Question 1

Figure 13-6
  
-Refer to Figure 13-6.What do the three average-total-cost curves on the diagram correspond to

Accepted Answer

A) three different time horizons 
B) three different products 
C) three different firms 
D) three different factory sizes 
A) three different time horizons 
B) three different products 
C) three different firms 
D) three different factory sizes

Question 2

When marginal cost is rising,what must happen to average variable cost

Accepted Answer

A) It must be rising. 
B) It must be falling. 
C) It must be constant. 
D) It could be rising or falling. 
A) It must be rising. 
B) It must be falling. 
C) It must be constant. 
D) It could be rising or falling.

Question 3

What is the cost of producing the typical unit of output

Accepted Answer

A) the firm's average total cost 
B) the firm's opportunity cost 
C) the firm's average variable cost 
D) the firm's marginal cost 
A) the firm's average total cost 
B) the firm's opportunity cost 
C) the firm's average variable cost 
D) the firm's marginal cost

Question 4

Variable costs equal fixed costs when nothing is produced.

Accepted Answer

A) True 
 B)False

Question 5

Examination of the costs of production is unnecessary to the field of industrial organization.

Accepted Answer

A) True 
 B)False

Question 6

Figure 13-6
  
-Refer to Figure 13-6.When does the firm experience economies of scale

Accepted Answer

A) if it changes its level of output from Q₁ to Q₂ 
B) if it changes its level of output from Q₂ to Q₃ 
C) if it changes its level of output from Q₃ to Q₄ 
D) if it changes its level of output from Q₄ to Q₅ 
A) if it changes its level of output from Q₁ to Q₂ 
B) if it changes its level of output from Q₂ to Q₃ 
C) if it changes its level of output from Q₃ to Q₄ 
D) if it changes its level of output from Q₄ to Q₅

Question 7

Complete the following table.

Accepted Answer

The answer of Complete the following table.
  ...

Question 8

In some cases,specialization allows larger factories to produce goods at a lower average cost than smaller factories.

Accepted Answer

A) True 
 B)False

Question 9

Let L represent the number of workers hired by a firm and let Q represent that firm's quantity of output.Assume two points on the firm's production function are (L = 12,Q = 122) and (L = 13,Q = 132).What is the marginal product of the 13th worker

Accepted Answer

A) 8 units of output 
B) 10 units of output 
C) 122 units of output 
D) 130 units of output 
A) 8 units of output 
B) 10 units of output 
C) 122 units of output 
D) 130 units of output

Question 10

Which statement explains the relationship among different cost functions

Accepted Answer

A) The marginal cost of the fifth unit of output equals the total cost of five units minus the total cost of four units. 
B) The average variable cost of seven units equals total fixed cost of seven units plus the total variable cost of seven units. 
C) The marginal cost of the fifth unit of output equals the total fixed cost of five units minus the total variable cost of five units. 
D) The total cost of seven units equals the total variable cost of seven units times seven. 
A) The marginal cost of the fifth unit of output equals the total cost of five units minus the total cost of four units. 
B) The average variable cost of seven units equals total fixed cost of seven units plus the total variable cost of seven units. 
C) The marginal cost of the fifth unit of output equals the total fixed cost of five units minus the total variable cost of five units. 
D) The total cost of seven units equals the total variable cost of seven units times seven.

Question 11

What are opportunity costs? How do explicit and implicit costs relate to opportunity costs?

Accepted Answer

The opportunity cost of an ite

Question 12

Table 13-3  
-Refer to Table 13-3.What is the average fixed cost for the month if nine instructional modules are produced

Accepted Answer

A) $108 
B) $120 
C) $150 
D) $175 
A) $108 
B) $120 
C) $150 
D) $175

Question 13

Thelma owns and operates a small meat pie stand at a local farmer's market.When Thelma is producing a small quantity of meat pies,she has few workers and her equipment is not being fully utilized.If she can easily put her idle resources to use,what will happen to the costs of production

Accepted Answer

A) The marginal cost of an extra worker is large. 
B) The marginal cost of one more meat pie is small. 
C) The average variable cost of an extra worker will increase. 
D) The average variable cost of an extra worker will decrease. 
A) The marginal cost of an extra worker is large. 
B) The marginal cost of one more meat pie is small. 
C) The average variable cost of an extra worker will increase. 
D) The average variable cost of an extra worker will decrease.

Question 14

According to the mathematical laws that govern the relationship between average total cost and marginal cost, where must these two curves intersect?

Accepted Answer

The two curves will

Question 15

What do a firm's opportunity costs of production amount to

Accepted Answer

A) explicit costs only 
B) implicit costs only 
C) explicit costs and implicit costs combined 
D) explicit costs, implicit costs, and total revenue combined 
A) explicit costs only 
B) implicit costs only 
C) explicit costs and implicit costs combined 
D) explicit costs, implicit costs, and total revenue combined

Question 16

When a firm's only variable input is labour,what does the slope of the production function measure

Accepted Answer

A) the quantity of labour 
B) the quantity of output 
C) the total cost 
D) the marginal product of labour 
A) the quantity of labour 
B) the quantity of output 
C) the total cost 
D) the marginal product of labour

Question 17

What are accountants primarily interested in

Accepted Answer

A) the flow of money into and out of firms 
B) the stock of assets of firms 
C) the marginal costs of production of firms 
D) the taxes due on capital assets of firms 
A) the flow of money into and out of firms 
B) the stock of assets of firms 
C) the marginal costs of production of firms 
D) the taxes due on capital assets of firms

Question 18

Table 13-4
At Beth’s Bakery, Beth pays all her workers the same wage and labour is her only variable cost. Consider the following information about bread production at Beth’s Bakery:
 
-From the information in Table 13-4,what can we conclude about Beth's marginal cost

Accepted Answer

A) It increases as output increases from 0 to 14, but declines after that. 
B) It declines as output increases from 0 to 14, but increases after that. 
C) It declines as output increases from 0 to 40, but increases after that. 
D) It continually increases as output rises. 
A) It increases as output increases from 0 to 14, but declines after that. 
B) It declines as output increases from 0 to 14, but increases after that. 
C) It declines as output increases from 0 to 40, but increases after that. 
D) It continually increases as output rises.

Question 19

Which costs do NOT vary with the amount of output a firm produces

Accepted Answer

A) average fixed costs 
B) fixed costs and average fixed costs 
C) marginal costs and average fixed costs 
D) fixed costs 
A) average fixed costs 
B) fixed costs and average fixed costs 
C) marginal costs and average fixed costs 
D) fixed costs

Question 20

Why is average total cost very high when a small amount of output is produced

Accepted Answer

A) Average variable cost is high. 
B) Average fixed cost is high. 
C) Marginal cost is high. 
D) Marginal cost is low. 
A) Average variable cost is high. 
B) Average fixed cost is high. 
C) Marginal cost is high. 
D) Marginal cost is low.

Exam 13: The Costs of Production

Figure 13-6 -Refer to Figure 13-6.What do the three average-total-cost curves on the diagram correspond to

When marginal cost is rising,what must happen to average variable cost

What is the cost of producing the typical unit of output

Variable costs equal fixed costs when nothing is produced.

Examination of the costs of production is unnecessary to the field of industrial organization.

Figure 13-6 -Refer to Figure 13-6.When does the firm experience economies of scale

Complete the following table.

In some cases,specialization allows larger factories to produce goods at a lower average cost than smaller factories.

Let L represent the number of workers hired by a firm and let Q represent that firm's quantity of output.Assume two points on the firm's production function are (L = 12,Q = 122) and (L = 13,Q = 132).What is the marginal product of the 13th worker

Which statement explains the relationship among different cost functions

What are opportunity costs? How do explicit and implicit costs relate to opportunity costs?

Table 13-3 -Refer to Table 13-3.What is the average fixed cost for the month if nine instructional modules are produced

Thelma owns and operates a small meat pie stand at a local farmer's market.When Thelma is producing a small quantity of meat pies,she has few workers and her equipment is not being fully utilized.If she can easily put her idle resources to use,what will happen to the costs of production

According to the mathematical laws that govern the relationship between average total cost and marginal cost, where must these two curves intersect?

What do a firm's opportunity costs of production amount to

When a firm's only variable input is labour,what does the slope of the production function measure

What are accountants primarily interested in

Table 13-4 At Beth’s Bakery, Beth pays all her workers the same wage and labour is her only variable cost. Consider the following information about bread production at Beth’s Bakery: -From the information in Table 13-4,what can we conclude about Beth's marginal cost

Which costs do NOT vary with the amount of output a firm produces

Why is average total cost very high when a small amount of output is produced

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

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

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

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