Question 1

Table 13-1
Listed in the table are the long-run total costs for three different firms.
  
-Refer to Table 13-1.Firm A is experiencing economies of scale.

Accepted Answer

A) True 
 B)False

Question 2

Average total cost is equal to

Accepted Answer

A)  output/total cost. 
B)  total cost - total quantity of output. 
C)  average variable cost + total fixed cost. 
D)  total cost/output. 
A)  output/total cost. 
B)  total cost - total quantity of output. 
C)  average variable cost + total fixed cost. 
D)  total cost/output.

Question 3

Figure 13-5  
-Refer to Figure 13-5.Which of the following can be inferred from the figure above?

Accepted Answer

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

Question 4

One assumption that distinguishes short-run cost analysis from long-run cost analysis for a profit-maximizing firm is that in the short run,

Accepted Answer

A)  output is not variable. 
B)  the number of workers used to produce the firm's product is fixed. 
C)  the size of the factory is fixed. 
D)  there are no fixed costs. 
A)  output is not variable. 
B)  the number of workers used to produce the firm's product is fixed. 
C)  the size of the factory is fixed. 
D)  there are no fixed costs.

Question 5

Scenario 13-3
Tony is a wheat farmer,but he also spends part of his day teaching guitar lessons.Due to the popularity of his local country western band,Farmer Tony has more students requesting lessons than he has time for if he is to also maintain his farming business.Farmer Tony charges $25 an hour for his guitar lessons.One spring day,he spends 10 hours in his fields planting $130 worth of seeds on his farm.He expects that the seeds he planted will yield $300 worth of wheat.
-Refer to Scenario 13-3.Tony's accounting profit equals

Accepted Answer

A)  $-80. 
B)  $130. 
C)  $170. 
D)  $260. 
A)  $-80. 
B)  $130. 
C)  $170. 
D)  $260.

Question 6

When a factory is operating in the short run,

Accepted Answer

A)  it cannot alter variable costs. 
B)  total cost and variable cost are usually the same. 
C)  average fixed cost rises as output increases. 
D)  it cannot adjust the quantity of fixed inputs. 
A)  it cannot alter variable costs. 
B)  total cost and variable cost are usually the same. 
C)  average fixed cost rises as output increases. 
D)  it cannot adjust the quantity of fixed inputs.

Question 7

Analyzing the behavior of the firm enhances our understanding of

Accepted Answer

A)  what decisions lie behind the market supply curve. 
B)  how consumers allocate their income to purchase scarce resources. 
C)  how financial institutions set interest rates. 
D)  whether resources are allocated fairly. 
A)  what decisions lie behind the market supply curve. 
B)  how consumers allocate their income to purchase scarce resources. 
C)  how financial institutions set interest rates. 
D)  whether resources are allocated fairly.

Question 8

Figure 13-9
The figure below depicts average total cost functions for a firm that produces automobiles.  
-Refer to Figure 13-9.Which curve represents the long-run average total cost?

Accepted Answer

A)  ATCA 
B)  ATCB 
C)  ATCC 
D)  ATCD 
A)  ATCA 
B)  ATCB 
C)  ATCC 
D)  ATCD

Question 9

In the long run,a firm that produces and sells computers gets to choose

Accepted Answer

A)  how many workers to hire. 
B)  the size of its factories. 
C)  which short-run average-total-cost curve to use. 
D)  All of the above are correct. 
A)  how many workers to hire. 
B)  the size of its factories. 
C)  which short-run average-total-cost curve to use. 
D)  All of the above are correct.

Question 10

Table 13-5
The Flying Elvis Copter Rides
  
-Refer to Table 13-5.What is the value of C?

Accepted Answer

A)  $25 
B)  $50 
C)  $100 
D)  $200 
A)  $25 
B)  $50 
C)  $100 
D)  $200

Question 11

There is general agreement among economists that the long-run time period exceeds one year.

Accepted Answer

A) True 
 B)False

Question 12

The most likely explanation for economies of scale is

Accepted Answer

A)  coordination problems. 
B)  specialization of labor. 
C)  increasing marginal cost. 
D)  decreasing marginal cost. 
A)  coordination problems. 
B)  specialization of labor. 
C)  increasing marginal cost. 
D)  decreasing marginal cost.

Question 13

Table 13-3
  
-Refer to Table 13-3.What is total output when 1 worker is hired?

Accepted Answer

A)  30 
B)  40 
C)  120 
D)  160 
A)  30 
B)  40 
C)  120 
D)  160

Question 14

Charles's Car Wash has average variable costs of $2 and average fixed costs of $3 when it produces 100 units of output (car washes).The firm's total cost is

Accepted Answer

A)  $100. 
B)  $200. 
C)  $300. 
D)  $500. 
A)  $100. 
B)  $200. 
C)  $300. 
D)  $500.

Exam 13: The Costs of Production

Table 13-1 Listed in the table are the long-run total costs for three different firms. -Refer to Table 13-1.Firm A is experiencing economies of scale.

Average total cost is equal to

Figure 13-5 -Refer to Figure 13-5.Which of the following can be inferred from the figure above?

One assumption that distinguishes short-run cost analysis from long-run cost analysis for a profit-maximizing firm is that in the short run,

When a factory is operating in the short run,

Analyzing the behavior of the firm enhances our understanding of

Figure 13-9 The figure below depicts average total cost functions for a firm that produces automobiles. -Refer to Figure 13-9.Which curve represents the long-run average total cost?

In the long run,a firm that produces and sells computers gets to choose

Table 13-5 The Flying Elvis Copter Rides -Refer to Table 13-5.What is the value of C?

There is general agreement among economists that the long-run time period exceeds one year.

The most likely explanation for economies of scale is

Table 13-3 -Refer to Table 13-3.What is total output when 1 worker is hired?

Charles's Car Wash has average variable costs of $2 and average fixed costs of $3 when it produces 100 units of output (car washes).The firm's total cost is

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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