Question 1

Average total cost tells us the

Accepted Answer

A)  total cost of the first unit of output,if total cost is divided evenly over all the units produced. 
B)  cost of a typical unit of output,if total cost is divided evenly over all the units produced. 
C)  cost of the last unit of output,if total cost does not include a fixed cost component. 
D)  variable cost of a firm that is producing at least one unit of output. 
A)  total cost of the first unit of output,if total cost is divided evenly over all the units produced. 
B)  cost of a typical unit of output,if total cost is divided evenly over all the units produced. 
C)  cost of the last unit of output,if total cost does not include a fixed cost component. 
D)  variable cost of a firm that is producing at least one unit of output.

Question 2

Scenario 13-6
A certain firm produces and sells staplers.Last year,it produced 7,000 staplers and sold each stapler for $6.In producing the 7,000 staplers,it incurred variable costs of $28,000 and a total cost of $45,000.
-Refer to Scenario 13-6.The firm's fixed costs amounted to

Accepted Answer

A)  $7,000. 
B)  $17,000. 
C)  $28,000. 
D)  $42,000. 
A)  $7,000. 
B)  $17,000. 
C)  $28,000. 
D)  $42,000.

Question 3

Accounting profit is equal to

Accepted Answer

A)  marginal revenue minus marginal cost. 
B)  total revenue minus the explicit cost of producing goods and services. 
C)  total revenue minus the opportunity cost of producing goods and services. 
D)  average revenue minus the average cost of producing the last unit of a good or service. 
A)  marginal revenue minus marginal cost. 
B)  total revenue minus the explicit cost of producing goods and services. 
C)  total revenue minus the opportunity cost of producing goods and services. 
D)  average revenue minus the average cost of producing the last unit of a good or service.

Question 4

Which of the following must always be true as the quantity of output increases?

Accepted Answer

A)  Marginal cost must rise. 
B)  Average total cost must rise. 
C)  Average variable cost must rise. 
D)  Average fixed cost must fall. 
A)  Marginal cost must rise. 
B)  Average total cost must rise. 
C)  Average variable cost must rise. 
D)  Average fixed cost must fall.

Question 5

Economists assume that the goal of the firm is to maximize total

Accepted Answer

A)  revenue. 
B)  profits. 
C)  costs. 
D)  satisfaction. 
A)  revenue. 
B)  profits. 
C)  costs. 
D)  satisfaction.

Question 6

Diminishing marginal product exists when the total cost curve becomes flatter as outputs increases.

Accepted Answer

A) True 
 B)False

Question 7

Table 13-11
  
-Refer to Table 13-11.What is average fixed cost when output is 40 units?

Accepted Answer

A)  $1.00 
B)  $3.32 
C)  $5.00 
D)  $8.00 
A)  $1.00 
B)  $3.32 
C)  $5.00 
D)  $8.00

Question 8

Johnny is a sophomore in college and has a 1.5 cumulative grade point average (GPA).Johnny's cumulative GPA will be better next semester if he

Accepted Answer

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

Question 9

In the short run,a firm that produces and sells computers can adjust

Accepted Answer

A)  how many workers to hire. 
B)  the size of its factories. 
C)  where to produce along its long-run average-total-cost curve. 
D)  All of the above are correct. 
A)  how many workers to hire. 
B)  the size of its factories. 
C)  where to produce along its long-run average-total-cost curve. 
D)  All of the above are correct.

Question 10

If the total cost curve gets steeper as output increases,the firm is experiencing

Accepted Answer

A)  diseconomies of scale. 
B)  economies of scale. 
C)  diminishing marginal product. 
D)  increasing marginal product. 
A)  diseconomies of scale. 
B)  economies of scale. 
C)  diminishing marginal product. 
D)  increasing marginal product.

Question 11

XYZ corporation produced 300 units of output but sold only 275 of the units it produced.The average cost of production for each unit of output produced was $100.Each of the 275 units sold was sold for a price of $95.Total profit for the XYZ corporation would be

Accepted Answer

A)  -$3,875. 
B)  $26,125. 
C)  $28,500. 
D)  $30,000. 
A)  -$3,875. 
B)  $26,125. 
C)  $28,500. 
D)  $30,000.

Question 12

The shape of the total cost curve is related to the shape of the production function.

Accepted Answer

A) True 
 B)False

Question 13

Marginal cost equals

Accepted Answer

A)  total cost divided by quantity of output produced. 
B)  total output divided by the change in total cost. 
C)  the slope of the total cost curve. 
D)  the slope of the line drawn from the origin to the total cost curve. 
A)  total cost divided by quantity of output produced. 
B)  total output divided by the change in total cost. 
C)  the slope of the total cost curve. 
D)  the slope of the line drawn from the origin to the total cost curve.

Question 14

Randy is a minor-league baseball player.His current cumulative batting average is 0.270.Randy believes that if he can raise his cumulative batting average to 0.300,he will have a chance to play in the major leagues.Which of the following statements is correct?

Accepted Answer

A)  If Randy gets between 27 and 30 hits out of his next 100 at bats,he will be able to raise his cumulative batting average to 0.300. 
B)  If Randy gets 30 hits out of his next 100 at bats,he will be able to raise his cumulative batting average to 0.300. 
C)  Randy must get more than 30 hits out of his next 100 at bats in order to raise his cumulative batting average to 0.300. 
D)  Either b or c could be correct. 
A)  If Randy gets between 27 and 30 hits out of his next 100 at bats,he will be able to raise his cumulative batting average to 0.300. 
B)  If Randy gets 30 hits out of his next 100 at bats,he will be able to raise his cumulative batting average to 0.300. 
C)  Randy must get more than 30 hits out of his next 100 at bats in order to raise his cumulative batting average to 0.300. 
D)  Either b or c could be correct.

Question 15

Table 13-11
  
-Refer to Table 13-11.What is average variable cost when output is 50 units?

Accepted Answer

A)  $3.60 
B)  $4.00 
C)  $4.40 
D)  $4.80 
A)  $3.60 
B)  $4.00 
C)  $4.40 
D)  $4.80

Question 16

Assume a certain firm regards the number of workers it employs as variable but regards the size of its factory as fixed.This assumption is often realistic

Accepted Answer

A)  in the short run but not in the long run. 
B)  in the long run but not in the short run. 
C)  both in the short run and in the long run. 
D)  neither in the short run nor in the long run. 
A)  in the short run but not in the long run. 
B)  in the long run but not in the short run. 
C)  both in the short run and in the long run. 
D)  neither in the short run nor in the long run.

Question 17

Figure 13-4  
-Refer to Figure 13-4.Curve A is always declining because of

Accepted Answer

A)  diminishing marginal product. 
B)  dividing fixed costs by higher and higher levels of output. 
C)  the fact that increasing marginal product follows decreasing marginal product. 
D)  the fact that decreasing marginal product follows increasing marginal product. 
A)  diminishing marginal product. 
B)  dividing fixed costs by higher and higher levels of output. 
C)  the fact that increasing marginal product follows decreasing marginal product. 
D)  the fact that decreasing marginal product follows increasing marginal product.

Question 18

Figure 13-4  
-Refer to Figure 13-4.Curve D is increasing because of

Accepted Answer

A)  diminishing marginal product. 
B)  increasing marginal product. 
C)  the fact that increasing marginal product follows decreasing marginal product. 
D)  the fact that decreasing marginal product follows increasing marginal product. 
A)  diminishing marginal product. 
B)  increasing marginal product. 
C)  the fact that increasing marginal product follows decreasing marginal product. 
D)  the fact that decreasing marginal product follows increasing marginal product.

Question 19

Zoe sells 200 glasses of lemonade at $0.50 each.Her total costs are $25.Her profits are

Accepted Answer

A)  $25. 
B)  $75. 
C)  $100. 
D)  $175. 
A)  $25. 
B)  $75. 
C)  $100. 
D)  $175.

Question 20

Figure 13-4  
-Refer to Figure 13-4.Curve D represents which type of cost curve?

Accepted Answer

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

Exam 13: The Costs of Production

Average total cost tells us the

Scenario 13-6 A certain firm produces and sells staplers.Last year,it produced 7,000 staplers and sold each stapler for $6.In producing the 7,000 staplers,it incurred variable costs of $28,000 and a total cost of $45,000. -Refer to Scenario 13-6.The firm's fixed costs amounted to

Accounting profit is equal to

Which of the following must always be true as the quantity of output increases?

Economists assume that the goal of the firm is to maximize total

Diminishing marginal product exists when the total cost curve becomes flatter as outputs increases.

Table 13-11 -Refer to Table 13-11.What is average fixed cost when output is 40 units?

Johnny is a sophomore in college and has a 1.5 cumulative grade point average (GPA).Johnny's cumulative GPA will be better next semester if he

In the short run,a firm that produces and sells computers can adjust

If the total cost curve gets steeper as output increases,the firm is experiencing

XYZ corporation produced 300 units of output but sold only 275 of the units it produced.The average cost of production for each unit of output produced was $100.Each of the 275 units sold was sold for a price of $95.Total profit for the XYZ corporation would be

The shape of the total cost curve is related to the shape of the production function.

Marginal cost equals

Randy is a minor-league baseball player.His current cumulative batting average is 0.270.Randy believes that if he can raise his cumulative batting average to 0.300,he will have a chance to play in the major leagues.Which of the following statements is correct?

Table 13-11 -Refer to Table 13-11.What is average variable cost when output is 50 units?

Assume a certain firm regards the number of workers it employs as variable but regards the size of its factory as fixed.This assumption is often realistic

Figure 13-4 -Refer to Figure 13-4.Curve A is always declining because of

Figure 13-4 -Refer to Figure 13-4.Curve D is increasing because of

Zoe sells 200 glasses of lemonade at $0.50 each.Her total costs are $25.Her profits are

Figure 13-4 -Refer to Figure 13-4.Curve D represents which type of cost curve?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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