Question 1

Marginal cost equals

Accepted Answer

A) total cost minus total variable cost. 
B) total fixed cost divided by total output. 
C) total variable cost divided by total output. 
D) the change in total cost that results from a one-unit increase in output. 
E) the change in fixed cost that results from a one-unit increase in output. 
A) total cost minus total variable cost. 
B) total fixed cost divided by total output. 
C) total variable cost divided by total output. 
D) the change in total cost that results from a one-unit increase in output. 
E) the change in fixed cost that results from a one-unit increase in output.

Question 2

Acme produces rocket shoes for use by slow coyotes.Acme's total cost schedule is given in the table below.Acme's total fixed cost is $12.Complete the table.(In the table, TFC is the total fixed cost, TVC is the total variable cost, AFC is the average fixed cost, AVC is the average variable cost, and ATC is the average total cost.)

Accepted Answer

@#IMG-DLM& The compl

Question 3

The short run is

Accepted Answer

A) less than one year. 
B) the time frame in which all resources are fixed. 
C) the time frame in which some resources are fixed. 
D) the time frame in which output is fixed. 
E) a time frame short enough so that some costs are explicit costs. 
A) less than one year. 
B) the time frame in which all resources are fixed. 
C) the time frame in which some resources are fixed. 
D) the time frame in which output is fixed. 
E) a time frame short enough so that some costs are explicit costs.

Question 4

Economic depreciation is the

Accepted Answer

A) fall in value of the firm's capital, calculating using IRS rules. 
B) opportunity cost of owning and using the firm's capital, measured as the change in market value. 
C) decrease in the value of finished goods and services that are held in inventories prior to being sold. 
D) term given to a fall in a company's stock price. 
E) name given to how accountants calculate the depreciation of the company's capital. 
A) fall in value of the firm's capital, calculating using IRS rules. 
B) opportunity cost of owning and using the firm's capital, measured as the change in market value. 
C) decrease in the value of finished goods and services that are held in inventories prior to being sold. 
D) term given to a fall in a company's stock price. 
E) name given to how accountants calculate the depreciation of the company's capital.

Question 5

The portion of the long-run average cost curve in which economies of scale are experienced shows that as output increases, the

Accepted Answer

A) average total cost decreases. 
B) average total cost increases. 
C) marginal cost increases. 
D) marginal cost decreases. 
E) average variable cost is constant and the average fixed cost decreases. 
A) average total cost decreases. 
B) average total cost increases. 
C) marginal cost increases. 
D) marginal cost decreases. 
E) average variable cost is constant and the average fixed cost decreases.

Question 6

If Melissa owns a software company that incurs no fixed costs, then

Accepted Answer

A) her total cost equals her total variable cost. 
B) she will earn an economic profit. 
C) her total variable cost is less than her total cost. 
D) her total cost equals zero. 
E) her marginal cost must equal zero. 
A) her total cost equals her total variable cost. 
B) she will earn an economic profit. 
C) her total variable cost is less than her total cost. 
D) her total cost equals zero. 
E) her marginal cost must equal zero.

Question 7

What are diseconomies of scale and why might they occur?

Accepted Answer

Diseconomies of scale are features of th

Question 8

"In the short run, even when output is zero, the firm still has some variable costs it must pay." Is the statement correct or incorrect? Briefly explain your answer.

Accepted Answer

The statement is incorrect.When output i

Question 9

-Anna owns a dog grooming salon in Brunswick, Georgia.The above table has Anna's total product schedule.Anna pays each worker $300 per week and she pays rent of $600 a week for her salon.These are her only costs.When Anna has a staff of 6 workers, her average fixed cost equals

Accepted Answer

A) $600. 
B) $2.50. 
C) $7.50. 
D) $10.00. 
E) $6.00. 
A) $600. 
B) $2.50. 
C) $7.50. 
D) $10.00. 
E) $6.00.

Question 10

Scott owns a law-enforcement training operation in Boise, Idaho.He employs three trainers.The last trainer Scott hired increased Scott's total cost by $466 per week even though the trainer brought in only one new client.Hence Scott's

Accepted Answer

A) total variable cost equals $466. 
B) marginal cost of the last client equals $466. 
C) marginal cost of the last worker equals $233. 
D) total variable cost equals $233. 
E) total fixed cost of the last client equals $466. 
A) total variable cost equals $466. 
B) marginal cost of the last client equals $466. 
C) marginal cost of the last worker equals $233. 
D) total variable cost equals $233. 
E) total fixed cost of the last client equals $466.

Question 11

What does the long-run average cost curve show?

Accepted Answer

A) the interaction between average fixed cost and marginal cost 
B) the lowest average cost to produce each output level in the long run 
C) the distinction between long-run fixed and long-run variable costs 
D) the lowest average marginal cost of producing each output level at any time. 
E) Answers A, B, and C are correct. 
A) the interaction between average fixed cost and marginal cost 
B) the lowest average cost to produce each output level in the long run 
C) the distinction between long-run fixed and long-run variable costs 
D) the lowest average marginal cost of producing each output level at any time. 
E) Answers A, B, and C are correct.

Question 12

The change in cost that results from a one-unit increase in output is called the

Accepted Answer

A) average fixed cost. 
B) per-unit variable cost. 
C) per-unit total cost. 
D) marginal cost. 
E) average cost change. 
A) average fixed cost. 
B) per-unit variable cost. 
C) per-unit total cost. 
D) marginal cost. 
E) average cost change.

Question 13

Diseconomies of scale can occur as a result of which of the following?

Accepted Answer

A) increasing marginal returns as the firm increases its size 
B) lower total fixed cost as the firm increases its size 
C) management difficulties as the firm increases its size 
D) greater specialization of labor and capital as the firm increases its size 
E) increases in the labor force not matched by increases in the plant 
A) increasing marginal returns as the firm increases its size 
B) lower total fixed cost as the firm increases its size 
C) management difficulties as the firm increases its size 
D) greater specialization of labor and capital as the firm increases its size 
E) increases in the labor force not matched by increases in the plant

Question 14

If a firm does not produce any output, its

Accepted Answer

A) total fixed cost must be zero. 
B) economic profit must be positive. 
C) total variable cost must be zero. 
D) total costs must be zero. 
E) marginal cost must be zero. 
A) total fixed cost must be zero. 
B) economic profit must be positive. 
C) total variable cost must be zero. 
D) total costs must be zero. 
E) marginal cost must be zero.

Question 15

The short-run average total cost, average variable cost, and marginal cost curves are all U-shaped because of
I∙constant total fixed cost.
Ii∙increasing and then decreasing marginal returns as more labor is hired.
Iii∙economies and diseconomies of scale as the plant size increases.

Accepted Answer

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

Question 16

One of the major reasons for the U-shaped average total cost curve is the fact that

Accepted Answer

A) there are increasing returns from labor regardless of the number of workers employed. 
B) there eventually are decreasing returns from labor as more workers are employed. 
C) prices fall as output increases. 
D) the average fixed cost increases as more output is produced. 
E) the variable cost decreases as more output is produced. 
A) there are increasing returns from labor regardless of the number of workers employed. 
B) there eventually are decreasing returns from labor as more workers are employed. 
C) prices fall as output increases. 
D) the average fixed cost increases as more output is produced. 
E) the variable cost decreases as more output is produced.

Question 17

When Ford hires Ernst and Young Consulting to help Ford redesign its marketing, Ford's payment to Ernst and Young is classified as

Accepted Answer

A) an explicit cost. 
B) depreciation. 
C) an implicit cost. 
D) normal profit. 
E) economic profit. 
A) an explicit cost. 
B) depreciation. 
C) an implicit cost. 
D) normal profit. 
E) economic profit.

Question 18

Diseconomies of scale is a result of

Accepted Answer

A) mismanagement. 
B) difficulties of coordinating and controlling a large enterprise. 
C) specialization of labor, capital, and management. 
D) technological progress. 
E) larger fixed costs as the firm's production increases. 
A) mismanagement. 
B) difficulties of coordinating and controlling a large enterprise. 
C) specialization of labor, capital, and management. 
D) technological progress. 
E) larger fixed costs as the firm's production increases.

Question 19

This month, the local widget factory produced 100 widgets.The total variable cost of production was $500 and the average total cost of production was $8.
a∙What is the total cost?
b∙What is the total fixed cost?
c∙What is the average fixed cost?
d∙What is the average variable cost?

Accepted Answer

a∙Total cost can be calculated as averag

Question 20

The figure above shows some of a firm's cost curves.
-Curve B is the firm's

Accepted Answer

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

Marginal cost equals

The short run is

Economic depreciation is the

The portion of the long-run average cost curve in which economies of scale are experienced shows that as output increases, the

If Melissa owns a software company that incurs no fixed costs, then

What are diseconomies of scale and why might they occur?

"In the short run, even when output is zero, the firm still has some variable costs it must pay." Is the statement correct or incorrect? Briefly explain your answer.

-Anna owns a dog grooming salon in Brunswick, Georgia.The above table has Anna's total product schedule.Anna pays each worker $300 per week and she pays rent of $600 a week for her salon.These are her only costs.When Anna has a staff of 6 workers, her average fixed cost equals

Scott owns a law-enforcement training operation in Boise, Idaho.He employs three trainers.The last trainer Scott hired increased Scott's total cost by $466 per week even though the trainer brought in only one new client.Hence Scott's

What does the long-run average cost curve show?

The change in cost that results from a one-unit increase in output is called the

Diseconomies of scale can occur as a result of which of the following?

If a firm does not produce any output, its

The short-run average total cost, average variable cost, and marginal cost curves are all U-shaped because of I∙constant total fixed cost. Ii∙increasing and then decreasing marginal returns as more labor is hired. Iii∙economies and diseconomies of scale as the plant size increases.

One of the major reasons for the U-shaped average total cost curve is the fact that

When Ford hires Ernst and Young Consulting to help Ford redesign its marketing, Ford's payment to Ernst and Young is classified as

Diseconomies of scale is a result of

This month, the local widget factory produced 100 widgets.The total variable cost of production was $500 and the average total cost of production was $8. a∙What is the total cost? b∙What is the total fixed cost? c∙What is the average fixed cost? d∙What is the average variable cost?

The figure above shows some of a firm's cost curves. -Curve B is the firm'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

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Exam 14: Production and Cost

Marginal cost equals

The short run is

Economic depreciation is the

The portion of the long-run average cost curve in which economies of scale are experienced shows that as output increases, the

If Melissa owns a software company that incurs no fixed costs, then

What are diseconomies of scale and why might they occur?

"In the short run, even when output is zero, the firm still has some variable costs it must pay." Is the statement correct or incorrect? Briefly explain your answer.

-Anna owns a dog grooming salon in Brunswick, Georgia.The above table has Anna's total product schedule.Anna pays each worker $300 per week and she pays rent of $600 a week for her salon.These are her only costs.When Anna has a staff of 6 workers, her average fixed cost equals

Scott owns a law-enforcement training operation in Boise, Idaho.He employs three trainers.The last trainer Scott hired increased Scott's total cost by $466 per week even though the trainer brought in only one new client.Hence Scott's

What does the long-run average cost curve show?

The change in cost that results from a one-unit increase in output is called the

Diseconomies of scale can occur as a result of which of the following?

If a firm does not produce any output, its

The short-run average total cost, average variable cost, and marginal cost curves are all U-shaped because of I∙constant total fixed cost. Ii∙increasing and then decreasing marginal returns as more labor is hired. Iii∙economies and diseconomies of scale as the plant size increases.

One of the major reasons for the U-shaped average total cost curve is the fact that

When Ford hires Ernst and Young Consulting to help Ford redesign its marketing, Ford's payment to Ernst and Young is classified as

Diseconomies of scale is a result of

This month, the local widget factory produced 100 widgets.The total variable cost of production was $500 and the average total cost of production was $8. a∙What is the total cost? b∙What is the total fixed cost? c∙What is the average fixed cost? d∙What is the average variable cost?

The figure above shows some of a firm's cost curves. -Curve B is the firm'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