Question 1

If total fixed cost increases,which of the following will NOT change?

Accepted Answer

A)  total cost 
B)  average fixed cost 
C)  marginal cost 
D)  average total cost 
E)  ALL costs increase when total fixed cost increases. 
A)  total cost 
B)  average fixed cost 
C)  marginal cost 
D)  average total cost 
E)  ALL costs increase when total fixed cost increases.

Question 2

What is a normal profit? Is it part of the firm's opportunity costs,total revenue,or neither?

Accepted Answer

The normal profit is

Question 3

The law of decreasing returns states that as a firm uses more of a

Accepted Answer

A)  fixed input, with a given quantity of variable inputs, the marginal product of the fixed input eventually decreases. 
B)  variable input, total output will increase indefinitely. 
C)  variable input, with a given quantity of fixed inputs, the marginal product of the variable input eventually decreases. 
D)  variable input, output will begin to fall immediately. 
E)  fixed input and a variable input, the marginal product of the fixed input and the marginal product of the variable input both decrease. 
A)  fixed input, with a given quantity of variable inputs, the marginal product of the fixed input eventually decreases. 
B)  variable input, total output will increase indefinitely. 
C)  variable input, with a given quantity of fixed inputs, the marginal product of the variable input eventually decreases. 
D)  variable input, output will begin to fall immediately. 
E)  fixed input and a variable input, the marginal product of the fixed input and the marginal product of the variable input both decrease.

Question 4

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 5

Ajax Manufacturing has a fixed scale of plant with the levels of total product given in the table for different levels of labor.Complete the table by calculating the average product and marginal product.

Accepted Answer

@#IMG-DLM& The compl

Question 6

The short run is the time frame

Accepted Answer

A)  during which the quantities of all resources are fixed. 
B)  that is less than a year. 
C)  during which the quantities of some resources are fixed. 
D)  during which the quantities of all resources are variable. 
E)  during which all costs are implicit costs. 
A)  during which the quantities of all resources are fixed. 
B)  that is less than a year. 
C)  during which the quantities of some resources are fixed. 
D)  during which the quantities of all resources are variable. 
E)  during which all costs are implicit costs.

Question 7

If 10 workers can produce 1,500 units of output and 11 workers can produce 1,600 units of output,then the average product of 11 workers is

Accepted Answer

A)  1,600 units. 
B)  1,500 units. 
C)  145.5 units. 
D)  100 units. 
E)  136.4 units. 
A)  1,600 units. 
B)  1,500 units. 
C)  145.5 units. 
D)  100 units. 
E)  136.4 units.

Question 8

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 9

-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 10

-The Jerry-Berry Ice Cream Shoppe's total cost schedule is in the above table.Based on the table,which of the following is correct?

Accepted Answer

A)  The total fixed cost is $1. 
B)  The average fixed cost of 1 gallon is $1.00. 
C)  The average variable cost of 2 gallons of ice cream is $1.00 per gallon. 
D)  Only answers A and B are correct. 
E)  Answers A, B, and C are correct. 
A)  The total fixed cost is $1. 
B)  The average fixed cost of 1 gallon is $1.00. 
C)  The average variable cost of 2 gallons of ice cream is $1.00 per gallon. 
D)  Only answers A and B are correct. 
E)  Answers A, B, and C are correct.

Question 11

Economies of scale and diseconomies of scale explain

Accepted Answer

A)  cost behavior in the short run. 
B)  profit maximization in the long run. 
C)  the U-shape of the long-run average cost curve. 
D)  the U-shape of the short-run average total cost curve. 
E)  the U-shape of the marginal cost curves. 
A)  cost behavior in the short run. 
B)  profit maximization in the long run. 
C)  the U-shape of the long-run average cost curve. 
D)  the U-shape of the short-run average total cost curve. 
E)  the U-shape of the marginal cost curves.

Question 12

-The above table shows the total product schedule for Hair Today,a hair styling salon.The average product when four workers are hired is

Accepted Answer

A)  10 hair stylings. 
B)  15 hair stylings. 
C)  20 hair stylings. 
D)  240 hair stylings. 
E)  the same as when five workers are hired. 
A)  10 hair stylings. 
B)  15 hair stylings. 
C)  20 hair stylings. 
D)  240 hair stylings. 
E)  the same as when five workers are hired.

Question 13

Draw an average total cost curve,an average variable cost,and a marginal cost curve all on the same graph.Make sure to correctly label the axes.What relationship must exist between the marginal cost curve and the average total cost and average variable cost curves?

Accepted Answer

@#IMG-DLM& Typical cost curves are above.The avera

Question 14

The U-shape of the average variable,average total,and marginal cost curves reflects

Accepted Answer

A)  increasing marginal returns. 
B)  decreasing marginal returns. 
C)  both increasing and decreasing marginal returns. 
D)  decreasing marginal product. 
E)  the point that implicit costs become a smaller fraction of total cost as output increases. 
A)  increasing marginal returns. 
B)  decreasing marginal returns. 
C)  both increasing and decreasing marginal returns. 
D)  decreasing marginal product. 
E)  the point that implicit costs become a smaller fraction of total cost as output increases.

Question 15

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

Accepted Answer

The long run is defined as the time fram

Question 16

The average fixed cost curve

Accepted Answer

A)  is always positively sloped. 
B)  is U-shaped. 
C)  has an upside-down U shape. 
D)  is always negatively sloped. 
E)  is horizontal. 
A)  is always positively sloped. 
B)  is U-shaped. 
C)  has an upside-down U shape. 
D)  is always negatively sloped. 
E)  is horizontal.

Question 17

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 18

-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 19

Which of the following is an example of an implicit cost?

Accepted Answer

A)  rent on a building 
B)  the cost of fertilizer for a farmer 
C)  the economic depreciation of capital equipment the business owns 
D)  the cost of fuel and materials. 
E)  wages paid to workers 
A)  rent on a building 
B)  the cost of fertilizer for a farmer 
C)  the economic depreciation of capital equipment the business owns 
D)  the cost of fuel and materials. 
E)  wages paid to workers

Question 20

In the long run,constant returns to scale necessarily occur when the firm increases its production and the firm's

Accepted Answer

A)  total cost increases. 
B)  total cost does not change. 
C)  average total cost increases . 
D)  average total cost does not change. 
E)  production increases by more than does the firm's total cost. 
A)  total cost increases. 
B)  total cost does not change. 
C)  average total cost increases . 
D)  average total cost does not change. 
E)  production increases by more than does the firm's total cost.

If total fixed cost increases,which of the following will NOT change?

What is a normal profit? Is it part of the firm's opportunity costs,total revenue,or neither?

The law of decreasing returns states that as a firm uses more of a

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

Ajax Manufacturing has a fixed scale of plant with the levels of total product given in the table for different levels of labor.Complete the table by calculating the average product and marginal product.

The short run is the time frame

If 10 workers can produce 1,500 units of output and 11 workers can produce 1,600 units of output,then the average product of 11 workers is

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

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

-The Jerry-Berry Ice Cream Shoppe's total cost schedule is in the above table.Based on the table,which of the following is correct?

Economies of scale and diseconomies of scale explain

-The above table shows the total product schedule for Hair Today,a hair styling salon.The average product when four workers are hired is

Draw an average total cost curve,an average variable cost,and a marginal cost curve all on the same graph.Make sure to correctly label the axes.What relationship must exist between the marginal cost curve and the average total cost and average variable cost curves?

The U-shape of the average variable,average total,and marginal cost curves reflects

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

The average fixed cost curve

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.

-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.

Which of the following is an example of an implicit cost?

In the long run,constant returns to scale necessarily occur when the firm increases its production and the firm's

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 14: Production and Cost

If total fixed cost increases,which of the following will NOT change?

What is a normal profit? Is it part of the firm's opportunity costs,total revenue,or neither?

The law of decreasing returns states that as a firm uses more of a

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

Ajax Manufacturing has a fixed scale of plant with the levels of total product given in the table for different levels of labor.Complete the table by calculating the average product and marginal product.

The short run is the time frame

If 10 workers can produce 1,500 units of output and 11 workers can produce 1,600 units of output,then the average product of 11 workers is

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

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

-The Jerry-Berry Ice Cream Shoppe's total cost schedule is in the above table.Based on the table,which of the following is correct?

Economies of scale and diseconomies of scale explain

-The above table shows the total product schedule for Hair Today,a hair styling salon.The average product when four workers are hired is

Draw an average total cost curve,an average variable cost,and a marginal cost curve all on the same graph.Make sure to correctly label the axes.What relationship must exist between the marginal cost curve and the average total cost and average variable cost curves?

The U-shape of the average variable,average total,and marginal cost curves reflects

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

The average fixed cost curve

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.

-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.

Which of the following is an example of an implicit cost?

In the long run,constant returns to scale necessarily occur when the firm increases its production and the firm's

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

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.