Question 1

All of the following cost curves are U-shaped except

Accepted Answer

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

Question 2

If, when a firm doubles all its inputs, its average cost of production increases, then production displays

Accepted Answer

A) diminishing returns. 
B) economies of scale. 
C) diseconomies of scale. 
D) declining fixed costs. 
A) diminishing returns. 
B) economies of scale. 
C) diseconomies of scale. 
D) declining fixed costs.

Question 3

Marginal cost is equal to the

Accepted Answer

A) change in total cost divided by the change in output. 
B) change in average total costs divided by the change in output. 
C) change in total product divided by the change in output. 
D) change in average product divided by the change in output. 
A) change in total cost divided by the change in output. 
B) change in average total costs divided by the change in output. 
C) change in total product divided by the change in output. 
D) change in average product divided by the change in output.

Question 4

Jennifer Borts moves her office from the premises she rents at a local mall to her home.As a result of this move,

Accepted Answer

A) Jennifer's explicit costs fall and her implicit costs rise. 
B) Jennifer's total costs fall. 
C) Jennifer's implicit costs fall. 
D) Jennifer's opportunity costs fall. 
A) Jennifer's explicit costs fall and her implicit costs rise. 
B) Jennifer's total costs fall. 
C) Jennifer's implicit costs fall. 
D) Jennifer's opportunity costs fall.

Question 5

Table 11-7
   
Table 11-7 shows cost data for Lotus Lanterns, a producer of whimsical night lights.
-Refer to Table 11-7.What is the marginal cost per unit of production when the firm produces 100 lanterns?

Accepted Answer

A) $420 
B) $32 
C) $11.1 
D) $8.1 
A) $420 
B) $32 
C) $11.1 
D) $8.1

Question 6

In the long run which of the following is true?

Accepted Answer

A) Total cost = fixed cost + variable cost. 
B) The size of a firm's physical plant can be changed but the firm cannot adopt new technology. 
C) There are no fixed costs. 
D) The firm can vary its explicit costs but not its implicit costs. 
A) Total cost = fixed cost + variable cost. 
B) The size of a firm's physical plant can be changed but the firm cannot adopt new technology. 
C) There are no fixed costs. 
D) The firm can vary its explicit costs but not its implicit costs.

Question 7

On an isoquant/isocost graph, the least cost input combination of producing a given output is

Accepted Answer

A) any point on the isoquant curve. 
B) any point on the isocost line. 
C) given by the tangency between the isoquant curve and the isocost line. 
D) one of the intercept values on the graph. 
A) any point on the isoquant curve. 
B) any point on the isocost line. 
C) given by the tangency between the isoquant curve and the isocost line. 
D) one of the intercept values on the graph.

Question 8

Economic costs of production differ from accounting costs in that

Accepted Answer

A) economic costs include expenditures for hired resources while accounting costs do not. 
B) economic costs add the opportunity costs of a firm using its own resources while accounting costs do not. 
C) accounting costs include expenditures for hired resources while economic costs do not. 
D) accounting costs are always larger than economic cost. 
A) economic costs include expenditures for hired resources while accounting costs do not. 
B) economic costs add the opportunity costs of a firm using its own resources while accounting costs do not. 
C) accounting costs include expenditures for hired resources while economic costs do not. 
D) accounting costs are always larger than economic cost.

Question 9

Economic costs include implicit costs but not explicit costs.

Accepted Answer

A) True 
 B)False

Question 10

Figure 11-6
   
Figure 11-6 contains information about the short-run cost structure of a firm.
-Refer to Figure 11-6.In the figure above, which letter represents the average fixed cost curve?

Accepted Answer

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

Question 11

In the long run,

Accepted Answer

A) the firm's fixed costs are greater than its fixed costs in the short run. 
B) all of the firm's costs are explicit costs; there are no implicit costs of production. 
C) the firm is more profitable than it is in the short run. 
D) all of the firm's costs are variable costs. 
A) the firm's fixed costs are greater than its fixed costs in the short run. 
B) all of the firm's costs are explicit costs; there are no implicit costs of production. 
C) the firm is more profitable than it is in the short run. 
D) all of the firm's costs are variable costs.

Question 12

The president of Toyota's Georgetown plant was quoted as saying, "Demand for high volumes saps your energy.Over a period of time, it eroded our focus [and] thinned out the expertise and knowledge we painstakingly built up over the years." Based on this quote, what must be true of the plant's average cost of production curve?

Accepted Answer

A) It is upward-sloping. 
B) It is downward-sloping. 
C) It is a ray from the origin. 
D) It is U-shaped. 
A) It is upward-sloping. 
B) It is downward-sloping. 
C) It is a ray from the origin. 
D) It is U-shaped.

Question 13

If the marginal product of labor is decreasing, then marginal cost of production must be rising.

Accepted Answer

A) True 
 B)False

Question 14

In the long run, the relevant cost is total cost.

Accepted Answer

A) True 
 B)False

Question 15

Average fixed costs of production

Accepted Answer

A) remain constant. 
B) will rise at a fixed rate as more is produced. 
C) graph as a U-shaped curve. 
D) fall as long as output is increased. 
A) remain constant. 
B) will rise at a fixed rate as more is produced. 
C) graph as a U-shaped curve. 
D) fall as long as output is increased.

Question 16

Which of the following is an implicit cost of production?

Accepted Answer

A) the loss in the value of capital equipment due to wear and tear 
B) the salary you pay yourself for running your business 
C) the utility bill paid to water, electricity, and natural gas companies 
D) the interest you pay your mother for the money she loaned you to start your business 
A) the loss in the value of capital equipment due to wear and tear 
B) the salary you pay yourself for running your business 
C) the utility bill paid to water, electricity, and natural gas companies 
D) the interest you pay your mother for the money she loaned you to start your business

Question 17

Which of the following is typically considered a fixed cost by academic book publishers but a variable cost by companies that print books?

Accepted Answer

A) postage and supplies 
B) travel 
C) rent 
D) wages and salaries 
A) postage and supplies 
B) travel 
C) rent 
D) wages and salaries

Question 18

An isoquant is a curve that shows all the combinations of two inputs that will produce the same level of output.

Accepted Answer

A) True 
 B)False

Question 19

Figure 11-3
   
Fancy Footwear manufactures shoes. Figure 11-3 shows Fancy Footwear's marginal product of labor and average product of labor curves in the short run.
-Refer to Figure 11-3.For what quantity of labor does production start to display diminishing returns?

Accepted Answer

A) for more than 1 unit of labor 
B) for more than 4 units of labor 
C) for more than 5 units of labor 
D) for more than 8 units of labor 
A) for more than 1 unit of labor 
B) for more than 4 units of labor 
C) for more than 5 units of labor 
D) for more than 8 units of labor

Question 20

A downward-sloping marginal product of labor curve demonstrates the law of diminishing marginal returns.

Accepted Answer

A) True 
 B)False

All of the following cost curves are U-shaped except

If, when a firm doubles all its inputs, its average cost of production increases, then production displays

Marginal cost is equal to the

Jennifer Borts moves her office from the premises she rents at a local mall to her home.As a result of this move,

Table 11-7 Table 11-7 shows cost data for Lotus Lanterns, a producer of whimsical night lights. -Refer to Table 11-7.What is the marginal cost per unit of production when the firm produces 100 lanterns?

In the long run which of the following is true?

On an isoquant/isocost graph, the least cost input combination of producing a given output is

Economic costs of production differ from accounting costs in that

Economic costs include implicit costs but not explicit costs.

Figure 11-6 Figure 11-6 contains information about the short-run cost structure of a firm. -Refer to Figure 11-6.In the figure above, which letter represents the average fixed cost curve?

In the long run,

If the marginal product of labor is decreasing, then marginal cost of production must be rising.

In the long run, the relevant cost is total cost.

Average fixed costs of production

Which of the following is an implicit cost of production?

Which of the following is typically considered a fixed cost by academic book publishers but a variable cost by companies that print books?

An isoquant is a curve that shows all the combinations of two inputs that will produce the same level of output.

Figure 11-3 Fancy Footwear manufactures shoes. Figure 11-3 shows Fancy Footwear's marginal product of labor and average product of labor curves in the short run. -Refer to Figure 11-3.For what quantity of labor does production start to display diminishing returns?

A downward-sloping marginal product of labor curve demonstrates the law of diminishing marginal returns.

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

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Exam 11: Technology, Production, and Costs

All of the following cost curves are U-shaped except

If, when a firm doubles all its inputs, its average cost of production increases, then production displays

Marginal cost is equal to the

Jennifer Borts moves her office from the premises she rents at a local mall to her home.As a result of this move,

Table 11-7 Table 11-7 shows cost data for Lotus Lanterns, a producer of whimsical night lights. -Refer to Table 11-7.What is the marginal cost per unit of production when the firm produces 100 lanterns?

In the long run which of the following is true?

On an isoquant/isocost graph, the least cost input combination of producing a given output is

Economic costs of production differ from accounting costs in that

Economic costs include implicit costs but not explicit costs.

Figure 11-6 Figure 11-6 contains information about the short-run cost structure of a firm. -Refer to Figure 11-6.In the figure above, which letter represents the average fixed cost curve?

In the long run,

If the marginal product of labor is decreasing, then marginal cost of production must be rising.

In the long run, the relevant cost is total cost.

Average fixed costs of production

Which of the following is an implicit cost of production?

Which of the following is typically considered a fixed cost by academic book publishers but a variable cost by companies that print books?

An isoquant is a curve that shows all the combinations of two inputs that will produce the same level of output.

Figure 11-3 Fancy Footwear manufactures shoes. Figure 11-3 shows Fancy Footwear's marginal product of labor and average product of labor curves in the short run. -Refer to Figure 11-3.For what quantity of labor does production start to display diminishing returns?

A downward-sloping marginal product of labor curve demonstrates the law of diminishing marginal returns.

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Filters