Question 1

As we observe the cost curves graph, we see that the

Accepted Answer

A) MC curve intersects the ATC curve at its maximum. 
B) MC curve can not be U-shaped. 
C) ATC curve always has a negative slope. 
D) MC curve intersects the AVC curve and ATC curve at their minimums. 
E) MC constantly falls as output increases. 
A) MC curve intersects the ATC curve at its maximum. 
B) MC curve can not be U-shaped. 
C) ATC curve always has a negative slope. 
D) MC curve intersects the AVC curve and ATC curve at their minimums. 
E) MC constantly falls as output increases.

Question 2

In the short run, firms increase output

Accepted Answer

A) only by increasing the size of their plant. 
B) only by decreasing the size of their plant. 
C) only by increasing the amount of labor used. 
D) only by decreasing the amount of labor used. 
E) either by increasing the amount of labor used or by increasing the size of their plant. 
A) only by increasing the size of their plant. 
B) only by decreasing the size of their plant. 
C) only by increasing the amount of labor used. 
D) only by decreasing the amount of labor used. 
E) either by increasing the amount of labor used or by increasing the size of their plant.

Question 3

A firm's long-run average cost curve shows the ________ average cost at which it is possible to produce each output when the firm has had ________ time to change both its labor force and its plant.

Accepted Answer

A) highest; sufficient 
B) lowest; sufficient 
C) lowest; insufficient 
D) highest; insufficient 
E) average; sufficient 
A) highest; sufficient 
B) lowest; sufficient 
C) lowest; insufficient 
D) highest; insufficient 
E) average; sufficient

Question 4

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 5

Which average cost curves are U-shaped?

Accepted Answer

Both the average total cost an

Question 6

Which curve shows the lowest average total cost at which it is possible to produce each output when the firm has time to change both its labor force and plant size?

Accepted Answer

The long-run average cost curv

Question 7

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 8

Jones Production started business with a small scale plant. Fortunately for Smith, the owner of Jones Production, the business grew rapidly. The table below gives the total costs and the associated output for each year.
a. Complete the table by finding the average cost for each scale.
   
b. Over what range of total product (output)did Jones Production experience economies of scale, constant returns to scale, and diseconomies of scale?

Accepted Answer

@#IMG-DLM& 
a. The completed table is above.
b. Th

Question 9

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 10

The return to entrepreneurship is known as

Accepted Answer

A) economic profit. 
B) normal profit. 
C) opportunity revenue. 
D) normal revenue. 
E) explicit profit. 
A) economic profit. 
B) normal profit. 
C) opportunity revenue. 
D) normal revenue. 
E) explicit profit.

Question 11

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 12

If 25 workers can pick 100 flats of strawberries per hour, then average product is

Accepted Answer

A) 100 flats per hour. 
B) 125 flats per hour. 
C) 75 flats per hour. 
D) 4 flats per hour. 
E) More information is needed about how many flats 24 workers can pick. 
A) 100 flats per hour. 
B) 125 flats per hour. 
C) 75 flats per hour. 
D) 4 flats per hour. 
E) More information is needed about how many flats 24 workers can pick.

Question 13

What is the relationship between the marginal product of labor and the marginal cost?

Accepted Answer

Initially, as each additional unit of la

Question 14

In the short run, total variable cost

Accepted Answer

A) includes the cost of capital. 
B) includes the cost of labor. 
C) includes both the cost of capital and of labor. 
D) does not change when production changes. 
E) is positive when output is zero. 
A) includes the cost of capital. 
B) includes the cost of labor. 
C) includes both the cost of capital and of labor. 
D) does not change when production changes. 
E) is positive when output is zero.

Question 15

When the marginal product of an additional worker is less than the marginal product of the previous worker, there are ________ returns to labor.

Accepted Answer

A) increasing total 
B) decreasing total 
C) increasing marginal 
D) decreasing marginal 
E) constant average 
A) increasing total 
B) decreasing total 
C) increasing marginal 
D) decreasing marginal 
E) constant average

Question 16

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 17

Jennifer owns a pig farm near Salina, Kansas. Last year she earned $39,000 in total revenue while incurring $38,000 in explicit costs. She could have earned $27,000 as a teacher in Salina. These are all her revenue and costs. Therefore Jennifer earned an

Accepted Answer

A) accounting profit of $1,000 but incurred an economic loss of $26,000. 
B) accounting profit of $1,000 but incurred an economic loss of $65,000. 
C) accounting profit of $1,000 but incurred an economic loss of $38,000. 
D) economic profit of $1,000. 
E) None of the above answers is correct. 
A) accounting profit of $1,000 but incurred an economic loss of $26,000. 
B) accounting profit of $1,000 but incurred an economic loss of $65,000. 
C) accounting profit of $1,000 but incurred an economic loss of $38,000. 
D) economic profit of $1,000. 
E) None of the above answers is correct.

Question 18

The marginal product of labor is

Accepted Answer

A) total product divided by labor. 
B) the change in total product divided by the increase in labor. 
C) a measure of labor. 
D) output that does not meet quality specifications. 
E) total product minus the quantity of labor. 
A) total product divided by labor. 
B) the change in total product divided by the increase in labor. 
C) a measure of labor. 
D) output that does not meet quality specifications. 
E) total product minus the quantity of labor.

Question 19

Explain how new technologies, which increase productivity, affect the average variable cost, average total cost, and marginal cost curves.

Accepted Answer

A technological change that increases pr

Question 20

The marginal product of labor is the change in

Accepted Answer

A) total cost from employing one more worker. 
B) total revenue from employing one more worker. 
C) average product from employing one more worker. 
D) total output from employing one more worker. 
E) total output divided by the change in cost from employing one more worker. 
A) total cost from employing one more worker. 
B) total revenue from employing one more worker. 
C) average product from employing one more worker. 
D) total output from employing one more worker. 
E) total output divided by the change in cost from employing one more worker.

As we observe the cost curves graph, we see that the

In the short run, firms increase output

A firm's long-run average cost curve shows the average cost at which it is possible to produce each output when the firm has had time to change both its labor force and its plant.

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

Which average cost curves are U-shaped?

Which curve shows the lowest average total cost at which it is possible to produce each output when the firm has time to change both its labor force and plant size?

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

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

The return to entrepreneurship is known as

Diseconomies of scale is a result of

If 25 workers can pick 100 flats of strawberries per hour, then average product is

What is the relationship between the marginal product of labor and the marginal cost?

In the short run, total variable cost

When the marginal product of an additional worker is less than the marginal product of the previous worker, there are ________ returns to labor.

Marginal cost equals

Jennifer owns a pig farm near Salina, Kansas. Last year she earned $39,000 in total revenue while incurring $38,000 in explicit costs. She could have earned $27,000 as a teacher in Salina. These are all her revenue and costs. Therefore Jennifer earned an

The marginal product of labor is

Explain how new technologies, which increase productivity, affect the average variable cost, average total cost, and marginal cost curves.

The marginal product of labor is the change in

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

As we observe the cost curves graph, we see that the

In the short run, firms increase output

A firm's long-run average cost curve shows the ________ average cost at which it is possible to produce each output when the firm has had ________ time to change both its labor force and its plant.

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

Which average cost curves are U-shaped?

Which curve shows the lowest average total cost at which it is possible to produce each output when the firm has time to change both its labor force and plant size?

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

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

The return to entrepreneurship is known as

Diseconomies of scale is a result of

If 25 workers can pick 100 flats of strawberries per hour, then average product is

What is the relationship between the marginal product of labor and the marginal cost?

In the short run, total variable cost

When the marginal product of an additional worker is less than the marginal product of the previous worker, there are ________ returns to labor.

Marginal cost equals

Jennifer owns a pig farm near Salina, Kansas. Last year she earned $39,000 in total revenue while incurring $38,000 in explicit costs. She could have earned $27,000 as a teacher in Salina. These are all her revenue and costs. Therefore Jennifer earned an

The marginal product of labor is

Explain how new technologies, which increase productivity, affect the average variable cost, average total cost, and marginal cost curves.

The marginal product of labor is the change in

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

A firm's long-run average cost curve shows the average cost at which it is possible to produce each output when the firm has had time to change both its labor force and its plant.