Question 1

The marginal cost curve is U-shaped. Over the range of output for which the marginal cost is falling as output increases, the marginal product is

Accepted Answer

A) increasing. 
B) decreasing. 
C) constant. 
D) probably changing, but there is no stable relationship between the marginal cost and the marginal product. 
E) not defined. 
A) increasing. 
B) decreasing. 
C) constant. 
D) probably changing, but there is no stable relationship between the marginal cost and the marginal product. 
E) not defined.

Question 2

-The above figure represents the average total cost curves of a wheat farmer.
a. Which average total cost curve has the lowest average total cost of producing 30,000 bushels of wheat?
b. Over what range of output is the farmer experiencing economies of scale?
c. Over what range of output is the farmer experiencing diseconomies of scale?
d. Which average total cost curve has the lowest possible average cost of production?
e. Which average total cost curve represents the largest plant?

Accepted Answer

a. ATC₃ has the lowest average total cos

Question 3

$$\begin{array} { c c } 
\begin{array} { c } 
\text { Quantity of labor } \
\text { (workers) }
\end{array} & \begin{array} { c } 
\text { Total product } \
\text { (dogs groomed per week) }
\end{array} \
\hline 0 & 0 \
1 & 40 \
2 & 100 \
3 & 150 \
4 & 190 \
5 & 220 \
6 & 240
\end{array}$$
-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 total cost equals

Accepted Answer

A) $2,400. 
B) $300. 
C) $7.50. 
D) $10.00. 
E) $1,800. 
A) $2,400. 
B) $300. 
C) $7.50. 
D) $10.00. 
E) $1,800.

Question 4

The total product is 10 units. The average total cost is $30 and the average fixed cost is $10. What is the amount of the total variable cost?

Accepted Answer

A) $20 
B) $200 
C) $300 
D) $10 
E) It is impossible to determine with the information given. 
A) $20 
B) $200 
C) $300 
D) $10 
E) It is impossible to determine with the information given.

Question 5

Which of the following is an implicit cost in Jim's business venture?
I. the salary Jim could have earned at another job
Ii. the interest Jim must pay on the loan he incurred to help open his business
Iii. the interest Jim lost when he used his savings to help open his business

Accepted Answer

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

Question 6

Are the short-run average total cost curve and the long-run average cost both U-shaped for the same reasons?
 If so, carefully explain these reasons. If not, explain why each curve is U-shaped.

Accepted Answer

The curves are U-shaped for quite differ

Question 7

Which of the following is true?

Accepted Answer

A) Profit as calculated by accountants and economic profit are not necessarily equal. 
B) Profit as calculated by accountants is always smaller than economic profit. 
C) Economic profit ignores implicit costs. 
D) The Internal Revenue Service taxes the firm's economic profit but not its normal profit. 
E) The Internal Revenue Service taxes the firm's normal profit but not its economic profit. 
A) Profit as calculated by accountants and economic profit are not necessarily equal. 
B) Profit as calculated by accountants is always smaller than economic profit. 
C) Economic profit ignores implicit costs. 
D) The Internal Revenue Service taxes the firm's economic profit but not its normal profit. 
E) The Internal Revenue Service taxes the firm's normal profit but not its economic profit.

Question 8

Increasing marginal returns always occurs when the

Accepted Answer

A) marginal product of an additional worker exceeds the marginal product of the previous worker. 
B) average product of an additional worker exceeds the average product of the previous worker. 
C) marginal product of an additional worker is less than the marginal product of the previous worker. 
D) average product of an additional worker is less than the average product of the previous worker. 
E) marginal product of an additional worker exceeds the average product of the previous worker. 
A) marginal product of an additional worker exceeds the marginal product of the previous worker. 
B) average product of an additional worker exceeds the average product of the previous worker. 
C) marginal product of an additional worker is less than the marginal product of the previous worker. 
D) average product of an additional worker is less than the average product of the previous worker. 
E) marginal product of an additional worker exceeds the average product of the previous worker.

Question 9

$$\begin{array} { c c } 
\begin{array} { c } 
\text { Quantity of labor } \
\text { (workers) }
\end{array} & \begin{array} { c } 
\text { Total product } \
\text { (dogs groomed per week) }
\end{array} \
\hline 0 & 0 \
1 & 40 \
2 & 100 \
3 & 150 \
4 & 190 \
5 & 220 \
6 & 240
\end{array}$$
-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 2 workers, her average variable cost equals

Accepted Answer

A) $2,400. 
B) $300. 
C) $6.00. 
D) $10.00. 
E) $600. 
A) $2,400. 
B) $300. 
C) $6.00. 
D) $10.00. 
E) $600.

Question 10

If another worker is hired with a marginal product greater than the previously hired worker, which of the following will be true?

Accepted Answer

A) total costs will decrease 
B) fixed costs will decrease 
C) marginal cost will increase 
D) marginal cost will decrease 
E) average fixed costs will increase 
A) total costs will decrease 
B) fixed costs will decrease 
C) marginal cost will increase 
D) marginal cost will decrease 
E) average fixed costs will increase

Question 11

The figure above shows a firm's average total cost and marginal cost curves.
-Based on the figure above, the firm's marginal product curve slopes upward at levels of output between ________ and the firm's average product curve slopes upward at levels of output between ________.

Accepted Answer

A) 4.0 and 7.0; 4.0 and 7.0 
B) 0 and 7.0; 4.0 and 7.0 
C) 4.0 and 7.0; 0 and 4.0 
D) 0 and 4.0; 0 and 7.0 
E) More information is needed to answer the question. 
A) 4.0 and 7.0; 4.0 and 7.0 
B) 0 and 7.0; 4.0 and 7.0 
C) 4.0 and 7.0; 0 and 4.0 
D) 0 and 4.0; 0 and 7.0 
E) More information is needed to answer the question.

Question 12

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

Accepted Answer

A) wages paid to employees 
B) interest paid to a bank on a building loan 
C) the cost of using capital an owner donates to the business 
D) dollars paid to a supplier for materials used in production 
E) liability insurance payments made only once a year 
A) wages paid to employees 
B) interest paid to a bank on a building loan 
C) the cost of using capital an owner donates to the business 
D) dollars paid to a supplier for materials used in production 
E) liability insurance payments made only once a year

Question 13

$$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Labor } \
\text { (workers) }
\end{array} & \begin{array} { c } 
\text { Output } \
\text { (frijoles) }
\end{array} & \begin{array} { c } 
\text { Total cost } \
\text { (dollars) }
\end{array} \
\hline 0 & 0 & 1,000 \
\hline 5 & 1,000 & 3,000 \
\hline 10 & 3,000 & 5,000 \
\hline 15 & 4,000 & 7,000 \
\hline 20 & 4,500 & 9,000 \
\hline
\end{array}$$
-The above table gives some production and cost information for Flaming Fernando's, a restaurant that sells Fiery Frijoles. Between what two levels of output does the marginal cost of producing Fiery Frijoles first begin to rise?

Accepted Answer

A) 0 and 1000 
B) 1000 and 3000 
C) 3000 and 4000 
D) 4000 and 4500 
E) None of the above answers are correct. 
A) 0 and 1000 
B) 1000 and 3000 
C) 3000 and 4000 
D) 4000 and 4500 
E) None of the above answers are correct.

Question 14

Which of the following is a list of fixed inputs for a hospital?

Accepted Answer

A) bandages, casts, and other materials 
B) antibiotics, pain medication, and other prescription drugs 
C) the emergency room, intensive care unit, and other facilities 
D) the nurses, receptionists, and other employees 
E) the lobby, the doctors, and the electricity it uses 
A) bandages, casts, and other materials 
B) antibiotics, pain medication, and other prescription drugs 
C) the emergency room, intensive care unit, and other facilities 
D) the nurses, receptionists, and other employees 
E) the lobby, the doctors, and the electricity it uses

Question 15

Average total cost equals

Accepted Answer

A) the change in total cost divided by the change in output. 
B) total fixed cost divided by output. 
C) average fixed cost plus average variable cost. 
D) total cost minus total variable cost. 
E) average fixed cost plus average variable cost plus marginal cost. 
A) the change in total cost divided by the change in output. 
B) total fixed cost divided by output. 
C) average fixed cost plus average variable cost. 
D) total cost minus total variable cost. 
E) average fixed cost plus average variable cost plus marginal cost.

Question 16

If a business owner decided to expand her business but rather than borrowing money from a bank used her own funds, then

Accepted Answer

A) she would be unable to earn a normal profit. 
B) there is no cost associated with the expansion. 
C) she would forego the opportunity to earn interest on the money. 
D) the amount of her funds she used is an explicit cost. 
E) the amount of her funds she used is part of her normal profit. 
A) she would be unable to earn a normal profit. 
B) there is no cost associated with the expansion. 
C) she would forego the opportunity to earn interest on the money. 
D) the amount of her funds she used is an explicit cost. 
E) the amount of her funds she used is part of her normal profit.

Question 17

Draw an average total cost curve, an average variable cost, and a marginal cost curve all on the same graph. Make sure to correctly label the axes. What relationship must exist between the marginal cost curve and the average total cost and average variable cost curves?

Accepted Answer

@#IMG-DLM& Typical cost curves are above. The aver

Question 18

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

Accepted Answer

The long run is defined as the time fram

Question 19

Jake is a corn farmer in Nebraska. He rents his land on a long-term lease for $250,000 a year. He pays his farm hands $128,000 a year. Is his rent a fixed cost or a variable cost?
 Are the wages he pays his workers a fixed cost or a variable cost?
 Briefly explain your answers.

Accepted Answer

Jake's rent is a fixed cost. He is renti

Question 20

When a firm becomes so large it is difficult to coordinate and control, it is most likely that

Accepted Answer

A) economies of scale have begun. 
B) diseconomies of scale have begun. 
C) average total cost begins to fall. 
D) long-run average costs become negative. 
E) there is increasing marginal returns to increasing the firm's plant size. 
A) economies of scale have begun. 
B) diseconomies of scale have begun. 
C) average total cost begins to fall. 
D) long-run average costs become negative. 
E) there is increasing marginal returns to increasing the firm's plant size.

The marginal cost curve is U-shaped. Over the range of output for which the marginal cost is falling as output increases, the marginal product is

The total product is 10 units. The average total cost is $30 and the average fixed cost is $10. What is the amount of the total variable cost?

Which of the following is an implicit cost in Jim's business venture? I. the salary Jim could have earned at another job Ii. the interest Jim must pay on the loan he incurred to help open his business Iii. the interest Jim lost when he used his savings to help open his business

Are the short-run average total cost curve and the long-run average cost both U-shaped for the same reasons? If so, carefully explain these reasons. If not, explain why each curve is U-shaped.

Which of the following is true?

Increasing marginal returns always occurs when the

If another worker is hired with a marginal product greater than the previously hired worker, which of the following will be true?

The figure above shows a firm's average total cost and marginal cost curves. -Based on the figure above, the firm's marginal product curve slopes upward at levels of output between and the firm's average product curve slopes upward at levels of output between .

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

Which of the following is a list of fixed inputs for a hospital?

Average total cost equals

If a business owner decided to expand her business but rather than borrowing money from a bank used her own funds, then

Draw an average total cost curve, an average variable cost, and a marginal cost curve all on the same graph. Make sure to correctly label the axes. What relationship must exist between the marginal cost curve and the average total cost and average variable cost curves?

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

Jake is a corn farmer in Nebraska. He rents his land on a long-term lease for $250,000 a year. He pays his farm hands $128,000 a year. Is his rent a fixed cost or a variable cost? Are the wages he pays his workers a fixed cost or a variable cost? Briefly explain your answers.

When a firm becomes so large it is difficult to coordinate and control, it is most likely that

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Exam 10: Production and Cost

The marginal cost curve is U-shaped. Over the range of output for which the marginal cost is falling as output increases, the marginal product is

The total product is 10 units. The average total cost is $30 and the average fixed cost is $10. What is the amount of the total variable cost?

Which of the following is an implicit cost in Jim's business venture? I. the salary Jim could have earned at another job Ii. the interest Jim must pay on the loan he incurred to help open his business Iii. the interest Jim lost when he used his savings to help open his business

Are the short-run average total cost curve and the long-run average cost both U-shaped for the same reasons? If so, carefully explain these reasons. If not, explain why each curve is U-shaped.

Which of the following is true?

Increasing marginal returns always occurs when the

If another worker is hired with a marginal product greater than the previously hired worker, which of the following will be true?

The figure above shows a firm's average total cost and marginal cost curves. -Based on the figure above, the firm's marginal product curve slopes upward at levels of output between ________ and the firm's average product curve slopes upward at levels of output between ________.

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

Which of the following is a list of fixed inputs for a hospital?

Average total cost equals

If a business owner decided to expand her business but rather than borrowing money from a bank used her own funds, then

Draw an average total cost curve, an average variable cost, and a marginal cost curve all on the same graph. Make sure to correctly label the axes. What relationship must exist between the marginal cost curve and the average total cost and average variable cost curves?

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

Jake is a corn farmer in Nebraska. He rents his land on a long-term lease for $250,000 a year. He pays his farm hands $128,000 a year. Is his rent a fixed cost or a variable cost? Are the wages he pays his workers a fixed cost or a variable cost? Briefly explain your answers.

When a firm becomes so large it is difficult to coordinate and control, it is most likely that

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

The figure above shows a firm's average total cost and marginal cost curves. -Based on the figure above, the firm's marginal product curve slopes upward at levels of output between and the firm's average product curve slopes upward at levels of output between .