Question 1

What might cause diseconomies of scale?

Accepted Answer

coordinati

Question 2

Economists normally assume that the goal of a firm is to (i) earn profits as large as possible, even if it means reducing output.
(ii) earn revenues as large as possible, even if it means reducing profits.
(iii) minimize costs, regardless of profits.

Accepted Answer

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

Question 3

Scenario 13-15
Joan grows pumpkins. If Joan plants no seeds on her farm, she gets no harvest. If she plants 1 bag of seeds, she gets 500 pumpkins. If she plants 2 bags, she gets 800 pumpkins. If she plants 3 bags, she gets 900 pumpkins. A bag of seeds costs $100, and seeds are her only cost.
-Refer to Scenario 13-15. Joan's total­cost curve is

Accepted Answer

A)  increasing at an increasing rate. 
B)  increasing at a decreasing rate. 
C)  increasing at a constant rate. 
D)  decreasing. 
A)  increasing at an increasing rate. 
B)  increasing at a decreasing rate. 
C)  increasing at a constant rate. 
D)  decreasing.

Question 4

Economic profit

Accepted Answer

A)  will never exceed accounting profit. 
B)  is most often equal to accounting profit. 
C)  is always at least as large as accounting profit. 
D)  is a less complete measure of profitability than accounting profit. 
A)  will never exceed accounting profit. 
B)  is most often equal to accounting profit. 
C)  is always at least as large as accounting profit. 
D)  is a less complete measure of profitability than accounting profit.

Question 5

Table 13-20
Listed in the table are the long-run total costs for three different firms.
  
-Refer to Table 13-20. Firm B is experiencing constant returns to scale.

Accepted Answer

A) True 
 B)False

Question 6

Table 13-5
  
-Refer to Table 13-5. The marginal product of the third worker is

Accepted Answer

A)  9,000 units. 
B)  8,000 units. 
C)  7,000 units. 
D)  5,000 units. 
A)  9,000 units. 
B)  8,000 units. 
C)  7,000 units. 
D)  5,000 units.

Question 7

When the marginal product of an input declines as the quantity of that input increases, the production function exhibits

Accepted Answer

A)  increasing marginal product. 
B)  diminishing marginal product. 
C)  diminishing total product. 
D)  Both b and c are correct. 
A)  increasing marginal product. 
B)  diminishing marginal product. 
C)  diminishing total product. 
D)  Both b and c are correct.

Question 8

Kate is a florist. Kate can arrange 20 bouquets per day. She is considering hiring her husband William to work for her. Together Kate and William can arrange 35 bouquets per day. What is William's marginal product?

Accepted Answer

A)  55 bouquets 
B)  35 bouquets 
C)  22.5 bouquets 
D)  15 bouquets 
A)  55 bouquets 
B)  35 bouquets 
C)  22.5 bouquets 
D)  15 bouquets

Question 9

Scenario 13-6
Ziva is an organic lettuce farmer, but she also spends part of her day as a professional organizing consultant. As a consultant, Ziva helps people organize their houses. Due to the popularity of her home-organization services, Farmer Ziva has more clients requesting her services than she has time to help if she maintains her farming business. Farmer Ziva charges $25 an hour for her home-organization services. One spring day, Ziva spends 10 hours in her fields planting $130 worth of seeds on her farm. She expects that the seeds she planted will yield $300 worth of lettuce.
-Refer to Scenario 13-6. Ziva's accounting profit from farming equals

Accepted Answer

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

Question 10

When a firm's only variable input is labor, then the slope of the production function measures the

Accepted Answer

A)  quantity of labor. 
B)  quantity of output. 
C)  total cost. 
D)  marginal product of labor. 
A)  quantity of labor. 
B)  quantity of output. 
C)  total cost. 
D)  marginal product of labor.

Question 11

Figure 13-2  
-Refer to Figure 13-2. If the figure represented production at a cookie factory, the factory would be experiencing

Accepted Answer

A)  diminishing marginal product of workers. 
B)  diminishing marginal cost of cookie production. 
C)  decreasing cost of cookie production. 
D)  decreasing output of cookies. 
A)  diminishing marginal product of workers. 
B)  diminishing marginal cost of cookie production. 
C)  decreasing cost of cookie production. 
D)  decreasing output of cookies.

Question 12

Table 13-4
Charles's Math Tutoring
  
-Refer to Table 13-4. What is the marginal product of the third worker?

Accepted Answer

A)  15 students 
B)  20 students 
C)  35 students 
D)  60 students 
A)  15 students 
B)  20 students 
C)  35 students 
D)  60 students

Question 13

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 implicit costs are

Accepted Answer

A)  0. 
B)  $10,000. 
C)  $15,000. 
D)  $25,000. 
A)  0. 
B)  $10,000. 
C)  $15,000. 
D)  $25,000.

Question 14

Which of these assumptions is often realistic for a firm in the short run?

Accepted Answer

A)  The firm can vary both the size of its factory and the number of workers it employs. 
B)  The firm can vary the size of its factory but not the number of workers it employs. 
C)  The firm can vary the number of workers it employs but not the size of its factory. 
D)  The firm can vary neither the size of its factory nor the number of workers it employs. 
A)  The firm can vary both the size of its factory and the number of workers it employs. 
B)  The firm can vary the size of its factory but not the number of workers it employs. 
C)  The firm can vary the number of workers it employs but not the size of its factory. 
D)  The firm can vary neither the size of its factory nor the number of workers it employs.

Question 15

Table 13-20
Listed in the table are the long-run total costs for three different firms.
  
-Refer to Table 13-20. Firm C is experiencing diseconomies of scale.

Accepted Answer

A) True 
 B)False

Question 16

In the long run a company that produces and sells popcorn incurs total costs of $1,050 when output is 90 canisters and $1,200 when output is 120 canisters. The popcorn 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 17

Can economic profit ever exceed accounting profit?

Accepted Answer

No. Economic profit = Accounting profit

Question 18

Profit equals total revenue minus total cost.

Accepted Answer

A) True 
 B)False

Question 19

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 accounting profits?

Accepted Answer

A)  $150 
B)  $126 
C)  $96 
D)  $24 
A)  $150 
B)  $126 
C)  $96 
D)  $24

Question 20

Table 13-17
Consider the following table of long-run total cost for four different firms:
  
-Refer to Table 13-17. Which firm has economies of scale and then diseconomies of scale as output increases from 1 to 7?

Accepted Answer

A)  Firm 1 
B)  Firm 2 
C)  Firm 3 
D)  Firm 4 
A)  Firm 1 
B)  Firm 2 
C)  Firm 3 
D)  Firm 4

What might cause diseconomies of scale?

Economists normally assume that the goal of a firm is to (i) earn profits as large as possible, even if it means reducing output. (ii) earn revenues as large as possible, even if it means reducing profits. (iii) minimize costs, regardless of profits.

Economic profit

Table 13-20 Listed in the table are the long-run total costs for three different firms. -Refer to Table 13-20. Firm B is experiencing constant returns to scale.

Table 13-5 -Refer to Table 13-5. The marginal product of the third worker is

When the marginal product of an input declines as the quantity of that input increases, the production function exhibits

Kate is a florist. Kate can arrange 20 bouquets per day. She is considering hiring her husband William to work for her. Together Kate and William can arrange 35 bouquets per day. What is William's marginal product?

When a firm's only variable input is labor, then the slope of the production function measures the

Figure 13-2 -Refer to Figure 13-2. If the figure represented production at a cookie factory, the factory would be experiencing

Table 13-4 Charles's Math Tutoring -Refer to Table 13-4. What is the marginal product of the third worker?

Which of these assumptions is often realistic for a firm in the short run?

Table 13-20 Listed in the table are the long-run total costs for three different firms. -Refer to Table 13-20. Firm C is experiencing diseconomies of scale.

In the long run a company that produces and sells popcorn incurs total costs of $1,050 when output is 90 canisters and $1,200 when output is 120 canisters. The popcorn company exhibits

Can economic profit ever exceed accounting profit?

Profit equals total revenue minus total cost.

Table 13-17 Consider the following table of long-run total cost for four different firms: -Refer to Table 13-17. Which firm has economies of scale and then diseconomies of scale as output increases from 1 to 7?

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

What might cause diseconomies of scale?

Economists normally assume that the goal of a firm is to (i) earn profits as large as possible, even if it means reducing output. (ii) earn revenues as large as possible, even if it means reducing profits. (iii) minimize costs, regardless of profits.

Economic profit

Table 13-20 Listed in the table are the long-run total costs for three different firms. -Refer to Table 13-20. Firm B is experiencing constant returns to scale.

Table 13-5 -Refer to Table 13-5. The marginal product of the third worker is

When the marginal product of an input declines as the quantity of that input increases, the production function exhibits

Kate is a florist. Kate can arrange 20 bouquets per day. She is considering hiring her husband William to work for her. Together Kate and William can arrange 35 bouquets per day. What is William's marginal product?

When a firm's only variable input is labor, then the slope of the production function measures the

Figure 13-2 -Refer to Figure 13-2. If the figure represented production at a cookie factory, the factory would be experiencing

Table 13-4 Charles's Math Tutoring -Refer to Table 13-4. What is the marginal product of the third worker?

Which of these assumptions is often realistic for a firm in the short run?

Table 13-20 Listed in the table are the long-run total costs for three different firms. -Refer to Table 13-20. Firm C is experiencing diseconomies of scale.

In the long run a company that produces and sells popcorn incurs total costs of $1,050 when output is 90 canisters and $1,200 when output is 120 canisters. The popcorn company exhibits

Can economic profit ever exceed accounting profit?

Profit equals total revenue minus total cost.

Table 13-17 Consider the following table of long-run total cost for four different firms: -Refer to Table 13-17. Which firm has economies of scale and then diseconomies of scale as output increases from 1 to 7?

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