Question 1

In a figure showing the average total cost curve and the average variable cost curve,the vertical distance between the two curves is equal to the

Accepted Answer

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

Question 2

Rufus runs a skunk-skinning service in West Virginia.He employs skinners at a wage rate of $240 a week for each one.He leases the shack where his workers work for $200 per week.The rent is fixed for the next two years.Last week his 10 employees managed to skin a total of 300 skunks.
a.What is the average product of labor for Rufus's company?
b.What is Rufus's total variable cost per week?
c.What is the average variable cost for Rufus's company?
d.If Rufus adds his brother Jethro to his staff,at a wage rate of $240 a week,and his company can now skin 310 skunks per week,what is Rufus's new average variable cost?

Accepted Answer

a.The average product of labor is 30 sku

Question 3

-Paulette owns a pizza parlor.Her total cost schedule is in the above table.Her total fixed cost is equal to

Accepted Answer

A) $20. 
B) $35. 
C) $79. 
D) $85. 
E) Some amount,but more information is needed to determine her fixed cost. 
A) $20. 
B) $35. 
C) $79. 
D) $85. 
E) Some amount,but more information is needed to determine her fixed cost.

Question 4

What do economists mean when they say that a firm's plant is fixed?

Accepted Answer

The phrase that a "firm's plant is fixed

Question 5

Marginal cost is equal to

Accepted Answer

A) the total cost of a firm's production. 
B) total cost minus fixed cost. 
C) a cost that is not related to the quantity produced. 
D) the change in total cost that results from a one-unit increase in output. 
E) the change in fixed cost that results from a one-unit increase in output. 
A) the total cost of a firm's production. 
B) total cost minus fixed cost. 
C) a cost that is not related to the quantity produced. 
D) the change in total cost that results from a one-unit increase in output. 
E) the change in fixed cost that results from a one-unit increase in output.

Question 6

-The table above shows the total product schedule for Rick's Lawn Service,a yard care company.The average product of labor ________ when the 7th worker is hired.

Accepted Answer

A) reaches its maximum 
B) equals 1 lawn mowed 
C) equals 28 lawns mowed 
D) equals 4 lawns mowed 
E) equals 2 lawns mowed 
A) reaches its maximum 
B) equals 1 lawn mowed 
C) equals 28 lawns mowed 
D) equals 4 lawns mowed 
E) equals 2 lawns mowed

Question 7

The figure above shows some of a firm's cost curves.
-Based on the figure above,curve B is the firm's

Accepted Answer

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

Question 8

The short run is

Accepted Answer

A) less than one year. 
B) the time frame in which all resources are fixed. 
C) the time frame in which some resources are fixed. 
D) the time frame in which output is fixed. 
E) a time frame short enough so that some costs are explicit costs. 
A) less than one year. 
B) the time frame in which all resources are fixed. 
C) the time frame in which some resources are fixed. 
D) the time frame in which output is fixed. 
E) a time frame short enough so that some costs are explicit costs.

Question 9

To produce 10 shirts,the total cost is $80;to produce 11 shirts,the total cost is $99.The average total cost of the 11th shirt is equal to

Accepted Answer

A) $8. 
B) $9. 
C) $80. 
D) $99. 
E) $19. 
A) $8. 
B) $9. 
C) $80. 
D) $99. 
E) $19.

Question 10

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

Accepted Answer

A) $0.75 
B) $1.00 
C) $1.75 
D) $20 
E) $0.25 
A) $0.75 
B) $1.00 
C) $1.75 
D) $20 
E) $0.25

Question 11

Average total cost is equal to

Accepted Answer

A) average fixed cost + average variable cost. 
B) total cost ÷ quantity. 
C) the change in total cost when output changes by one unit. 
D) Answers A and B are correct. 
E) Answers A and C are correct. 
A) average fixed cost + average variable cost. 
B) total cost ÷ quantity. 
C) the change in total cost when output changes by one unit. 
D) Answers A and B are correct. 
E) Answers A and C are correct.

Question 12

"In the short run,even when output is zero,the firm still has some variable costs it must pay." Is the statement correct or incorrect? Briefly explain your answer.

Accepted Answer

The statement is incorrect.When output i

Question 13

The long run is a time period in which

Accepted Answer

A) some of the firm's resources are fixed. 
B) all of the firm's resources are fixed. 
C) all of the firm's resources are variable. 
D) the firm cannot increase its output. 
E) all costs become explicit costs. 
A) some of the firm's resources are fixed. 
B) all of the firm's resources are fixed. 
C) all of the firm's resources are variable. 
D) the firm cannot increase its output. 
E) all costs become explicit costs.

Question 14

The U-shaped average total cost curve is

Accepted Answer

A) a result of firms' wanting to find the output level where cost is at its minimum. 
B) unrealistic because average total cost always increases as output increases. 
C) the result of average fixed cost falling and decreasing marginal returns as output increases. 
D) a result of constant marginal returns. 
E) a result of increasing marginal returns. 
A) a result of firms' wanting to find the output level where cost is at its minimum. 
B) unrealistic because average total cost always increases as output increases. 
C) the result of average fixed cost falling and decreasing marginal returns as output increases. 
D) a result of constant marginal returns. 
E) a result of increasing marginal returns.

Question 15

When a firm's long-run average total cost falls as its output increases,the firm is experiencing

Accepted Answer

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

Question 16

Jake is a corn farmer in Nebraska.He rents his land on a long-term lease for $250,000 a year.He pays his farm hands $128,000 a year.Is his rent a fixed cost or a variable cost? Are the wages he pays his workers a fixed cost or a variable cost? Briefly explain your answers.

Accepted Answer

Jake's rent is a fixed cost.He is rentin

Question 17

Are the short-run average total cost curve and the long-run average cost both U-shaped for the same reasons? If so,carefully explain these reasons.If not,explain why each curve is U-shaped.

Accepted Answer

The curves are U-shaped for quite differ

Question 18

Lauren runs a chili restaurant in San Francisco.Her total revenue last year was $110,000.The rent on her restaurant was $48,000,her labor costs were $42,000,and her materials,food and other variable costs were $20,000.Lauren could have worked as a biologist and earned $50,000 per year.An economist calculates her implicit costs as

Accepted Answer

A) $150,000. 
B) $63,000. 
C) $50,000. 
D) $110,000. 
E) $0 because Lauren did not work as a biologist. 
A) $150,000. 
B) $63,000. 
C) $50,000. 
D) $110,000. 
E) $0 because Lauren did not work as a biologist.

Question 19

Interest is considered a(n)

Accepted Answer

A) explicit cost when the firm pays a bank to borrow money. 
B) implicit cost when the firm owner uses his or her own funds to buy capital. 
C) return to entrepreneurship if the firm owner uses her own funds to buy capital. 
D) form of depreciation if the cost of borrowing increases. 
E) Both answers A and B are true. 
A) explicit cost when the firm pays a bank to borrow money. 
B) implicit cost when the firm owner uses his or her own funds to buy capital. 
C) return to entrepreneurship if the firm owner uses her own funds to buy capital. 
D) form of depreciation if the cost of borrowing increases. 
E) Both answers A and B are true.

Question 20

Once production has reached the maximum average product of labor,if production increases then

Accepted Answer

A) average fixed cost rises. 
B) total costs decrease. 
C) total product decreases. 
D) decreasing marginal returns occur. 
E) the plant size must be increased. 
A) average fixed cost rises. 
B) total costs decrease. 
C) total product decreases. 
D) decreasing marginal returns occur. 
E) the plant size must be increased.

In a figure showing the average total cost curve and the average variable cost curve,the vertical distance between the two curves is equal to the

-Paulette owns a pizza parlor.Her total cost schedule is in the above table.Her total fixed cost is equal to

What do economists mean when they say that a firm's plant is fixed?

Marginal cost is equal to

-The table above shows the total product schedule for Rick's Lawn Service,a yard care company.The average product of labor ________ when the 7th worker is hired.

The figure above shows some of a firm's cost curves. -Based on the figure above,curve B is the firm's

The short run is

To produce 10 shirts,the total cost is $80;to produce 11 shirts,the total cost is $99.The average total cost of the 11th shirt is equal to

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

Average total cost is equal to

"In the short run,even when output is zero,the firm still has some variable costs it must pay." Is the statement correct or incorrect? Briefly explain your answer.

The long run is a time period in which

The U-shaped average total cost curve is

When a firm's long-run average total cost falls as its output increases,the firm is experiencing

Jake is a corn farmer in Nebraska.He rents his land on a long-term lease for $250,000 a year.He pays his farm hands $128,000 a year.Is his rent a fixed cost or a variable cost? Are the wages he pays his workers a fixed cost or a variable cost? Briefly explain your answers.

Are the short-run average total cost curve and the long-run average cost both U-shaped for the same reasons? If so,carefully explain these reasons.If not,explain why each curve is U-shaped.

Interest is considered a(n)

Once production has reached the maximum average product of labor,if production increases then

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

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Exam 10: Production and Cost

In a figure showing the average total cost curve and the average variable cost curve,the vertical distance between the two curves is equal to the

-Paulette owns a pizza parlor.Her total cost schedule is in the above table.Her total fixed cost is equal to

What do economists mean when they say that a firm's plant is fixed?

Marginal cost is equal to

-The table above shows the total product schedule for Rick's Lawn Service,a yard care company.The average product of labor ________ when the 7th worker is hired.

The figure above shows some of a firm's cost curves. -Based on the figure above,curve B is the firm's

The short run is

To produce 10 shirts,the total cost is $80;to produce 11 shirts,the total cost is $99.The average total cost of the 11th shirt is equal to

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

Average total cost is equal to

"In the short run,even when output is zero,the firm still has some variable costs it must pay." Is the statement correct or incorrect? Briefly explain your answer.

The long run is a time period in which

The U-shaped average total cost curve is

When a firm's long-run average total cost falls as its output increases,the firm is experiencing

Jake is a corn farmer in Nebraska.He rents his land on a long-term lease for $250,000 a year.He pays his farm hands $128,000 a year.Is his rent a fixed cost or a variable cost? Are the wages he pays his workers a fixed cost or a variable cost? Briefly explain your answers.

Are the short-run average total cost curve and the long-run average cost both U-shaped for the same reasons? If so,carefully explain these reasons.If not,explain why each curve is U-shaped.

Interest is considered a(n)

Once production has reached the maximum average product of labor,if production increases then

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