Question 1

The long-run average cost curve

Accepted Answer

A) is an upside down U-shape. 
B) is constructed using the short-run marginal cost curves. 
C) shows economies and diseconomies of scale. 
D) Both answers A and B are correct. 
E) Both answers A and C are correct. 
A) is an upside down U-shape. 
B) is constructed using the short-run marginal cost curves. 
C) shows economies and diseconomies of scale. 
D) Both answers A and B are correct. 
E) Both answers A and C are correct.

Question 2

In the long run,

Accepted Answer

A) some resources are fixed. 
B) all resources are variable. 
C) output cannot be varied. 
D) all resources are fixed. 
E) Both answers B and C are correct. 
A) some resources are fixed. 
B) all resources are variable. 
C) output cannot be varied. 
D) all resources are fixed. 
E) Both answers B and C are correct.

Question 3

-The table above table shows

Accepted Answer

A) a total product schedule. 
B) the market for labor. 
C) a production possibility frontier. 
D) a supply schedule. 
E) a demand for labor schedule. 
A) a total product schedule. 
B) the market for labor. 
C) a production possibility frontier. 
D) a supply schedule. 
E) a demand for labor schedule.

Question 4

Costs paid in money to hire a resource is

Accepted Answer

A) normal profit. 
B) an implicit cost. 
C) an explicit cost. 
D) an alternative-use cost. 
E) economic profit. 
A) normal profit. 
B) an implicit cost. 
C) an explicit cost. 
D) an alternative-use cost. 
E) economic profit.

Question 5

-The Jerry-Berry Ice Cream Shoppe's total cost schedule is in the above table.Based on the table, which of the following is correct?

Accepted Answer

A) The total fixed cost is $1. 
B) The average fixed cost of 1 gallon is $1.00. 
C) The average variable cost of 2 gallons of ice cream is $1.00 per gallon. 
D) Only answers A and B are correct. 
E) Answers A, B, and C are correct. 
A) The total fixed cost is $1. 
B) The average fixed cost of 1 gallon is $1.00. 
C) The average variable cost of 2 gallons of ice cream is $1.00 per gallon. 
D) Only answers A and B are correct. 
E) Answers A, B, and C are correct.

Question 6

What is the difference between a normal profit and an economic profit?

Accepted Answer

A normal profit is the return to entrepr

Question 7

-The table above shows the total product schedule for Rick's Lawn Service, a yard care company.The total product schedule shows

Accepted Answer

A) increasing marginal returns when the 6th worker is hired. 
B) decreasing marginal returns when the 1st worker is hired. 
C) first increasing and then decreasing marginal returns. 
D) output first increases then increases. 
E) only decreasing marginal returns. 
A) increasing marginal returns when the 6th worker is hired. 
B) decreasing marginal returns when the 1st worker is hired. 
C) first increasing and then decreasing marginal returns. 
D) output first increases then increases. 
E) only decreasing marginal returns.

Question 8

The long run is a time period in which

Accepted Answer

A) some of the firm's resources are fixed. 
B) all of the firm's resources are fixed. 
C) all of the firm's resources are variable. 
D) the firm cannot increase its output. 
E) all costs become explicit costs. 
A) some of the firm's resources are fixed. 
B) all of the firm's resources are fixed. 
C) all of the firm's resources are variable. 
D) the firm cannot increase its output. 
E) all costs become explicit costs.

Question 9

When the average product is at its maximum,

Accepted Answer

A) the marginal product is increasing as output increases. 
B) the marginal product is negative. 
C) it is equal to the marginal product. 
D) total product is also at its maximum. 
E) total product is at its minimum. 
A) the marginal product is increasing as output increases. 
B) the marginal product is negative. 
C) it is equal to the marginal product. 
D) total product is also at its maximum. 
E) total product is at its minimum.

Question 10

The long run is defined as

Accepted Answer

A) any time after six months. 
B) any time after one year. 
C) the period of time when all resources are fixed. 
D) the period of time when most (more than 50 percent)resources are variable. 
E) the period of time when all resources are variable. 
A) any time after six months. 
B) any time after one year. 
C) the period of time when all resources are fixed. 
D) the period of time when most (more than 50 percent)resources are variable. 
E) the period of time when all resources are variable.

Question 11

-Paulette owns a pizza parlor.Her total cost schedule is in the above table.Her total fixed cost is equal to

Accepted Answer

A) $20. 
B) $35. 
C) $79. 
D) $85. 
E) Some amount, but more information is needed to determine her fixed cost. 
A) $20. 
B) $35. 
C) $79. 
D) $85. 
E) Some amount, but more information is needed to determine her fixed cost.

Question 12

An increase in the price of labor (a variable resource)shifts

Accepted Answer

A) all cost curves upward. 
B) the variable cost curves upward but leaves the fixed cost curves unchanged. 
C) the fixed cost curves upward but leaves the variable cost curves unchanged. 
D) the marginal cost curve rightward. 
E) none of the cost curves. 
A) all cost curves upward. 
B) the variable cost curves upward but leaves the fixed cost curves unchanged. 
C) the fixed cost curves upward but leaves the variable cost curves unchanged. 
D) the marginal cost curve rightward. 
E) none of the cost curves.

Question 13

The vertical distance between the total cost curve and the total variable cost curve ________ as output increases and the vertical distance between the average total cost curve and average variable cost curve ________ as output increases.

Accepted Answer

A) is constant; decreases 
B) decreases; is constant 
C) increases; decreases 
D) decreases; increases 
E) decreases; decreases 
A) is constant; decreases 
B) decreases; is constant 
C) increases; decreases 
D) decreases; increases 
E) decreases; decreases

Question 14

Marginal cost

Accepted Answer

A) is the difference between total cost and total fixed cost. 
B) increases as the marginal product of labor increases. 
C) decreases as the average product of labor increases. 
D) is the change in total cost arising from a one-unit increase in output. 
E) equals the change in variable cost divided by the change in fixed cost when output increases by one unit. 
A) is the difference between total cost and total fixed cost. 
B) increases as the marginal product of labor increases. 
C) decreases as the average product of labor increases. 
D) is the change in total cost arising from a one-unit increase in output. 
E) equals the change in variable cost divided by the change in fixed cost when output increases by one unit.

Question 15

A cost incurred in the production of a good or service and for which the firm does not need to make a direct monetary payment, is referred to as ________ cost.

Accepted Answer

A) a minimized 
B) a maximized 
C) an explicit 
D) an implicit 
E) an invisible 
A) a minimized 
B) a maximized 
C) an explicit 
D) an implicit 
E) an invisible

Question 16

Chuck owns a factory that produces leather footballs.His total fixed cost equaled $86,000 last year.His total cost equaled $286,000 last year.Hence Chuck's

Accepted Answer

A) total variable cost was zero. 
B) incurred an economic loss. 
C) total variable cost equaled $200,000. 
D) total variable cost equaled $372,000. 
E) None of the above answers is correct. 
A) total variable cost was zero. 
B) incurred an economic loss. 
C) total variable cost equaled $200,000. 
D) total variable cost equaled $372,000. 
E) None of the above answers is correct.

Question 17

If 9 workers can produce 1,550 units of output and 10 workers can produce 1,700 units of output, then the average product of 10 workers is

Accepted Answer

A) 1,700 units. 
B) 1,550 units. 
C) 170 units. 
D) 150 units. 
E) 155 units. 
A) 1,700 units. 
B) 1,550 units. 
C) 170 units. 
D) 150 units. 
E) 155 units.

Question 18

Total fixed cost is the cost of

Accepted Answer

A) labor. 
B) production. 
C) a firm's fixed factors of production. 
D) only implicit factors of production. 
E) only explicit factors of production. 
A) labor. 
B) production. 
C) a firm's fixed factors of production. 
D) only implicit factors of production. 
E) only explicit factors of production.

Question 19

In the long run all costs are variable costs.Why?

Accepted Answer

The long run is defined as the time fram

Question 20

An insurance agent rents a building and has a three-year lease.An increase in the rent for the building increases the agent's

Accepted Answer

A) total cost and average variable cost. 
B) total variable cost and average variable cost. 
C) total fixed cost and total variable cost. 
D) total fixed cost and average fixed cost. 
E) total variable cost and total cost. 
A) total cost and average variable cost. 
B) total variable cost and average variable cost. 
C) total fixed cost and total variable cost. 
D) total fixed cost and average fixed cost. 
E) total variable cost and total cost.

The long-run average cost curve

In the long run,

-The table above table shows

Costs paid in money to hire a resource is

-The Jerry-Berry Ice Cream Shoppe's total cost schedule is in the above table.Based on the table, which of the following is correct?

What is the difference between a normal profit and an economic profit?

-The table above shows the total product schedule for Rick's Lawn Service, a yard care company.The total product schedule shows

The long run is a time period in which

When the average product is at its maximum,

The long run is defined as

-Paulette owns a pizza parlor.Her total cost schedule is in the above table.Her total fixed cost is equal to

An increase in the price of labor (a variable resource)shifts

The vertical distance between the total cost curve and the total variable cost curve as output increases and the vertical distance between the average total cost curve and average variable cost curve as output increases.

Marginal cost

A cost incurred in the production of a good or service and for which the firm does not need to make a direct monetary payment, is referred to as ________ cost.

Chuck owns a factory that produces leather footballs.His total fixed cost equaled $86,000 last year.His total cost equaled $286,000 last year.Hence Chuck's

If 9 workers can produce 1,550 units of output and 10 workers can produce 1,700 units of output, then the average product of 10 workers is

Total fixed cost is the cost of

In the long run all costs are variable costs.Why?

An insurance agent rents a building and has a three-year lease.An increase in the rent for the building increases the agent's

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

The long-run average cost curve

In the long run,

-The table above table shows

Costs paid in money to hire a resource is

-The Jerry-Berry Ice Cream Shoppe's total cost schedule is in the above table.Based on the table, which of the following is correct?

What is the difference between a normal profit and an economic profit?

-The table above shows the total product schedule for Rick's Lawn Service, a yard care company.The total product schedule shows

The long run is a time period in which

When the average product is at its maximum,

The long run is defined as

-Paulette owns a pizza parlor.Her total cost schedule is in the above table.Her total fixed cost is equal to

An increase in the price of labor (a variable resource)shifts

The vertical distance between the total cost curve and the total variable cost curve ________ as output increases and the vertical distance between the average total cost curve and average variable cost curve ________ as output increases.

Marginal cost

A cost incurred in the production of a good or service and for which the firm does not need to make a direct monetary payment, is referred to as ________ cost.

Chuck owns a factory that produces leather footballs.His total fixed cost equaled $86,000 last year.His total cost equaled $286,000 last year.Hence Chuck's

If 9 workers can produce 1,550 units of output and 10 workers can produce 1,700 units of output, then the average product of 10 workers is

Total fixed cost is the cost of

In the long run all costs are variable costs.Why?

An insurance agent rents a building and has a three-year lease.An increase in the rent for the building increases the agent's

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 vertical distance between the total cost curve and the total variable cost curve as output increases and the vertical distance between the average total cost curve and average variable cost curve as output increases.