Question 1

Diseconomies of scale exist over the range of output for which the long-run average cost curve is:

Accepted Answer

A)  constant. 
B)  falling. 
C)  rising. 
D)  none of the above. 
A)  constant. 
B)  falling. 
C)  rising. 
D)  none of the above.

Question 2

Paul's Plumbing is a small business that employs 12 people.Which of the following is the best example of an implicit cost incurred by this firm?

Accepted Answer

A)  The tax payments on property owned by the firm. 
B)  The wages paid to the 12 employees. 
C)  The half of the payroll taxes on the wages of the 12 employees paid by the employers, but not the half paid by the employees. 
D)  The accounting services provided free of charge to the firm by Paul's wife, who is an accountant. 
A)  The tax payments on property owned by the firm. 
B)  The wages paid to the 12 employees. 
C)  The half of the payroll taxes on the wages of the 12 employees paid by the employers, but not the half paid by the employees. 
D)  The accounting services provided free of charge to the firm by Paul's wife, who is an accountant.

Question 3

Bill lives in Montana and likes to grow zucchini.He applies fertilizer to his crops twice during the growing season and notices that the second layer of fertilizer increases his crop,but not as much as the first layer.What economic concept best explains this observation?

Accepted Answer

A)  The law of diminishing marginal utility. 
B)  The law of diminishing returns. 
C)  Return equalization principle. 
D)  The principal-agent problem. 
A)  The law of diminishing marginal utility. 
B)  The law of diminishing returns. 
C)  Return equalization principle. 
D)  The principal-agent problem.

Question 4

If marginal product is at a maximum,then marginal cost is at a minimum.

Accepted Answer

A) True 
 B)False

Question 5

Economic profit is:

Accepted Answer

A)  total revenues minus variable costs. 
B)  total revenues minus private costs. 
C)  total revenues minus explicit costs. 
D)  total revenues minus total costs. 
A)  total revenues minus variable costs. 
B)  total revenues minus private costs. 
C)  total revenues minus explicit costs. 
D)  total revenues minus total costs.

Question 6

What are the seven short run cost calculations? How are they related?

Accepted Answer

The seven short run cost calculations ar

Question 7

Suppose a firm has total revenue of $200 million,explicit costs of $190 million,and implicit costs of $20 million.This firm's accounting profit is:

Accepted Answer

A)  $80 million. 
B)  $70 million. 
C)  $10 million. 
D)  -$10 million. 
A)  $80 million. 
B)  $70 million. 
C)  $10 million. 
D)  -$10 million.

Question 8

The total fixed cost curve:

Accepted Answer

A)  varies with the quantity of inputs used. 
B)  decreases with output. 
C)  increases with output. 
D)  remains constant regardless of output. 
A)  varies with the quantity of inputs used. 
B)  decreases with output. 
C)  increases with output. 
D)  remains constant regardless of output.

Question 9

Marginal cost is calculated by dividing the change in total cost by the change in total output.

Accepted Answer

A) True 
 B)False

Diseconomies of scale exist over the range of output for which the long-run average cost curve is:

Paul's Plumbing is a small business that employs 12 people.Which of the following is the best example of an implicit cost incurred by this firm?

Bill lives in Montana and likes to grow zucchini.He applies fertilizer to his crops twice during the growing season and notices that the second layer of fertilizer increases his crop,but not as much as the first layer.What economic concept best explains this observation?

If marginal product is at a maximum,then marginal cost is at a minimum.

Economic profit is:

What are the seven short run cost calculations? How are they related?

Suppose a firm has total revenue of $200 million,explicit costs of $190 million,and implicit costs of $20 million.This firm's accounting profit is:

The total fixed cost curve:

Marginal cost is calculated by dividing the change in total cost by the change in total output.

Introducing the Economic Way of Thinking

A: Appendix: Applying Graphs to Economics

Production Possibilities,Opportunity Cost,and Economic Growth

Part 1: Market Demand and Supply

Part 2: Market Demand and Supply

Markets in Action

Price Elasticity of Demand

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets and Income Distribution

Gross Domestic Product

Business Cycles and Unemployment

Inflation

Aggregate Demand and Supply

A: Appendix: The Self-Correcting Aggregate Demand and Supply Model

Fiscal Policy

The Public Sector

Federal Deficits,Surpluses,and the National Debt

Money and the Federal Reserve System

Money Creation

Monetary Policy

A: Appendix: Policy Disputes Using the Self-Correcting Aggregate Demand and Supply Model

International Trade and Finance

Economies in Transition

Growth and the Less-Developed Countries

Filters

Exam 6: Production Costs

Diseconomies of scale exist over the range of output for which the long-run average cost curve is:

Paul's Plumbing is a small business that employs 12 people.Which of the following is the best example of an implicit cost incurred by this firm?

Bill lives in Montana and likes to grow zucchini.He applies fertilizer to his crops twice during the growing season and notices that the second layer of fertilizer increases his crop,but not as much as the first layer.What economic concept best explains this observation?

If marginal product is at a maximum,then marginal cost is at a minimum.

Economic profit is:

What are the seven short run cost calculations? How are they related?

Suppose a firm has total revenue of $200 million,explicit costs of $190 million,and implicit costs of $20 million.This firm's accounting profit is:

The total fixed cost curve:

Marginal cost is calculated by dividing the change in total cost by the change in total output.

Introducing the Economic Way of Thinking

A: Appendix: Applying Graphs to Economics

Production Possibilities,Opportunity Cost,and Economic Growth

Part 1: Market Demand and Supply

Part 2: Market Demand and Supply

Markets in Action

Price Elasticity of Demand

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets and Income Distribution

Gross Domestic Product

Business Cycles and Unemployment

Inflation

Aggregate Demand and Supply

A: Appendix: The Self-Correcting Aggregate Demand and Supply Model

Fiscal Policy

The Public Sector

Federal Deficits,Surpluses,and the National Debt

Money and the Federal Reserve System

Money Creation

Monetary Policy

A: Appendix: Policy Disputes Using the Self-Correcting Aggregate Demand and Supply Model

International Trade and Finance

Economies in Transition

Growth and the Less-Developed Countries

Filters