Question 1

Table 13-3
  
-Refer to Table 13-3. The marginal product of the third worker is

Accepted Answer

A)  230 units. 
B)  100 units. 
C)  77 units. 
D)  60 units. 
A)  230 units. 
B)  100 units. 
C)  77 units. 
D)  60 units.

Question 2

Scenario 13-7
Julia prepares tax returns and does bookkeeping. Last year her revenues from the tax and bookkeeping business were $150,000, and her expenses for the business were $15,000. When she started her tax and bookkeeping business, Julia gave up her supplemental job doing in-home pet sitting. She used to earn $10,000 per year from pet sitting. Assume that she incurred no costs for her pet sitting business.
-Refer to Scenario 13-7. Julia's accounting profits are

Accepted Answer

A)  $160,000. 
B)  $150,000. 
C)  $135,000. 
D)  $125,000. 
A)  $160,000. 
B)  $150,000. 
C)  $135,000. 
D)  $125,000.

Question 3

Scenario 13-7
Julia prepares tax returns and does bookkeeping. Last year her revenues from the tax and bookkeeping business were $150,000, and her expenses for the business were $15,000. When she started her tax and bookkeeping business, Julia gave up her supplemental job doing in-home pet sitting. She used to earn $10,000 per year from pet sitting. Assume that she incurred no costs for her pet sitting business.
-Refer to Scenario 13-7. Julia's economic profits are

Accepted Answer

A)  $160,000. 
B)  $150,000. 
C)  $135,000. 
D)  $125,000. 
A)  $160,000. 
B)  $150,000. 
C)  $135,000. 
D)  $125,000.

Question 4

Table 13-1
  
-Refer to Table 13-1. What is total output when 5 workers are hired?

Accepted Answer

A)  -10 
C)  90 
C)  185 
D)  225 
A)  -10 
C)  90 
C)  185 
D)  225

Question 5

The graph of the production function plots total cost versus quantity of output.

Accepted Answer

A) True 
 B)False

Question 6

How can the average-fixed-cost curve be declining when fixed cost is constant?

Accepted Answer

Although fixed cost is unchang

Question 7

Scenario 13-1
Korie wants to start her own business making custom furniture. She can purchase a factory that costs $400,000. Korie currently has $500,000 in the bank earning 3 percent interest per year.
-Refer to Scenario 13-1. If Korie purchases the factory with her own money, what is the annual implicit opportunity cost of purchasing the factory?

Accepted Answer

A)  $0 
B)  $3,000 
C)  $12,000 
D)  $15,000 
A)  $0 
B)  $3,000 
C)  $12,000 
D)  $15,000

Question 8

In the long run a company that produces and sells candy bars incurs total costs of $1,200 when output is 2,400 candy bars and $1,400 when output is 2,900 candy bars. The candy bar company exhibits

Accepted Answer

A)  diseconomies of scale because total cost is rising as output rises. 
B)  diseconomies of scale because average total cost is rising as output rises. 
C)  economies of scale because total cost is rising as output rises. 
D)  economies of scale because average total cost is falling as output rises. 
A)  diseconomies of scale because total cost is rising as output rises. 
B)  diseconomies of scale because average total cost is rising as output rises. 
C)  economies of scale because total cost is rising as output rises. 
D)  economies of scale because average total cost is falling as output rises.

Question 9

Jane was a partner at a law firm earning $223,000 per year. She left the firm to open her own law practice. In the first year of business she generated revenues of $347,000 and incurred explicit costs of $163,000. Jane's economic profit from her first year in her own practice is

Accepted Answer

A)  -$39,000. 
B)  $124,000. 
C)  $163,000. 
D)  $184,000. 
A)  -$39,000. 
B)  $124,000. 
C)  $163,000. 
D)  $184,000.

Question 10

Scenario 13-8
Wanda owns a lemonade stand. She produces lemonade using five inputs: water, sugar, lemons, paper cups, and labor. Her costs per glass are as follows: $0.01 for water, $0.02 for sugar, $0.03 for lemons, $0.02 for cups, and $0.10 for the opportunity cost of her labor. She can sell 300 glasses for $0.50 each.
-Refer to Scenario 13-8. What are Wanda's total economic profits?

Accepted Answer

A)  $150 
B)  $126 
C)  $96 
D)  $54 
A)  $150 
B)  $126 
C)  $96 
D)  $54

Question 11

Total revenue minus only implicit costs is called

Accepted Answer

A)  accounting profit. 
B)  economic profit. 
C)  opportunity cost. 
D)  None of the above is correct. 
A)  accounting profit. 
B)  economic profit. 
C)  opportunity cost. 
D)  None of the above is correct.

Question 12

If long-run average total cost decreases as the quantity of output increases, the firm is experiencing

Accepted Answer

A)  economies of scale. 
B)  diseconomies of scale. 
C)  coordination problems arising from the large size of the firm. 
D)  fixed costs greatly exceeding variable costs. 
A)  economies of scale. 
B)  diseconomies of scale. 
C)  coordination problems arising from the large size of the firm. 
D)  fixed costs greatly exceeding variable costs.

Question 13

Table 13-18
  
-Refer to Table 13-18. What is the shape of the average-fixed-cost curve?

Accepted Answer

AFC is always declining as out

Question 14

On a 100-acre farm, a farmer is able to produce 3,000 bushels of wheat when he hires 2 workers. He is able to produce 4,400 bushels of wheat when he hires 3 workers. Which of the following possibilities is consistent with the property of diminishing marginal product?

Accepted Answer

A)  The farmer is able to produce 5,600 bushels of wheat when he hires 4 workers. 
B)  The farmer is able to produce 5,800 bushels of wheat when he hires 4 workers. 
C)  The farmer is able to produce 6,000 bushels of wheat when he hires 4 workers. 
D)  Any of the above could be correct. 
A)  The farmer is able to produce 5,600 bushels of wheat when he hires 4 workers. 
B)  The farmer is able to produce 5,800 bushels of wheat when he hires 4 workers. 
C)  The farmer is able to produce 6,000 bushels of wheat when he hires 4 workers. 
D)  Any of the above could be correct.

Question 15

Describe the general shape of the average-fixed-cost curve.

Accepted Answer

AFC = FC/Q. Fixed cost is unch

Question 16

In the long run a company that produces and sells kayaks incurs total costs of $15,000 when output is 30 kayaks and $20,000 when output is 40 kayaks. The kayak company exhibits

Accepted Answer

A)  diseconomies of scale because total cost is rising as output rises. 
B)  constant returns to scale because average total cost is constant as output rises. 
C)  diseconomies of scale because average total cost is rising as output rises. 
D)  economies of scale because average total cost is falling as output rises. 
A)  diseconomies of scale because total cost is rising as output rises. 
B)  constant returns to scale because average total cost is constant as output rises. 
C)  diseconomies of scale because average total cost is rising as output rises. 
D)  economies of scale because average total cost is falling as output rises.

Question 17

Describe how an accounting firm could experience economies of scale.

Accepted Answer

Specialization of labor can produce econ

Question 18

The Three Amigo's company produced and sold 500 dog beds. The average cost of production per dog bed was $50. Each dog be sold for a price of $65. The Three Amigo's total costs are

Accepted Answer

A)  $7,500. 
B)  $25,000. 
C)  $32,500. 
D)  $67,500. 
A)  $7,500. 
B)  $25,000. 
C)  $32,500. 
D)  $67,500.

Question 19

Table 13-19
  
-Refer to Table 13-19. What is the marginal product of the second worker?

Accepted Answer

250 - 100

Question 20

The amount of money that a firm pays to buy inputs is called

Accepted Answer

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

Table 13-3 -Refer to Table 13-3. The marginal product of the third worker is

Table 13-1 -Refer to Table 13-1. What is total output when 5 workers are hired?

The graph of the production function plots total cost versus quantity of output.

How can the average-fixed-cost curve be declining when fixed cost is constant?

In the long run a company that produces and sells candy bars incurs total costs of $1,200 when output is 2,400 candy bars and $1,400 when output is 2,900 candy bars. The candy bar company exhibits

Jane was a partner at a law firm earning $223,000 per year. She left the firm to open her own law practice. In the first year of business she generated revenues of $347,000 and incurred explicit costs of $163,000. Jane's economic profit from her first year in her own practice is

Total revenue minus only implicit costs is called

If long-run average total cost decreases as the quantity of output increases, the firm is experiencing

Table 13-18 -Refer to Table 13-18. What is the shape of the average-fixed-cost curve?

On a 100-acre farm, a farmer is able to produce 3,000 bushels of wheat when he hires 2 workers. He is able to produce 4,400 bushels of wheat when he hires 3 workers. Which of the following possibilities is consistent with the property of diminishing marginal product?

Describe the general shape of the average-fixed-cost curve.

In the long run a company that produces and sells kayaks incurs total costs of $15,000 when output is 30 kayaks and $20,000 when output is 40 kayaks. The kayak company exhibits

Describe how an accounting firm could experience economies of scale.

The Three Amigo's company produced and sold 500 dog beds. The average cost of production per dog bed was $50. Each dog be sold for a price of $65. The Three Amigo's total costs are

Table 13-19 -Refer to Table 13-19. What is the marginal product of the second worker?

The amount of money that a firm pays to buy inputs is called

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

Filters

Exam 13: The Costs of Production

Table 13-3 -Refer to Table 13-3. The marginal product of the third worker is

Table 13-1 -Refer to Table 13-1. What is total output when 5 workers are hired?

The graph of the production function plots total cost versus quantity of output.

How can the average-fixed-cost curve be declining when fixed cost is constant?

In the long run a company that produces and sells candy bars incurs total costs of $1,200 when output is 2,400 candy bars and $1,400 when output is 2,900 candy bars. The candy bar company exhibits

Jane was a partner at a law firm earning $223,000 per year. She left the firm to open her own law practice. In the first year of business she generated revenues of $347,000 and incurred explicit costs of $163,000. Jane's economic profit from her first year in her own practice is

Total revenue minus only implicit costs is called

If long-run average total cost decreases as the quantity of output increases, the firm is experiencing

Table 13-18 -Refer to Table 13-18. What is the shape of the average-fixed-cost curve?

On a 100-acre farm, a farmer is able to produce 3,000 bushels of wheat when he hires 2 workers. He is able to produce 4,400 bushels of wheat when he hires 3 workers. Which of the following possibilities is consistent with the property of diminishing marginal product?

Describe the general shape of the average-fixed-cost curve.

In the long run a company that produces and sells kayaks incurs total costs of $15,000 when output is 30 kayaks and $20,000 when output is 40 kayaks. The kayak company exhibits

Describe how an accounting firm could experience economies of scale.

The Three Amigo's company produced and sold 500 dog beds. The average cost of production per dog bed was $50. Each dog be sold for a price of $65. The Three Amigo's total costs are

Table 13-19 -Refer to Table 13-19. What is the marginal product of the second worker?

The amount of money that a firm pays to buy inputs is called

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

Filters