Strategic Behavior

Monopolistic Competition, Product Differentiation, Monopoly and Antitrust

Firms in Perfectly Competitive Markets

Consumer Choice Theory

Filters

Exhibit -Refer to Exhibit. Which of the following is false?

Exhibit The table below shows how total cost varies with output in a factory producing watches: -Refer to Exhibit. If the output equals four watches per week, then the average total cost of producing a watch equals:

Exhibit -Refer to Exhibit. At output level 0Q, average variable cost equals: