Question 1

All of the following are possible reasons for diseconomies of scale EXCEPT

Accepted Answer

A)  bureaucratic inefficiency. 
B)  a top-heavy management structure. 
C)  indivisible inputs. 
D)  All of the above are possible reasons for diseconomies of scale. 
A)  bureaucratic inefficiency. 
B)  a top-heavy management structure. 
C)  indivisible inputs. 
D)  All of the above are possible reasons for diseconomies of scale.

Question 2

-Refer to Figure 8.8.Curve 2 is Outdoor Equipment's

Accepted Answer

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

Question 3

A firm's long run marginal cost is

Accepted Answer

A)  the change in long-run cost resulting from producing one more unit of output. 
B)  the change in long-run fixed cost resulting from producing one more unit of output. 
C)  the change in long-run variable cost resulting from producing one more unit of output. 
D)  none of the above 
A)  the change in long-run cost resulting from producing one more unit of output. 
B)  the change in long-run fixed cost resulting from producing one more unit of output. 
C)  the change in long-run variable cost resulting from producing one more unit of output. 
D)  none of the above

Question 4

Raphael's Salon has $5,000 in fixed costs and $15,000 in variable costs monthly.Raphael's Salon performs 1,500 haircuts per month.What is the average total cost for Raphael's Salon?

Accepted Answer

A)  $0.075 
B)  $7.00 
C)  $8.00 
D)  $13.33 
A)  $0.075 
B)  $7.00 
C)  $8.00 
D)  $13.33

Question 5

Suppose that a donut shop has $1,500 of variable costs and $2,500 of fixed costs when it produces 1,000 donuts and sells them for $1 per donut.Average total cost is equal to

Accepted Answer

A)  $1.50. 
B)  $2.00. 
C)  $4.00. 
D)  $25.00. 
A)  $1.50. 
B)  $2.00. 
C)  $4.00. 
D)  $25.00.

Question 6

-Refer to Figure 8.8.Curve 3 is Outdoor Equipment's

Accepted Answer

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

Question 7

Table 8.5
-Refer to Table 8.5.If Sherry produces five pair of earrings,her total costs are

Accepted Answer

A)  $320. 
B)  $360. 
C)  $370. 
D)  $400. 
A)  $320. 
B)  $360. 
C)  $370. 
D)  $400.

Question 8

If marginal product is negative,then

Accepted Answer

A)  total product will decrease if more of the input is hired. 
B)  total product is equal to zero. 
C)  marginal product will increase if more of the input is hired. 
D)  average product will increase if more of the input is hired. 
A)  total product will decrease if more of the input is hired. 
B)  total product is equal to zero. 
C)  marginal product will increase if more of the input is hired. 
D)  average product will increase if more of the input is hired.

Question 9

Suppose that at Jones & Smith Shoe Factory,the marginal cost of making a pair of shoes is $15 and average variable cost is $15.For the next pair of shoes produced marginal cost will be ________ $15 and average variable cost will be ________ $15.

Accepted Answer

A)  greater than; less than 
B)  less than; greater than 
C)  less than; less than 
D)  greater than; greater than 
A)  greater than; less than 
B)  less than; greater than 
C)  less than; less than 
D)  greater than; greater than

Question 10

If a firm's production process exhibits diseconomies of scale for all levels of output,then the firm's long-run average cost curve will be

Accepted Answer

A)  horizontal. 
B)  positively sloped. 
C)  negatively sloped. 
D)  U-shaped. 
A)  horizontal. 
B)  positively sloped. 
C)  negatively sloped. 
D)  U-shaped.

Question 11

Marginal cost

Accepted Answer

A)  is the increase in total cost resulting from producing one more unit of output. 
B)  is the average cost of production divided by output. 
C)  equals the increase in average variable cost resulting from producing one more unit of output. 
D)  always equals average cost. 
A)  is the increase in total cost resulting from producing one more unit of output. 
B)  is the average cost of production divided by output. 
C)  equals the increase in average variable cost resulting from producing one more unit of output. 
D)  always equals average cost.

Question 12

When detailing the cost of producing electricity with turbines of different sizes,the concept of scale economies is realized when the average cost tends to

Accepted Answer

A)  decrease as the size of the turbine decreases. 
B)  increase as the size of the turbine decreases. 
C)  decrease as the size of the turbine increases. 
D)  increase as the size of the turbine increases. 
A)  decrease as the size of the turbine decreases. 
B)  increase as the size of the turbine decreases. 
C)  decrease as the size of the turbine increases. 
D)  increase as the size of the turbine increases.

Question 13

When the long-run cost curve is negatively sloped,the firm is experiencing economies of scale.

Accepted Answer

A) True 
 B)False

Question 14

At Fresh Hot Bakery,the average cost of making 20 baguettes is $1.00.The average cost of making 21 baguettes is $1.10.The marginal cost of the 21st baguettes is

Accepted Answer

A)  $0.10. 
B)  $2.10. 
C)  $3.00. 
D)  $3.10. 
A)  $0.10. 
B)  $2.10. 
C)  $3.00. 
D)  $3.10.

Question 15

Which of the following industries is most likely to exhibit significant economies of scale?

Accepted Answer

A)  home building 
B)  vegetable farming 
C)  motorcycle production 
D)  electric power generation 
A)  home building 
B)  vegetable farming 
C)  motorcycle production 
D)  electric power generation

Question 16

Dan owns a factory that manufactures smartphones.He has many expenses every month to keep his factory running.Which of the following is one of Dan's fixed costs?

Accepted Answer

A)  plastic used to make the smartphones 
B)  his electricity bill for the factory 
C)  his mortgage on the factory 
D)  memory devices used to store music and video on the smartphones 
A)  plastic used to make the smartphones 
B)  his electricity bill for the factory 
C)  his mortgage on the factory 
D)  memory devices used to store music and video on the smartphones

Question 17

Suppose that an increase in the scale of production at CR Cabinets Inc.leads to no change in average costs.CR Cabinets Inc.experiences

Accepted Answer

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

Question 18

If average variable cost decreases as output increases,then

Accepted Answer

A)  marginal cost is negative. 
B)  marginal cost is decreasing. 
C)  marginal cost is less than average variable cost. 
D)  marginal cost is greater than average variable cost. 
A)  marginal cost is negative. 
B)  marginal cost is decreasing. 
C)  marginal cost is less than average variable cost. 
D)  marginal cost is greater than average variable cost.

Question 19

Suppose marginal cost is $5.Average variable costs are $10.For the next unit of output produced,average variable costs will be

Accepted Answer

A)  less than $10. 
B)  more than $10. 
C)  equal to $10. 
D)  It is impossible to say. 
A)  less than $10. 
B)  more than $10. 
C)  equal to $10. 
D)  It is impossible to say.

Question 20

The long run is when at least one cost is fixed.

Accepted Answer

A) True 
 B)False

All of the following are possible reasons for diseconomies of scale EXCEPT

-Refer to Figure 8.8.Curve 2 is Outdoor Equipment's

A firm's long run marginal cost is

Raphael's Salon has $5,000 in fixed costs and $15,000 in variable costs monthly.Raphael's Salon performs 1,500 haircuts per month.What is the average total cost for Raphael's Salon?

Suppose that a donut shop has $1,500 of variable costs and $2,500 of fixed costs when it produces 1,000 donuts and sells them for $1 per donut.Average total cost is equal to

-Refer to Figure 8.8.Curve 3 is Outdoor Equipment's

Table 8.5 -Refer to Table 8.5.If Sherry produces five pair of earrings,her total costs are

If marginal product is negative,then

Suppose that at Jones & Smith Shoe Factory,the marginal cost of making a pair of shoes is $15 and average variable cost is $15.For the next pair of shoes produced marginal cost will be $15 and average variable cost will be $15.

If a firm's production process exhibits diseconomies of scale for all levels of output,then the firm's long-run average cost curve will be

Marginal cost

When detailing the cost of producing electricity with turbines of different sizes,the concept of scale economies is realized when the average cost tends to

When the long-run cost curve is negatively sloped,the firm is experiencing economies of scale.

At Fresh Hot Bakery,the average cost of making 20 baguettes is $1.00.The average cost of making 21 baguettes is $1.10.The marginal cost of the 21st baguettes is

Which of the following industries is most likely to exhibit significant economies of scale?

Dan owns a factory that manufactures smartphones.He has many expenses every month to keep his factory running.Which of the following is one of Dan's fixed costs?

Suppose that an increase in the scale of production at CR Cabinets Inc.leads to no change in average costs.CR Cabinets Inc.experiences

If average variable cost decreases as output increases,then

Suppose marginal cost is $5.Average variable costs are $10.For the next unit of output produced,average variable costs will be

The long run is when at least one cost is fixed.

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand,supply,and Market Equilibrium

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters

Exam 8: Production Technology and Cost

All of the following are possible reasons for diseconomies of scale EXCEPT

-Refer to Figure 8.8.Curve 2 is Outdoor Equipment's

A firm's long run marginal cost is

Raphael's Salon has $5,000 in fixed costs and $15,000 in variable costs monthly.Raphael's Salon performs 1,500 haircuts per month.What is the average total cost for Raphael's Salon?

Suppose that a donut shop has $1,500 of variable costs and $2,500 of fixed costs when it produces 1,000 donuts and sells them for $1 per donut.Average total cost is equal to

-Refer to Figure 8.8.Curve 3 is Outdoor Equipment's

Table 8.5 -Refer to Table 8.5.If Sherry produces five pair of earrings,her total costs are

If marginal product is negative,then

Suppose that at Jones & Smith Shoe Factory,the marginal cost of making a pair of shoes is $15 and average variable cost is $15.For the next pair of shoes produced marginal cost will be ________ $15 and average variable cost will be ________ $15.

If a firm's production process exhibits diseconomies of scale for all levels of output,then the firm's long-run average cost curve will be

Marginal cost

When detailing the cost of producing electricity with turbines of different sizes,the concept of scale economies is realized when the average cost tends to

When the long-run cost curve is negatively sloped,the firm is experiencing economies of scale.

At Fresh Hot Bakery,the average cost of making 20 baguettes is $1.00.The average cost of making 21 baguettes is $1.10.The marginal cost of the 21st baguettes is

Which of the following industries is most likely to exhibit significant economies of scale?

Dan owns a factory that manufactures smartphones.He has many expenses every month to keep his factory running.Which of the following is one of Dan's fixed costs?

Suppose that an increase in the scale of production at CR Cabinets Inc.leads to no change in average costs.CR Cabinets Inc.experiences

If average variable cost decreases as output increases,then

Suppose marginal cost is $5.Average variable costs are $10.For the next unit of output produced,average variable costs will be

The long run is when at least one cost is fixed.

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand,supply,and Market Equilibrium

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters

Suppose that at Jones & Smith Shoe Factory,the marginal cost of making a pair of shoes is $15 and average variable cost is $15.For the next pair of shoes produced marginal cost will be $15 and average variable cost will be $15.