Question 1

In a figure showing the average total cost curve and the average variable cost curve, the vertical distance between the two curves is equal to the

Accepted Answer

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

Question 2

-In the above figure, curve A is the ________ curve and curve C is the ________ curve.

Accepted Answer

A) total variable cost; total fixed cost 
B) total cost; total fixed cost 
C) total fixed cost; total variable cost 
D) total cost; total variable cost 
E) total variable cost; total cost 
A) total variable cost; total fixed cost 
B) total cost; total fixed cost 
C) total fixed cost; total variable cost 
D) total cost; total variable cost 
E) total variable cost; total cost

Question 3

Economic profit equals total revenue minus total

Accepted Answer

A) explicit costs. 
B) opportunity costs. 
C) implicit costs. 
D) accounting costs. 
E) entrepreneur's costs. 
A) explicit costs. 
B) opportunity costs. 
C) implicit costs. 
D) accounting costs. 
E) entrepreneur's costs.

Question 4

Average total cost is equal to

Accepted Answer

A) average fixed cost + average variable cost. 
B) total cost ÷ quantity. 
C) the change in total cost when output changes by one unit. 
D) Answers A and B are correct. 
E) Answers A and C are correct. 
A) average fixed cost + average variable cost. 
B) total cost ÷ quantity. 
C) the change in total cost when output changes by one unit. 
D) Answers A and B are correct. 
E) Answers A and C are correct.

Question 5

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

Accepted Answer

A) $600. 
B) $6.00. 
C) $7.50. 
D) $10.00. 
E) $2,400. 
A) $600. 
B) $6.00. 
C) $7.50. 
D) $10.00. 
E) $2,400.

Question 6

-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 t

Question 7

$$\begin{array} { c c } 
\begin{array} { c } 
\text { Output } \
\text { (pizzas per hour) }
\end{array} & \begin{array} { c } 
\text { Total cost } \
\text { (dollars) }
\end{array} \
\hline 0 & 20 \
1 & 35 \
2 & 49 \
3 & 61 \
4 & 71 \
5 & 79 \
6 & 85
\end{array}$$
-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 8

"If the marginal product of labor curve slopes downward, then the average product of labor curve necessarily must slope downward." Explain whether the previous statement is correct or incorrect?

Accepted Answer

The statement is incorrect. The relation

Question 9

Decreasing marginal returns occur in the short run as more labor is hired to work in a fixed sized plant because

Accepted Answer

A) less efficient and less productive workers are hired. 
B) adding more workers exhausts the possible gains from specialization. 
C) the entrepreneur does not know how to manage more workers. 
D) each worker will produce more than the worker previously hired. 
E) the plant becomes less specialized. 
A) less efficient and less productive workers are hired. 
B) adding more workers exhausts the possible gains from specialization. 
C) the entrepreneur does not know how to manage more workers. 
D) each worker will produce more than the worker previously hired. 
E) the plant becomes less specialized.

Question 10

A normal profit is

Accepted Answer

A) part of a firm's opportunity cost. 
B) equal to total revenue minus total opportunity cost. 
C) the same as economic profit. 
D) the same as accounting profit. 
E) almost always zero if the company is run efficiently. 
A) part of a firm's opportunity cost. 
B) equal to total revenue minus total opportunity cost. 
C) the same as economic profit. 
D) the same as accounting profit. 
E) almost always zero if the company is run efficiently.

Question 11

$$\begin{array} { c c } 
\begin{array} { c } 
\text { Quantity of labor } \
\text { (workers) }
\end{array} & \begin{array} { c } 
\text { Total product } \
\text { (lawns mowed per week) }
\end{array} \
\hline 0 & 0 \
1 & 30 \
2 & 55 \
3 & 75 \
4 & 80 \
5 & 82
\end{array}$$
-Kenya owns a lawn mowing company. His total product schedule is in the above table. When 4 workers are employed, the average product is ________ lawns mowed per week.

Accepted Answer

A) 80 
B) 25 
C) 20 
D) 5 
E) 320 
A) 80 
B) 25 
C) 20 
D) 5 
E) 320

Question 12

The total variable cost curve ________ because ________ as output increases.

Accepted Answer

A) slopes upward; variable cost increases 
B) slopes upward; marginal cost increases 
C) slopes downward; variable cost increases 
D) slopes downward; marginal cost increases 
E) is horizontal; fixed cost does not change 
A) slopes upward; variable cost increases 
B) slopes upward; marginal cost increases 
C) slopes downward; variable cost increases 
D) slopes downward; marginal cost increases 
E) is horizontal; fixed cost does not change

Question 13

To produce 10 shirts, the total cost is $80; to produce 11 shirts, the total cost is $99. The average total cost of the 11th shirt is equal to

Accepted Answer

A) $8. 
B) $9. 
C) $80. 
D) $99. 
E) $19. 
A) $8. 
B) $9. 
C) $80. 
D) $99. 
E) $19.

Question 14

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 15

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

Accepted Answer

A normal profit is the return to entrepr

Question 16

Which of the following is FALSE?

Accepted Answer

A) Long-run average variable costs equal long-run average total costs. 
B) Fixed costs increase in the long run. 
C) As a firm produces more output, eventually it experiences diseconomies of scale. 
D) In the long run, both the amount of capital and labor used by the firm can be changed. 
E) In the long run, the firm has no fixed inputs. 
A) Long-run average variable costs equal long-run average total costs. 
B) Fixed costs increase in the long run. 
C) As a firm produces more output, eventually it experiences diseconomies of scale. 
D) In the long run, both the amount of capital and labor used by the firm can be changed. 
E) In the long run, the firm has no fixed inputs.

Question 17

$$\begin{array} { c c } 
\begin{array} { c } 
\text { Labor } \
\text { (workers) }
\end{array} & \text { Output } \
\hline 0 & 0 \
1 & 20 \
2 & 50 \
3 & 70 \
4 & 80 \
5 & 85
\end{array}$$
-The table above shows a total product schedule. Suppose that labor costs $20 per worker and fixed costs are $60. The total variable cost of producing 80 units equals

Accepted Answer

A) less than $50. 
B) more that $50 and less than $70. 
C) more than $70 and less than $90. 
D) more than $90 and less than $120. 
E) more than $120. 
A) less than $50. 
B) more that $50 and less than $70. 
C) more than $70 and less than $90. 
D) more than $90 and less than $120. 
E) more than $120.

Question 18

In the long run, if 1,000 units are produced at a cost of $8,000 and 1,200 units at a cost of $9,200, then over this range of output there are

Accepted Answer

A) constant economies of scale. 
B) constant returns to scale. 
C) diseconomies of scale. 
D) economies of scale. 
E) constant diseconomies of scale. 
A) constant economies of scale. 
B) constant returns to scale. 
C) diseconomies of scale. 
D) economies of scale. 
E) constant diseconomies of scale.

Question 19

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 20

The figure above shows some of a firm's cost curves.
-Based on the figure above, curve A is the firm's

Accepted Answer

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

In a figure showing the average total cost curve and the average variable cost curve, the vertical distance between the two curves is equal to the

-In the above figure, curve A is the curve and curve C is the curve.

Economic profit equals total revenue minus total

Average total cost is equal to

Output (pizzas per hour) Total cost (dollars) 0 20 1 35 2 49 3 61 4 71 5 79 6 85 -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

"If the marginal product of labor curve slopes downward, then the average product of labor curve necessarily must slope downward." Explain whether the previous statement is correct or incorrect?

Decreasing marginal returns occur in the short run as more labor is hired to work in a fixed sized plant because

A normal profit is

Quantity of labor (workers) Total product (lawns mowed per week) 0 0 1 30 2 55 3 75 4 80 5 82 -Kenya owns a lawn mowing company. His total product schedule is in the above table. When 4 workers are employed, the average product is ________ lawns mowed per week.

The total variable cost curve because as output increases.

To produce 10 shirts, the total cost is $80; to produce 11 shirts, the total cost is $99. The average total cost of the 11th shirt is equal to

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

Which of the following is FALSE?

Labor (workers) Output 0 0 1 20 2 50 3 70 4 80 5 85 -The table above shows a total product schedule. Suppose that labor costs $20 per worker and fixed costs are $60. The total variable cost of producing 80 units equals

In the long run, if 1,000 units are produced at a cost of $8,000 and 1,200 units at a cost of $9,200, then over this range of output there are

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

The figure above shows some of a firm's cost curves. -Based on the figure above, curve A is the firm's

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

In a figure showing the average total cost curve and the average variable cost curve, the vertical distance between the two curves is equal to the

-In the above figure, curve A is the ________ curve and curve C is the ________ curve.

Economic profit equals total revenue minus total

Average total cost is equal to

Output (pizzas per hour) Total cost (dollars) 0 20 1 35 2 49 3 61 4 71 5 79 6 85 -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

"If the marginal product of labor curve slopes downward, then the average product of labor curve necessarily must slope downward." Explain whether the previous statement is correct or incorrect?

Decreasing marginal returns occur in the short run as more labor is hired to work in a fixed sized plant because

A normal profit is

Quantity of labor (workers) Total product (lawns mowed per week) 0 0 1 30 2 55 3 75 4 80 5 82 -Kenya owns a lawn mowing company. His total product schedule is in the above table. When 4 workers are employed, the average product is ________ lawns mowed per week.

The total variable cost curve ________ because ________ as output increases.

To produce 10 shirts, the total cost is $80; to produce 11 shirts, the total cost is $99. The average total cost of the 11th shirt is equal to

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

Which of the following is FALSE?

Labor (workers) Output 0 0 1 20 2 50 3 70 4 80 5 85 -The table above shows a total product schedule. Suppose that labor costs $20 per worker and fixed costs are $60. The total variable cost of producing 80 units equals

In the long run, if 1,000 units are produced at a cost of $8,000 and 1,200 units at a cost of $9,200, then over this range of output there are

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

The figure above shows some of a firm's cost curves. -Based on the figure above, curve A is the firm's

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

-In the above figure, curve A is the curve and curve C is the curve.

The total variable cost curve because as output increases.