Question 1

Average Variable 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 2

Suppose the market price for a price taking firm is known to be $5, 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) $5, $5 
B) $100, $200 
C) $500, $1000 
D) $500, $500 
A) $5, $5 
B) $100, $200 
C) $500, $1000 
D) $500, $500

Question 3

If the demand curve for a firm's output is P=100-2Q, the total revenue curve will be

Accepted Answer

A) TR=100-2Q 
B) TR=100Q-Q2 
C) TR=100Q-2Q2 
D) TR=2P*Q 
A) TR=100-2Q 
B) TR=100Q-Q2 
C) TR=100Q-2Q2 
D) TR=2P*Q

Question 4

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

Accepted Answer

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

Question 5

A production function begins at the origin because

Accepted Answer

A) A firm can always choose to have no employees. 
B) A firm with no employees will have no output. 
C) It takes a certain number of employees to produce anything. 
D) When a firm divides tasks they can get more output. 
A) A firm can always choose to have no employees. 
B) A firm with no employees will have no output. 
C) It takes a certain number of employees to produce anything. 
D) When a firm divides tasks they can get more output.

Question 6

The Average Total Cost curve will be cut by the Marginal Cost curve from below as long as

Accepted Answer

A) fixed costs are rising. 
B) marginal costs eventually increase. 
C) average costs are decreasing. 
D) marginal costs continually decrease. 
A) fixed costs are rising. 
B) marginal costs eventually increase. 
C) average costs are decreasing. 
D) marginal costs continually decrease.

Question 7

Suppose a lawn-mowing business has a mower for which it paid $1000 and workers for which they pay $10 per hour. Suppose each mower can mow a lawn per hour.

Accepted Answer

A) Their total fixed cost is $1000. 
B) Their variable cost per lawn is $10 + $1000/lawns mowed. 
C) Their total fixed cost is $1000/lawns mowed. 
D) Their total fixed cost is $10 per lawn mowed. 
A) Their total fixed cost is $1000. 
B) Their variable cost per lawn is $10 + $1000/lawns mowed. 
C) Their total fixed cost is $1000/lawns mowed. 
D) Their total fixed cost is $10 per lawn mowed.

Question 8

If the demand curve for a firm's output is P=200-10Q, the total revenue curve will be

Accepted Answer

A) TR=200-2Q 
B) TR=200Q-10Q2 
C) TR=200Q-200Q2 
D) TR=10P*Q 
A) TR=200-2Q 
B) TR=200Q-10Q2 
C) TR=200Q-200Q2 
D) TR=10P*Q

Question 9

Given the production function and total cost function shown in Chapter 4, as production increases, average fixed 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 10

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

Accepted Answer

A) $5.00. 
B) $7.50. 
C) $12.50. 
D) $2 
A) $5.00. 
B) $7.50. 
C) $12.50. 
D) $2

Question 11

The quantity where TR-TC is the greatest is also the quantity where

Accepted Answer

A) TC is minimized. 
B) TR is maximized. 
C) TC and TR have the same slope. 
D) TC=TR. 
A) TC is minimized. 
B) TR is maximized. 
C) TC and TR have the same slope. 
D) TC=TR.

Question 12

Suppose a lawn-mowing business has a mower for which it paid $1000 and workers for which they pay $10 per hour. Suppose each mower can mow a lawn per hour.

Accepted Answer

A) Their average fixed cost is $1000. 
B) Their variable cost per lawn is $10 + $1000/lawns mowed. 
C) Their average fixed cost is $1000/lawns mowed. 
D) Their average fixed cost is $10 per lawn mowed. 
A) Their average fixed cost is $1000. 
B) Their variable cost per lawn is $10 + $1000/lawns mowed. 
C) Their average fixed cost is $1000/lawns mowed. 
D) Their average fixed cost is $10 per lawn mowed.

Question 13

Which type of firm has no control over its price

Accepted Answer

A) price taker. 
B) price maker. 
C) price setter. 
D) zero price setter. 
A) price taker. 
B) price maker. 
C) price setter. 
D) zero price setter.

Question 14

If the market price for a good produced by a price taking firm is $8, the firm's total revenue is

Accepted Answer

A) a flat line at P=$8. 
B) parabolic. 
C) downward sloping. 
D) an upward sloping line beginning at the origin and having a slope of 8. 
A) a flat line at P=$8. 
B) parabolic. 
C) downward sloping. 
D) an upward sloping line beginning at the origin and having a slope of 8.

Question 15

An increase in the demand for a good that is produced by many firms will

Accepted Answer

A) increase all of their respective marginal cost curves. 
B) increase all of their respective marginal revenue curves. 
C) decrease all of their respective marginal cost curves. 
D) decrease all of their respective marginal revenue curves. 
A) increase all of their respective marginal cost curves. 
B) increase all of their respective marginal revenue curves. 
C) decrease all of their respective marginal cost curves. 
D) decrease all of their respective marginal revenue curves.

Question 16

To maximize profit a firm will find the

Accepted Answer

A) Quantity where TR=TC 
B) Quantity where MR=MC (with no other consideration) 
C) Quantity where MR=MC unless P<AVC in which case Q=0 
D) Price where MR=MC 
A) Quantity where TR=TC 
B) Quantity where MR=MC (with no other consideration) 
C) Quantity where MR=MC unless P<AVC in which case Q=0 
D) Price where MR=MC

Question 17

If the demand curve for a firm's output is P=100-5Q, the marginal revenue curve will be

Accepted Answer

A) MR=100-5Q 
B) MR=100-10Q 
C) MR=20-Q 
D) MR=20-5Q 
A) MR=100-5Q 
B) MR=100-10Q 
C) MR=20-Q 
D) MR=20-5Q

Question 18

The gap between the ATC and AVC curve will

Accepted Answer

A) Shrink to nearly zero 
B) Shrink and go negative 
C) Growth 
D) Remain the same 
A) Shrink to nearly zero 
B) Shrink and go negative 
C) Growth 
D) Remain the same

Question 19

-In Figure 4.2, the reason that point A is not through the origin but starts up on the vertical axis is that

Accepted Answer

A) there are fixed outputs. 
B) there are fixed costs. 
C) there is no cost associated with producing no output. 
D) there is waste. 
A) there are fixed outputs. 
B) there are fixed costs. 
C) there is no cost associated with producing no output. 
D) there is waste.

Question 20

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

Accepted Answer

A) $0 
B) $2. 
C) $17. 
D) $27. 
A) $0 
B) $2. 
C) $17. 
D) $27.

Exam 4: Firm Production, Cost, and Revenue

Average Variable Cost is

Suppose the market price for a price taking firm is known to be $5, the total revenue accruing to it if it sells 100 is ____ and the total revenue accruing to it if it sells 200 is ____.

If the demand curve for a firm's output is P=100-2Q, the total revenue curve will be

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

A production function begins at the origin because

The Average Total Cost curve will be cut by the Marginal Cost curve from below as long as

Suppose a lawn-mowing business has a mower for which it paid $1000 and workers for which they pay $10 per hour. Suppose each mower can mow a lawn per hour.

If the demand curve for a firm's output is P=200-10Q, the total revenue curve will be

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

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

The quantity where TR-TC is the greatest is also the quantity where

Suppose a lawn-mowing business has a mower for which it paid $1000 and workers for which they pay $10 per hour. Suppose each mower can mow a lawn per hour.

Which type of firm has no control over its price

If the market price for a good produced by a price taking firm is $8, the firm's total revenue is

An increase in the demand for a good that is produced by many firms will

To maximize profit a firm will find the

If the demand curve for a firm's output is P=100-5Q, the marginal revenue curve will be

The gap between the ATC and AVC curve will

-In Figure 4.2, the reason that point A is not through the origin but starts up on the vertical axis is that

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

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

Rent Control

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

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Suppose the market price for a price taking firm is known to be $5, the total revenue accruing to it if it sells 100 is and the total revenue accruing to it if it sells 200 is .