Question 1

In order to be drawn correctly the gap between ATC and AVC is

Accepted Answer

A) Constant. 
B) Diminishing until they cross at which point they diverge. 
C) Diminishing until they cross at which point they quickly reconverge. 
D) Shrinking but they never cross. 
A) Constant. 
B) Diminishing until they cross at which point they diverge. 
C) Diminishing until they cross at which point they quickly reconverge. 
D) Shrinking but they never cross.

Question 2

Suppose the market price for a price taking firm is known to be $10, the total revenue accruing to it if it sells 100 is ____ and the total revenue accruing to it if it sells 200 is ____.

Accepted Answer

A) $10, $10 
B) $100, $200 
C) $1000, $2000 
D) $1000, $1000 
A) $10, $10 
B) $100, $200 
C) $1000, $2000 
D) $1000, $1000

Question 3

The result that a firm should produce where MC=MR except when the shutdown condition is met is based on the assumption that it is attempting to

Accepted Answer

A) maximize profit. 
B) minimize marginal costs. 
C) maximize market share. 
D) minimize average costs 
A) maximize profit. 
B) minimize marginal costs. 
C) maximize market share. 
D) minimize average costs

Question 4

Average Total Cost is

Accepted Answer

A) the addition to cost associated with one additional unit of output. 
B) the per unit cost of production. 
C) the per unit variable cost of production. 
D) the per unit fixed cost of production. 
A) the addition to cost associated with one additional unit of output. 
B) the per unit cost of production. 
C) the per unit variable cost of production. 
D) the per unit fixed cost of production.

Question 5

If a firm's marginal cost is greater than its average total cost, its average total cost is

Accepted Answer

A) increasing. 
B) constant. 
C) decreasing. 
D) not U-shaped. 
A) increasing. 
B) constant. 
C) decreasing. 
D) not U-shaped.

Question 6

If MR<MC the firm should produce

Accepted Answer

A) At this quantity. 
B) Fewer than this quantity. 
C) More than this quantity. 
D) Zero. 
A) At this quantity. 
B) Fewer than this quantity. 
C) More than this quantity. 
D) Zero.

Question 7

-Refer to Table 4.1, Box F should be filled with

Accepted Answer

A) $0. 
B) $10. 
C) $100. 
D) $110. 
A) $0. 
B) $10. 
C) $100. 
D) $110.

Question 8

When a firm has no competitors, in order to sell more of the good

Accepted Answer

A) it only need produce more of the good. 
B) it must, ironically, increase prices. 
C) it must reduce the price it charges. 
D) it must keep prices steady. 
A) it only need produce more of the good. 
B) it must, ironically, increase prices. 
C) it must reduce the price it charges. 
D) it must keep prices steady.

Question 9

Which of the following algebraic expressions is inaccurate

Accepted Answer

A) TC=TVC+TFC 
B) ATC=AFC+AVC 
C) MC=ATC-AVC 
D) AFC=ATC-AVC 
A) TC=TVC+TFC 
B) ATC=AFC+AVC 
C) MC=ATC-AVC 
D) AFC=ATC-AVC

Question 10

-Refer to Table 4.2, Box C should be filled with

Accepted Answer

A) $0. 
B) $5 
C) $1 
D) $2 
A) $0. 
B) $5 
C) $1 
D) $2

Question 11

If the total cost of producing 19 wizzbies is $38,000 and the total cost of producing 20 wizzbies is $39,000, the average total cost of producing the 19th wizzbie is approximately

Accepted Answer

A) $1,000 
B) $2,000 
C) $19,000 
D) $38,000 
A) $1,000 
B) $2,000 
C) $19,000 
D) $38,000

Question 12

-Refer to Table 4.2, Box J should be filled with

Accepted Answer

A) $0. 
B) $5.67. 
C) $9.00. 
D) $17. 
A) $0. 
B) $5.67. 
C) $9.00. 
D) $17.

Question 13

-Refer to Table 4.2, Box B should be filled with

Accepted Answer

A) $0. 
B) $10. 
C) $20. 
D) $30. 
A) $0. 
B) $10. 
C) $20. 
D) $30.

Question 14

When a firm has many competitors selling the same good, in order to sell more of the good

Accepted Answer

A) it only need produce more of the good 
B) it must, ironically, increase prices 
C) it must reduce the price it charges 
D) it must advertise 
A) it only need produce more of the good 
B) it must, ironically, increase prices 
C) it must reduce the price it charges 
D) it must advertise

Question 15

If the market price for a good produced by a price taking firm is $7, the firm's total revenue is

Accepted Answer

A) a flat line at P=$7. 
B) parabolic. 
C) downward sloping. 
D) an upward sloping line beginning at the origin and having a slope of 7 
A) a flat line at P=$7. 
B) parabolic. 
C) downward sloping. 
D) an upward sloping line beginning at the origin and having a slope of 7

Question 16

When you derive the marginal and average product of labor curve

Accepted Answer

A) The marginal product of labor cuts the average product labor at the point where the marginal product of labor is at its maximum. 
B) The marginal product of labor cuts the average product labor at the point where the average product of labor is at its maximum. 
C) The marginal product of labor cuts the average product labor at the point where the marginal product of labor is at its minimum. 
D) The marginal product of labor cuts the average product labor at the point where the average product of labor is at its minimum. 
A) The marginal product of labor cuts the average product labor at the point where the marginal product of labor is at its maximum. 
B) The marginal product of labor cuts the average product labor at the point where the average product of labor is at its maximum. 
C) The marginal product of labor cuts the average product labor at the point where the marginal product of labor is at its minimum. 
D) The marginal product of labor cuts the average product labor at the point where the average product of labor is at its minimum.

Question 17

Given the production function and total cost function shown in Chapter 4, as production increases, total costs

Accepted Answer

A) decrease constantly. 
B) decrease for a while and then increase. 
C) increase constantly. 
D) increase for a while and then decrease. 
A) decrease constantly. 
B) decrease for a while and then increase. 
C) increase constantly. 
D) increase for a while and then decrease.

Question 18

Suppose you are deciding whether or not to increase production. You are currently making a profit. If you produce one more unit your increase in cost will be $10, your average variable costs will increase to less than that and your average fixed costs will decrease. Finally, your average revenue will increase to $10, but your increase in revenue will be $10. You should

Accepted Answer

A) Increase production by at least 1 unit. 
B) Increase production by exactly 1 unit. 
C) Leave production unchanged, profit is maximized where you are. 
D) Redo the math associated with decreasing production because that may result in greater profit. 
A) Increase production by at least 1 unit. 
B) Increase production by exactly 1 unit. 
C) Leave production unchanged, profit is maximized where you are. 
D) Redo the math associated with decreasing production because that may result in greater profit.

Question 19

If the total cost of producing 19 wizzbies is $38,000 and the total cost of producing 20 wizzbies is $39,000, the marginal cost of producing the 20th wizzbie is approximately

Accepted Answer

A) $1,000 
B) $2,000 
C) $19,000 
D) $38,000 
A) $1,000 
B) $2,000 
C) $19,000 
D) $38,000

Question 20

Costs which increase with an increase in output are called

Accepted Answer

A) fixed costs. 
B) changeable costs. 
C) variable costs. 
D) unchangeable costs. 
A) fixed costs. 
B) changeable costs. 
C) variable costs. 
D) unchangeable costs.

Exam 4: Firm Production, Cost, and Revenue

In order to be drawn correctly the gap between ATC and AVC is

Suppose the market price for a price taking firm is known to be $10, the total revenue accruing to it if it sells 100 is ____ and the total revenue accruing to it if it sells 200 is ____.

The result that a firm should produce where MC=MR except when the shutdown condition is met is based on the assumption that it is attempting to

Average Total Cost is

If a firm's marginal cost is greater than its average total cost, its average total cost is

If MR<MC the firm should produce

-Refer to Table 4.1, Box F should be filled with

When a firm has no competitors, in order to sell more of the good

Which of the following algebraic expressions is inaccurate

-Refer to Table 4.2, Box C should be filled with

If the total cost of producing 19 wizzbies is $38,000 and the total cost of producing 20 wizzbies is $39,000, the average total cost of producing the 19th wizzbie is approximately

-Refer to Table 4.2, Box J should be filled with

-Refer to Table 4.2, Box B should be filled with

When a firm has many competitors selling the same good, in order to sell more of the good

If the market price for a good produced by a price taking firm is $7, the firm's total revenue is

When you derive the marginal and average product of labor curve

Given the production function and total cost function shown in Chapter 4, as production increases, total costs

If the total cost of producing 19 wizzbies is $38,000 and the total cost of producing 20 wizzbies is $39,000, the marginal cost of producing the 20th wizzbie is approximately

Costs which increase with an increase in output are called

Economics: the Study of Opportunity Cost

Supply and Demand

The Concept of Elasticity and Consumer and Producer Surplus

Perfect Competition, Monopoly, and Economic Versus Normal Profit

Every Macroeconomic Word You Ever Heard: Gross Domestic Product, Inflation, Unemployment, Recession, Depression

Interest Rates and Present Value

Aggregate Demand and Aggregate Supply

Fiscal Policy

Monetary Policy

Federal Spending

Federal Deficits, Surpluses, and the National Debt

The Housing Bubble

The Recession of 2007-2009: Causes and Policy Responses

Is Economic Stagnation the New Normal

Is the Fiscalsky Falling: An Examination of Unfunded Social Security, Medicare, and State and Local Pension Liabilities

International Trade: Does It Jeopardize American Jobs

International Finance and Exchange Rates

The European Debt Crisis

Economic Growth and Development

Nafta, Gatt, Wto: Are Trade Agreements Good for Us

The Line Between Legal and Illegal Goods

Natural Resources, the Environment, and Climate Change

Health Care

Government-Provided Health Insurance: Medicaid, Medicare, and the Child Health Insurance Program

The Economics of Prescription Drugs

So You Want to Be a Lawyer: Economics and the Law

The Economics of Crime

Antitrust

The Economics of Race and Discrimination

Income and Wealth Inequality

Farm Policy

Minimum Wage

Ticket Brokers and Ticket Scalping

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Economics of K-12 Education

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Poverty and Welfare

Head Start

Social Security

Personal Income Taxes

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If We Build It, Will They Come and Other Sports Questions

The Stock Market Crashes

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Walmart: Always Low Prices and Low Wages- Always

The Economic Impact of Casino Gambling

The Economics of Terrorism

Filters

Suppose the market price for a price taking firm is known to be $10, the total revenue accruing to it if it sells 100 is and the total revenue accruing to it if it sells 200 is .