Question 1

Marginal cost

Accepted Answer

A) is the difference between total cost and total fixed cost. 
B) increases as the marginal product of labor increases. 
C) decreases as the average product of labor increases. 
D) is the change in total cost arising from a one-unit increase in output. 
E) equals the change in variable cost divided by the change in fixed cost when output increases by one unit. 
A) is the difference between total cost and total fixed cost. 
B) increases as the marginal product of labor increases. 
C) decreases as the average product of labor increases. 
D) is the change in total cost arising from a one-unit increase in output. 
E) equals the change in variable cost divided by the change in fixed cost when output increases by one unit.

Question 2

As we observe the cost curves graph,we see that the

Accepted Answer

A) MC curve intersects the ATC curve at its maximum. 
B) MC curve cannot be U-shaped. 
C) ATC curve always has a negative slope. 
D) MC curve intersects the AVC curve and ATC curve at their minimums. 
E) MC constantly falls as output increases. 
A) MC curve intersects the ATC curve at its maximum. 
B) MC curve cannot be U-shaped. 
C) ATC curve always has a negative slope. 
D) MC curve intersects the AVC curve and ATC curve at their minimums. 
E) MC constantly falls as output increases.

Question 3

A firm decreases its scale of operation and discovers that its long-run average costs decrease.Which of the following does this indicate?

Accepted Answer

A) Labor's marginal product has increased. 
B) Diseconomies of scale were absent in the larger plant. 
C) The firm's scale initially was so large that it experienced diseconomies of scale. 
D) The firm's scale initially was too small to experience economies of scale. 
E) Its long-run marginal cost was smaller with the larger plant than with the smaller plant. 
A) Labor's marginal product has increased. 
B) Diseconomies of scale were absent in the larger plant. 
C) The firm's scale initially was so large that it experienced diseconomies of scale. 
D) The firm's scale initially was too small to experience economies of scale. 
E) Its long-run marginal cost was smaller with the larger plant than with the smaller plant.

Question 4

If we know the amount of total cost,average total cost,average variable cost,and marginal cost for each level of output,how can we find the level of output where the marginal product is the greatest?

Accepted Answer

A) It is the output for which the marginal cost equals average variable cost. 
B) It is the output for which the total cost is maximized. 
C) It is the output for which the marginal cost is minimized. 
D) It is the output for which the marginal cost equals average total cost. 
E) There is no way to find where marginal product is the greatest knowing only cost data. 
A) It is the output for which the marginal cost equals average variable cost. 
B) It is the output for which the total cost is maximized. 
C) It is the output for which the marginal cost is minimized. 
D) It is the output for which the marginal cost equals average total cost. 
E) There is no way to find where marginal product is the greatest knowing only cost data.

Question 5

Which of the following is a fixed cost for ACME manufacturing?

Accepted Answer

A) wages paid to labor 
B) the annual fire and theft insurance premiums 
C) the utility bill 
D) raw material costs 
E) the cost of shipping its product to market 
A) wages paid to labor 
B) the annual fire and theft insurance premiums 
C) the utility bill 
D) raw material costs 
E) the cost of shipping its product to market

Question 6

If a company triples its output and its average cost decreases,then the firm is definitely experiencing

Accepted Answer

A) diseconomies of scale. 
B) decreasing marginal returns. 
C) increasing marginal returns. 
D) economies of scale. 
E) Both answers C and D are correct. 
A) diseconomies of scale. 
B) decreasing marginal returns. 
C) increasing marginal returns. 
D) economies of scale. 
E) Both answers C and D are correct.

Question 7

-Paulette owns a pizza parlor.Her total cost schedule is in the above table.Her total variable cost of producing four pizzas per hour is

Accepted Answer

A) $20. 
B) $49. 
C) $51. 
D) $71. 
E) Some amount,but more information is needed to determine this total variable cost. 
A) $20. 
B) $49. 
C) $51. 
D) $71. 
E) Some amount,but more information is needed to determine this total variable cost.

Question 8

Average total cost equals

Accepted Answer

A) marginal cost divided by output. 
B) average fixed cost plus average variable cost. 
C) total fixed cost plus total variable cost. 
D) marginal cost plus opportunity cost. 
E) marginal cost multiplied by the quantity of output. 
A) marginal cost divided by output. 
B) average fixed cost plus average variable cost. 
C) total fixed cost plus total variable cost. 
D) marginal cost plus opportunity cost. 
E) marginal cost multiplied by the quantity of output.

Question 9

In the long run,if 1,000 units are produced at a cost of $8,000 and 1,200 units at a cost of $9,200,then over this range of output there are

Accepted Answer

A) constant economies of scale. 
B) constant returns to scale. 
C) diseconomies of scale. 
D) economies of scale. 
E) constant diseconomies of scale. 
A) constant economies of scale. 
B) constant returns to scale. 
C) diseconomies of scale. 
D) economies of scale. 
E) constant diseconomies of scale.

Question 10

-The table above shows the total product schedule for The X Firm.Decreasing marginal returns occur with the ________ worker because ________.

Accepted Answer

A) 5th;the marginal product of labor for the 5th worker is less than the marginal product of the 4th worker 
B) 5th;the average product of labor is also declining 
C) 4th;output reaches is maximum 
D) 6th;output starts to decline 
E) 6th;the marginal product of labor is greater than the average product of labor 
A) 5th;the marginal product of labor for the 5th worker is less than the marginal product of the 4th worker 
B) 5th;the average product of labor is also declining 
C) 4th;output reaches is maximum 
D) 6th;output starts to decline 
E) 6th;the marginal product of labor is greater than the average product of labor

Question 11

The production and cost information provided in the table above for Flaming Fernando's,a restaurant that sells Fiery Frijoles,is for the

Accepted Answer

A) short run because there are no variable costs. 
B) short run because there is a fixed cost. 
C) long run because there are no variable costs. 
D) long run because there are no fixed costs. 
E) short run and long run because the total cost increases as production increases. 
A) short run because there are no variable costs. 
B) short run because there is a fixed cost. 
C) long run because there are no variable costs. 
D) long run because there are no fixed costs. 
E) short run and long run because the total cost increases as production increases.

Question 12

Jennifer owns a pig farm near Salina,Kansas.Last year she earned $39,000 in total revenue while incurring $38,000 in explicit costs.She could have earned $27,000 as a teacher in Salina.These are all her revenue and costs.Therefore Jennifer earned an

Accepted Answer

A) accounting profit of $1,000 but incurred an economic loss of $26,000. 
B) accounting profit of $1,000 but incurred an economic loss of $65,000. 
C) accounting profit of $1,000 but incurred an economic loss of $38,000. 
D) economic profit of $1,000. 
E) None of the above answers is correct. 
A) accounting profit of $1,000 but incurred an economic loss of $26,000. 
B) accounting profit of $1,000 but incurred an economic loss of $65,000. 
C) accounting profit of $1,000 but incurred an economic loss of $38,000. 
D) economic profit of $1,000. 
E) None of the above answers is correct.

Question 13

If another worker is hired with a marginal product greater than the previously hired worker,which of the following will be true?

Accepted Answer

A) Total costs will decrease. 
B) Fixed costs will decrease. 
C) Marginal cost will increase. 
D) Marginal cost will decrease. 
E) Average fixed costs will increase. 
A) Total costs will decrease. 
B) Fixed costs will decrease. 
C) Marginal cost will increase. 
D) Marginal cost will decrease. 
E) Average fixed costs will increase.

Question 14

Cost curves shift if
I.technology changes.
Ii.the prices of factors of production change.
Iii.productivity changes.

Accepted Answer

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

Question 15

If 25 workers can pick 100 flats of strawberries per hour,then average product is

Accepted Answer

A) 100 flats per hour. 
B) 125 flats per hour. 
C) 75 flats per hour. 
D) 4 flats per hour. 
E) More information is needed about how many flats 24 workers can pick. 
A) 100 flats per hour. 
B) 125 flats per hour. 
C) 75 flats per hour. 
D) 4 flats per hour. 
E) More information is needed about how many flats 24 workers can pick.

Question 16

The vertical distance between the total cost curve and the total variable cost curve ________ as output increases and the vertical distance between the average total cost curve and average variable cost curve ________ as output increases.

Accepted Answer

A) is constant;decreases 
B) decreases;is constant 
C) increases;decreases 
D) decreases;increases 
E) decreases;decreases 
A) is constant;decreases 
B) decreases;is constant 
C) increases;decreases 
D) decreases;increases 
E) decreases;decreases

Question 17

Normal profit is a(n)________ cost because ________.

Accepted Answer

A) implicit;it represents the cost of not running another firm 
B) explicit;a firm must pay income taxes on its profit 
C) implicit;it represents the cost of economic depreciation 
D) accounting;wages are considered an explicit cost 
E) depreciation;the equipment the firm owns wears out over time 
A) implicit;it represents the cost of not running another firm 
B) explicit;a firm must pay income taxes on its profit 
C) implicit;it represents the cost of economic depreciation 
D) accounting;wages are considered an explicit cost 
E) depreciation;the equipment the firm owns wears out over time

Question 18

What are diseconomies of scale and why might they occur?

Accepted Answer

Diseconomies of scale are features of th

Question 19

Which of the following is an explicit cost in Jim's business venture?

Accepted Answer

A) the salary Jim could have earned at another job 
B) the interest Jim does not earn because he invested his savings in his business 
C) the wages Jim pays his workers 
D) Jim's normal profit 
E) Answers A,B,and D are correct. 
A) the salary Jim could have earned at another job 
B) the interest Jim does not earn because he invested his savings in his business 
C) the wages Jim pays his workers 
D) Jim's normal profit 
E) Answers A,B,and D are correct.

Question 20

Normal profit is

Accepted Answer

A) part of the firm's opportunity costs. 
B) the same as economic profits. 
C) part of the firm's explicit costs. 
D) Answers A and B are correct. 
E) Answers A and C are correct. 
A) part of the firm's opportunity costs. 
B) the same as economic profits. 
C) part of the firm's explicit costs. 
D) Answers A and B are correct. 
E) Answers A and C are correct.

Marginal cost

As we observe the cost curves graph,we see that the

A firm decreases its scale of operation and discovers that its long-run average costs decrease.Which of the following does this indicate?

If we know the amount of total cost,average total cost,average variable cost,and marginal cost for each level of output,how can we find the level of output where the marginal product is the greatest?

Which of the following is a fixed cost for ACME manufacturing?

If a company triples its output and its average cost decreases,then the firm is definitely experiencing

-Paulette owns a pizza parlor.Her total cost schedule is in the above table.Her total variable cost of producing four pizzas per hour is

Average total cost equals

In the long run,if 1,000 units are produced at a cost of $8,000 and 1,200 units at a cost of $9,200,then over this range of output there are

-The table above shows the total product schedule for The X Firm.Decreasing marginal returns occur with the worker because .

The production and cost information provided in the table above for Flaming Fernando's,a restaurant that sells Fiery Frijoles,is for the

Jennifer owns a pig farm near Salina,Kansas.Last year she earned $39,000 in total revenue while incurring $38,000 in explicit costs.She could have earned $27,000 as a teacher in Salina.These are all her revenue and costs.Therefore Jennifer earned an

If another worker is hired with a marginal product greater than the previously hired worker,which of the following will be true?

Cost curves shift if I.technology changes. Ii.the prices of factors of production change. Iii.productivity changes.

If 25 workers can pick 100 flats of strawberries per hour,then average product is

The vertical distance between the total cost curve and the total variable cost curve as output increases and the vertical distance between the average total cost curve and average variable cost curve as output increases.

Normal profit is a(n) cost because .

What are diseconomies of scale and why might they occur?

Which of the following is an explicit cost in Jim's business venture?

Normal profit is

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, education, and Health Care

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Exam 10: Production and Cost

Marginal cost

As we observe the cost curves graph,we see that the

A firm decreases its scale of operation and discovers that its long-run average costs decrease.Which of the following does this indicate?

If we know the amount of total cost,average total cost,average variable cost,and marginal cost for each level of output,how can we find the level of output where the marginal product is the greatest?

Which of the following is a fixed cost for ACME manufacturing?

If a company triples its output and its average cost decreases,then the firm is definitely experiencing

-Paulette owns a pizza parlor.Her total cost schedule is in the above table.Her total variable cost of producing four pizzas per hour is

Average total cost equals

In the long run,if 1,000 units are produced at a cost of $8,000 and 1,200 units at a cost of $9,200,then over this range of output there are

-The table above shows the total product schedule for The X Firm.Decreasing marginal returns occur with the ________ worker because ________.

The production and cost information provided in the table above for Flaming Fernando's,a restaurant that sells Fiery Frijoles,is for the

Jennifer owns a pig farm near Salina,Kansas.Last year she earned $39,000 in total revenue while incurring $38,000 in explicit costs.She could have earned $27,000 as a teacher in Salina.These are all her revenue and costs.Therefore Jennifer earned an

If another worker is hired with a marginal product greater than the previously hired worker,which of the following will be true?

Cost curves shift if I.technology changes. Ii.the prices of factors of production change. Iii.productivity changes.

If 25 workers can pick 100 flats of strawberries per hour,then average product is

The vertical distance between the total cost curve and the total variable cost curve ________ as output increases and the vertical distance between the average total cost curve and average variable cost curve ________ as output increases.

Normal profit is a(n)________ cost because ________.

What are diseconomies of scale and why might they occur?

Which of the following is an explicit cost in Jim's business venture?

Normal profit is

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, education, and Health Care

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

-The table above shows the total product schedule for The X Firm.Decreasing marginal returns occur with the worker because .

The vertical distance between the total cost curve and the total variable cost curve as output increases and the vertical distance between the average total cost curve and average variable cost curve as output increases.

Normal profit is a(n) cost because .