Question 1

-Paulette owns a pizza parlor.Her total cost schedule is in the above table.Her marginal cost of producing the fifth pizza is

Accepted Answer

A) $8. 
B) between $8.01 and $10.00. 
C) between $10.01 and $14.00. 
D) between $14.01 and $78.00. 
E) more than $78.01. 
A) $8. 
B) between $8.01 and $10.00. 
C) between $10.01 and $14.00. 
D) between $14.01 and $78.00. 
E) more than $78.01.

Question 2

Cost curves shift if
I∙technology changes.
Ii∙the prices of factors of production change.
Iii∙productivity changes.

Accepted Answer

A) only i 
B) i and iii 
C) only ii 
D) i and ii 
E) i, ii, and iii 
A) only i 
B) i and iii 
C) only ii 
D) i and ii 
E) i, ii, and iii

Question 3

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 4

-The table above shows the total product schedule for Rick's Lawn Service, a yard care company.When the ________ worker is hired, the average product of labor ________ the marginal product of labor.

Accepted Answer

A) 4th; exceeds 
B) 5th; exceeds 
C) 6th; exceeds 
D) 7th; is less than 
E) 7th; equals 
A) 4th; exceeds 
B) 5th; exceeds 
C) 6th; exceeds 
D) 7th; is less than 
E) 7th; equals

Question 5

Which of the following contributes to increasing marginal returns?

Accepted Answer

A) decreasing implicit costs 
B) increasing explicit costs 
C) specialization of labor 
D) Both answers A and B are correct. 
E) Both answers A and C are correct. 
A) decreasing implicit costs 
B) increasing explicit costs 
C) specialization of labor 
D) Both answers A and B are correct. 
E) Both answers A and C are correct.

Question 6

Normal profit is

Accepted Answer

A) part of the firm's opportunity costs. 
B) the same as economic profits. 
C) part of the firm's explicit costs. 
D) Answers A and B are correct. 
E) Answers A and C are correct. 
A) part of the firm's opportunity costs. 
B) the same as economic profits. 
C) part of the firm's explicit costs. 
D) Answers A and B are correct. 
E) Answers A and C are correct.

Question 7

Which of the following is an example of an implicit cost?

Accepted Answer

A) rent on a building 
B) the cost of fertilizer for a farmer 
C) the economic depreciation of capital equipment the business owns 
D) the cost of fuel and materials. 
E) wages paid to workers 
A) rent on a building 
B) the cost of fertilizer for a farmer 
C) the economic depreciation of capital equipment the business owns 
D) the cost of fuel and materials. 
E) wages paid to workers

Question 8

To produce more output in the short run, a firm must employ more of

Accepted Answer

A) all its resources. 
B) its fixed resources. 
C) its variable resources. 
D) the least costly resources regardless of whether they are fixed or variable. 
E) Firms cannot produce more output in the short run. 
A) all its resources. 
B) its fixed resources. 
C) its variable resources. 
D) the least costly resources regardless of whether they are fixed or variable. 
E) Firms cannot produce more output in the short run.

Question 9

-The table above has the total product schedule for an imaginary good called a widget.Each unit of labor costs $25 and the total cost of capital is $100.
a∙Use this information to complete the table.In the table, TFC is the total fixed cost, TVC is the total variable cost, TC is the total cost, AFC is the average fixed cost, AVC is the average variable cost, ATC is the average total cost, and MC is the marginal cost.
   
b∙Suppose that labor becomes twice as expensive (so that one unit of labor now costs $50)but nothing else changes.Complete the above table with the new cost schedules.If you plotted the cost curves, how would the increased wage rate affect the cost curves?

Accepted Answer

@#IMG-DLM& 
a∙The completed table is above.All the

Question 10

Economies of scale and diseconomies of scale explain

Accepted Answer

A) cost behavior in the short run. 
B) profit maximization in the long run. 
C) the U-shape of the long-run average cost curve. 
D) the U-shape of the short-run average total cost curve. 
E) the U-shape of the marginal cost curves. 
A) cost behavior in the short run. 
B) profit maximization in the long run. 
C) the U-shape of the long-run average cost curve. 
D) the U-shape of the short-run average total cost curve. 
E) the U-shape of the marginal cost curves.

Question 11

If marginal cost increases when output increases, then

Accepted Answer

A) marginal product must decrease when output increases. 
B) average fixed cost is constant. 
C) total cost is constant. 
D) average variable cost must increase when output increases. 
E) average total cost must decrease when output increases. 
A) marginal product must decrease when output increases. 
B) average fixed cost is constant. 
C) total cost is constant. 
D) average variable cost must increase when output increases. 
E) average total cost must decrease when output increases.

Question 12

The production and cost information provided in the table above for Flaming Fernando's, a restaurant that sells Fiery Frijoles, is for the

Accepted Answer

A) short run because there are no variable costs. 
B) short run because there is a fixed cost. 
C) long run because there are no variable costs. 
D) long run because there are no fixed costs. 
E) short run and long run because the total cost increases as production increases. 
A) short run because there are no variable costs. 
B) short run because there is a fixed cost. 
C) long run because there are no variable costs. 
D) long run because there are no fixed costs. 
E) short run and long run because the total cost increases as production increases.

Question 13

Once production has reached the maximum average product of labor, if production increases then

Accepted Answer

A) average fixed cost rises. 
B) total costs decrease. 
C) total product decreases. 
D) decreasing marginal returns occur. 
E) the plant size must be increased. 
A) average fixed cost rises. 
B) total costs decrease. 
C) total product decreases. 
D) decreasing marginal returns occur. 
E) the plant size must be increased.

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

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 16

The short run is the time frame

Accepted Answer

A) during which the quantities of all resources are fixed. 
B) that is less than a year. 
C) during which the quantities of some resources are fixed. 
D) during which the quantities of all resources are variable. 
E) during which all costs are implicit costs. 
A) during which the quantities of all resources are fixed. 
B) that is less than a year. 
C) during which the quantities of some resources are fixed. 
D) during which the quantities of all resources are variable. 
E) during which all costs are implicit costs.

Question 17

When marginal cost is positive, total cost is ________ as output increases.

Accepted Answer

A) increasing 
B) decreasing 
C) constant 
D) negative 
E) undefined 
A) increasing 
B) decreasing 
C) constant 
D) negative 
E) undefined

Question 18

-Paulette owns a pizza parlor.Her total cost schedule is in the above table.Her total variable cost of producing four pizzas per hour is

Accepted Answer

A) $20. 
B) $49. 
C) $51. 
D) $71. 
E) Some amount, but more information is needed to determine this total variable cost. 
A) $20. 
B) $49. 
C) $51. 
D) $71. 
E) Some amount, but more information is needed to determine this total variable cost.

Question 19

Total cost includes

Accepted Answer

A) the cost of variable resources only. 
B) the cost of fixed resources only. 
C) the cost of both variable and fixed resources. 
D) the cost of neither variable nor fixed resources. 
E) all explicit costs and all the implicit costs that actually must be paid using money. 
A) the cost of variable resources only. 
B) the cost of fixed resources only. 
C) the cost of both variable and fixed resources. 
D) the cost of neither variable nor fixed resources. 
E) all explicit costs and all the implicit costs that actually must be paid using money.

Question 20

-The above table shows the total product schedule for Hair Today, a hair styling salon.
a∙What is the first worker's marginal product? The second worker? The third worker? The fourth worker? The fifth worker?
b∙Over what range of workers is there increasing marginal returns? Over what range is there decreasing marginal returns?

Accepted Answer

a∙The first worker's marginal product is

-Paulette owns a pizza parlor.Her total cost schedule is in the above table.Her marginal cost of producing the fifth pizza is

Cost curves shift if I∙technology changes. Ii∙the prices of factors of production change. Iii∙productivity changes.

As a typical firm increases its output, its marginal cost

-The table above shows the total product schedule for Rick's Lawn Service, a yard care company.When the worker is hired, the average product of labor the marginal product of labor.

Which of the following contributes to increasing marginal returns?

Normal profit is

Which of the following is an example of an implicit cost?

To produce more output in the short run, a firm must employ more of

Economies of scale and diseconomies of scale explain

If marginal cost increases when output increases, then

The production and cost information provided in the table above for Flaming Fernando's, a restaurant that sells Fiery Frijoles, is for the

Once production has reached the maximum average product of labor, if production increases then

Which of the following always decreases when output increases?

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

The short run is the time frame

When marginal cost is positive, total cost is ________ as output increases.

-Paulette owns a pizza parlor.Her total cost schedule is in the above table.Her total variable cost of producing four pizzas per hour is

Total cost includes

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

-Paulette owns a pizza parlor.Her total cost schedule is in the above table.Her marginal cost of producing the fifth pizza is

Cost curves shift if I∙technology changes. Ii∙the prices of factors of production change. Iii∙productivity changes.

As a typical firm increases its output, its marginal cost

-The table above shows the total product schedule for Rick's Lawn Service, a yard care company.When the ________ worker is hired, the average product of labor ________ the marginal product of labor.

Which of the following contributes to increasing marginal returns?

Normal profit is

Which of the following is an example of an implicit cost?

To produce more output in the short run, a firm must employ more of

Economies of scale and diseconomies of scale explain

If marginal cost increases when output increases, then

The production and cost information provided in the table above for Flaming Fernando's, a restaurant that sells Fiery Frijoles, is for the

Once production has reached the maximum average product of labor, if production increases then

Which of the following always decreases when output increases?

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

The short run is the time frame

When marginal cost is positive, total cost is ________ as output increases.

-Paulette owns a pizza parlor.Her total cost schedule is in the above table.Her total variable cost of producing four pizzas per hour is

Total cost includes

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

-The table above shows the total product schedule for Rick's Lawn Service, a yard care company.When the worker is hired, the average product of labor the marginal product of labor.