Question 1

The opportunity cost of owning and using a firm's capital is defined as the capital's

Accepted Answer

A) variable cost. 
B) fixed cost. 
C) economic depreciation. 
D) nonpayment depreciation. 
E) explicit cost. 
A) variable cost. 
B) fixed cost. 
C) economic depreciation. 
D) nonpayment depreciation. 
E) explicit cost.

Question 2

Professor Rush decided to quit teaching economics and opens a shoe store out at the mall.He gave up an annual income of $50,000 to open the store.A year after opening the shoe store,the total revenue for the year was $200,000.Rush's expenses were $30,000 for labor,rent was $18,000,and utilities were $1,200.He also had to purchase new shoes from manufacturers,at a cost of $60,000,which was financed by cashing in his savings of $60,000 that had been in a bank earning 8 percent per year.The normal profit from operating a shoe store in the mall is $20,000.Determine Professor Rush's explicit costs,implicit costs,and economic profit.

Accepted Answer

The explicit costs are the cost of labor

Question 3

Which of the following costs can be positive when output is zero?

Accepted Answer

A) average variable cost 
B) total variable cost 
C) marginal cost 
D) total fixed cost 
E) None of the above because when output is zero there are no costs. 
A) average variable cost 
B) total variable cost 
C) marginal cost 
D) total fixed cost 
E) None of the above because when output is zero there are no costs.

Question 4

Because the amount of labor a firm employs can be changed,the cost of labor is known as

Accepted Answer

A) minimum cost. 
B) variable cost. 
C) maximum cost. 
D) fixed cost. 
E) an unavoidable cost. 
A) minimum cost. 
B) variable cost. 
C) maximum cost. 
D) fixed cost. 
E) an unavoidable cost.

Question 5

Diseconomies of scale is a result of

Accepted Answer

A) mismanagement. 
B) difficulties of coordinating and controlling a large enterprise. 
C) specialization of labor,capital,and management. 
D) technological progress. 
E) larger fixed costs as the firm's production increases. 
A) mismanagement. 
B) difficulties of coordinating and controlling a large enterprise. 
C) specialization of labor,capital,and management. 
D) technological progress. 
E) larger fixed costs as the firm's production increases.

Question 6

-Anna owns a dog grooming salon in Brunswick,Georgia.The above table has Anna's total product schedule.Anna pays each worker $300 per week and she pays rent of $600 a week for her salon.These are her only costs.When Anna has a staff of 6 workers,her average total cost equals

Accepted Answer

A) $2,400. 
B) $300. 
C) $7.50. 
D) $10.00. 
E) $4,200. 
A) $2,400. 
B) $300. 
C) $7.50. 
D) $10.00. 
E) $4,200.

Question 7

-The table above gives the cost schedule for The X Firm.The data show that The X Firm's ________ curve is ________.

Accepted Answer

A) ATC;U-shaped because the firm fixed costs are spread over larger amounts of output and the firm experiences decreasing marginal returns 
B) AFC;U-shaped because the firm spreads its fixed costs over larger and large amounts of output 
C) AVC;always declining because costs are divided across ever-increasing amounts of output 
D) MC;U-shaped because explicit costs exceed implicit costs 
E) ATC;U-shaped because output increases as costs increase 
A) ATC;U-shaped because the firm fixed costs are spread over larger amounts of output and the firm experiences decreasing marginal returns 
B) AFC;U-shaped because the firm spreads its fixed costs over larger and large amounts of output 
C) AVC;always declining because costs are divided across ever-increasing amounts of output 
D) MC;U-shaped because explicit costs exceed implicit costs 
E) ATC;U-shaped because output increases as costs increase

Question 8

Increasing marginal returns occur when the

Accepted Answer

A) average product of an additional worker is less than the average product of the previous worker. 
B) marginal product of an additional worker exceeds the marginal product of the previous worker. 
C) marginal product of labor is less than the average product of labor. 
D) total output of the firm is at its maximum. 
E) total product curve is horizontal. 
A) average product of an additional worker is less than the average product of the previous worker. 
B) marginal product of an additional worker exceeds the marginal product of the previous worker. 
C) marginal product of labor is less than the average product of labor. 
D) total output of the firm is at its maximum. 
E) total product curve is horizontal.

Question 9

In the long run all costs are variable costs.Why?

Accepted Answer

The long run is defined as the time fram

Question 10

-Anna owns a dog grooming salon in Brunswick,Georgia.The above table has Anna's total product schedule.Anna pays each worker $300 per week and she pays rent of $600 a week for her salon.These are her only costs.When Anna has a staff of 2 workers,her average fixed cost equals

Accepted Answer

A) $600. 
B) $6.00. 
C) $7.50. 
D) $10.00. 
E) $2,400. 
A) $600. 
B) $6.00. 
C) $7.50. 
D) $10.00. 
E) $2,400.

Question 11

-Kenya owns a lawn mowing company.His total product schedule is in the above table.When 4 workers are employed,the average product is ________ lawns mowed per week.

Accepted Answer

A) 80 
B) 25 
C) 20 
D) 5 
E) 320 
A) 80 
B) 25 
C) 20 
D) 5 
E) 320

Question 12

An insurance agent rents a building and has a three-year lease.An increase in the rent for the building increases the agent's

Accepted Answer

A) total cost and average variable cost. 
B) total variable cost and average variable cost. 
C) total fixed cost and total variable cost. 
D) total fixed cost and average fixed cost. 
E) total variable cost and total cost. 
A) total cost and average variable cost. 
B) total variable cost and average variable cost. 
C) total fixed cost and total variable cost. 
D) total fixed cost and average fixed cost. 
E) total variable cost and total cost.

Question 13

-The table above shows a total product schedule.Suppose that labor costs $20 per worker and fixed costs are $60.The total variable cost of producing 80 units equals

Accepted Answer

A) less than $50. 
B) more than $50 and less than $70. 
C) more than $70 and less than $90. 
D) more than $90 and less than $120. 
E) more than $120. 
A) less than $50. 
B) more than $50 and less than $70. 
C) more than $70 and less than $90. 
D) more than $90 and less than $120. 
E) more than $120.

Question 14

When the long-run average cost curve is downward sloping,

Accepted Answer

A) economies of scale are present. 
B) diseconomies of scale are present. 
C) the firm experiences constant returns to scale. 
D) the average fixed cost curve must be upward sloping. 
E) The premise of the question is wrong because long-run average cost curves never slope downward. 
A) economies of scale are present. 
B) diseconomies of scale are present. 
C) the firm experiences constant returns to scale. 
D) the average fixed cost curve must be upward sloping. 
E) The premise of the question is wrong because long-run average cost curves never slope downward.

Question 15

-The above table gives some production and cost information for Flaming Fernando's,a restaurant that sells Fiery Frijoles.What is the total fixed cost of producing 4,500 frijoles?

Accepted Answer

A) $1000 
B) $8000 
C) $9000 
D) $2,000 
E) More information is needed to determine the answer. 
A) $1000 
B) $8000 
C) $9000 
D) $2,000 
E) More information is needed to determine the answer.

Question 16

-Kenya owns a lawn mowing company.His total product schedule is in the above table.The marginal product of the fourth worker is ________ lawns mowed per week.

Accepted Answer

A) 80 
B) 25 
C) 20 
D) 5 
E) 320 
A) 80 
B) 25 
C) 20 
D) 5 
E) 320

Question 17

The total product is 10 units.The average total cost is $30 and the average fixed cost is $10.What is the amount of the total variable cost?

Accepted Answer

A) $20 
B) $200 
C) $300 
D) $10 
E) It is impossible to determine with the information given. 
A) $20 
B) $200 
C) $300 
D) $10 
E) It is impossible to determine with the information given.

Question 18

Explain how new technologies,which increase productivity,affect the average variable cost,average total cost,and marginal cost curves.

Accepted Answer

A technological change that increases pr

Question 19

-Anna owns a dog grooming salon in Brunswick,Georgia.The above table has Anna's total product schedule.Anna pays each worker $300 per week and she pays rent of $600 a week for her salon.These are her only costs.When Anna has a staff of 2 workers,her average variable cost equals

Accepted Answer

A) $2,400. 
B) $300. 
C) $6.00. 
D) $10.00. 
E) $600. 
A) $2,400. 
B) $300. 
C) $6.00. 
D) $10.00. 
E) $600.

Question 20

In a graph of a typical firm's AFC,ATC,and AVC curves,the

Accepted Answer

A) AVC curve lies above the ATC curve. 
B) ATC curve lies below the AFC curve. 
C) distance between the ATC curve and the AVC curve equals the AFC. 
D) distance between the AVC curve and the AFC curve equals the ATC. 
E) AVC curve crosses the MC curve at the point where the MC is at its minimum. 
A) AVC curve lies above the ATC curve. 
B) ATC curve lies below the AFC curve. 
C) distance between the ATC curve and the AVC curve equals the AFC. 
D) distance between the AVC curve and the AFC curve equals the ATC. 
E) AVC curve crosses the MC curve at the point where the MC is at its minimum.

The opportunity cost of owning and using a firm's capital is defined as the capital's

Which of the following costs can be positive when output is zero?

Because the amount of labor a firm employs can be changed,the cost of labor is known as

Diseconomies of scale is a result of

-Anna owns a dog grooming salon in Brunswick,Georgia.The above table has Anna's total product schedule.Anna pays each worker $300 per week and she pays rent of $600 a week for her salon.These are her only costs.When Anna has a staff of 6 workers,her average total cost equals

-The table above gives the cost schedule for The X Firm.The data show that The X Firm's curve is .

Increasing marginal returns occur when the

In the long run all costs are variable costs.Why?

-Anna owns a dog grooming salon in Brunswick,Georgia.The above table has Anna's total product schedule.Anna pays each worker $300 per week and she pays rent of $600 a week for her salon.These are her only costs.When Anna has a staff of 2 workers,her average fixed cost equals

-Kenya owns a lawn mowing company.His total product schedule is in the above table.When 4 workers are employed,the average product is ________ lawns mowed per week.

An insurance agent rents a building and has a three-year lease.An increase in the rent for the building increases the agent's

-The table above shows a total product schedule.Suppose that labor costs $20 per worker and fixed costs are $60.The total variable cost of producing 80 units equals

When the long-run average cost curve is downward sloping,

-The above table gives some production and cost information for Flaming Fernando's,a restaurant that sells Fiery Frijoles.What is the total fixed cost of producing 4,500 frijoles?

-Kenya owns a lawn mowing company.His total product schedule is in the above table.The marginal product of the fourth worker is ________ lawns mowed per week.

The total product is 10 units.The average total cost is $30 and the average fixed cost is $10.What is the amount of the total variable cost?

Explain how new technologies,which increase productivity,affect the average variable cost,average total cost,and marginal cost curves.

-Anna owns a dog grooming salon in Brunswick,Georgia.The above table has Anna's total product schedule.Anna pays each worker $300 per week and she pays rent of $600 a week for her salon.These are her only costs.When Anna has a staff of 2 workers,her average variable cost equals

In a graph of a typical firm's AFC,ATC,and AVC curves,the

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

The opportunity cost of owning and using a firm's capital is defined as the capital's

Which of the following costs can be positive when output is zero?

Because the amount of labor a firm employs can be changed,the cost of labor is known as

Diseconomies of scale is a result of

-Anna owns a dog grooming salon in Brunswick,Georgia.The above table has Anna's total product schedule.Anna pays each worker $300 per week and she pays rent of $600 a week for her salon.These are her only costs.When Anna has a staff of 6 workers,her average total cost equals

-The table above gives the cost schedule for The X Firm.The data show that The X Firm's ________ curve is ________.

Increasing marginal returns occur when the

In the long run all costs are variable costs.Why?

-Anna owns a dog grooming salon in Brunswick,Georgia.The above table has Anna's total product schedule.Anna pays each worker $300 per week and she pays rent of $600 a week for her salon.These are her only costs.When Anna has a staff of 2 workers,her average fixed cost equals

-Kenya owns a lawn mowing company.His total product schedule is in the above table.When 4 workers are employed,the average product is ________ lawns mowed per week.

An insurance agent rents a building and has a three-year lease.An increase in the rent for the building increases the agent's

-The table above shows a total product schedule.Suppose that labor costs $20 per worker and fixed costs are $60.The total variable cost of producing 80 units equals

When the long-run average cost curve is downward sloping,

-The above table gives some production and cost information for Flaming Fernando's,a restaurant that sells Fiery Frijoles.What is the total fixed cost of producing 4,500 frijoles?

-Kenya owns a lawn mowing company.His total product schedule is in the above table.The marginal product of the fourth worker is ________ lawns mowed per week.

The total product is 10 units.The average total cost is $30 and the average fixed cost is $10.What is the amount of the total variable cost?

Explain how new technologies,which increase productivity,affect the average variable cost,average total cost,and marginal cost curves.

-Anna owns a dog grooming salon in Brunswick,Georgia.The above table has Anna's total product schedule.Anna pays each worker $300 per week and she pays rent of $600 a week for her salon.These are her only costs.When Anna has a staff of 2 workers,her average variable cost equals

In a graph of a typical firm's AFC,ATC,and AVC curves,the

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 gives the cost schedule for The X Firm.The data show that The X Firm's curve is .