Question 1

The figure above shows some of a firm's cost curves.
-A firm's utility bill is a variable cost.If the cost of utilities increases,then in the figure above ________ upward.

Accepted Answer

A)  only curve A shifts 
B)  only curve B shifts 
C)  only curve C shifts 
D)  both curves A and C shift 
E)  both curves B and C shift 
A)  only curve A shifts 
B)  only curve B shifts 
C)  only curve C shifts 
D)  both curves A and C shift 
E)  both curves B and C shift

Question 2

The marginal cost curve is U-shaped.Over the range of output for which the marginal cost is falling as output increases,the marginal product is

Accepted Answer

A)  increasing. 
B)  decreasing. 
C)  constant. 
D)  probably changing, but there is no stable relationship between the marginal cost and the marginal product. 
E)  not defined. 
A)  increasing. 
B)  decreasing. 
C)  constant. 
D)  probably changing, but there is no stable relationship between the marginal cost and the marginal product. 
E)  not defined.

Question 3

As output increases,economies of scale occur when the

Accepted Answer

A)  long-run average cost increases. 
B)  long-run average cost decreases. 
C)  short-run average total cost decreases. 
D)  long-run average cost stays constant. 
E)  long-run fixed cost decreases. 
A)  long-run average cost increases. 
B)  long-run average cost decreases. 
C)  short-run average total cost decreases. 
D)  long-run average cost stays constant. 
E)  long-run fixed cost decreases.

Question 4

Which of the following is true?

Accepted Answer

A)  Profit as calculated by accountants and economic profit are not necessarily equal. 
B)  Profit as calculated by accountants is always smaller than economic profit. 
C)  Economic profit ignores implicit costs. 
D)  The Internal Revenue Service taxes the firm's economic profit but not its normal profit. 
E)  The Internal Revenue Service taxes the firm's normal profit but not its economic profit. 
A)  Profit as calculated by accountants and economic profit are not necessarily equal. 
B)  Profit as calculated by accountants is always smaller than economic profit. 
C)  Economic profit ignores implicit costs. 
D)  The Internal Revenue Service taxes the firm's economic profit but not its normal profit. 
E)  The Internal Revenue Service taxes the firm's normal profit but not its economic profit.

Question 5

What are diseconomies of scale and why might they occur?

Accepted Answer

Diseconomies of scale are features of th

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 2 workers,her average total cost equals

Accepted Answer

A)  $2,400. 
B)  $300. 
C)  $10.00. 
D)  $12.00. 
E)  $1,200. 
A)  $2,400. 
B)  $300. 
C)  $10.00. 
D)  $12.00. 
E)  $1,200.

Question 7

As output increases,average total cost decreases

Accepted Answer

A)  constantly. 
B)  as the average product of labor decreases. 
C)  initially and then starts to increase. 
D)  in the long run and the short run. 
E)  as long as average fixed cost decreases. 
A)  constantly. 
B)  as the average product of labor decreases. 
C)  initially and then starts to increase. 
D)  in the long run and the short run. 
E)  as long as average fixed cost decreases.

Question 8

In the short run,a firm cannot change the amount of capital it uses.Therefore the cost of capital is a

Accepted Answer

A)  short-run cost. 
B)  variable cost. 
C)  productivity cost. 
D)  fixed cost. 
E)  marginal cost. 
A)  short-run cost. 
B)  variable cost. 
C)  productivity cost. 
D)  fixed cost. 
E)  marginal cost.

Question 9

If the average product of labor curve is rising,
i.the average variable cost curve is falling.
ii.the marginal cost curve is definitely falling.
iii.the marginal product curve has reached its maximum.
A) i and iii
B) i only
C) ii and iii
D) i, ii, and iii
E) ii only

Accepted Answer

The answer of If the average product of labor curve...

Question 10

How do we calculate average fixed cost and why does average fixed cost fall as output increases?

Accepted Answer

Average fixed cost is calculated by divi

Question 11

Increasing marginal returns to labor

Accepted Answer

A)  occur when a particularly efficient worker is employed. 
B)  describe the portion of a total product curve where the marginal product is negative. 
C)  mean that two workers produce less than twice the output of one worker. 
D)  are the result of specialization and division of labor in the production process. 
E)  occur only when there are increasing marginal returns to capital. 
A)  occur when a particularly efficient worker is employed. 
B)  describe the portion of a total product curve where the marginal product is negative. 
C)  mean that two workers produce less than twice the output of one worker. 
D)  are the result of specialization and division of labor in the production process. 
E)  occur only when there are increasing marginal returns to capital.

Question 12

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 13

What is the difference between a normal profit and an economic profit?

Accepted Answer

A normal profit is the return to entrepr

Question 14

Diseconomies of scale is

Accepted Answer

A)  a short run phenomenon. 
B)  the result of decreasing marginal returns. 
C)  a long run phenomenon. 
D)  the result of increasing marginal returns. 
E)  possible only when the firm's plant size is fixed. 
A)  a short run phenomenon. 
B)  the result of decreasing marginal returns. 
C)  a long run phenomenon. 
D)  the result of increasing marginal returns. 
E)  possible only when the firm's plant size is fixed.

The figure above shows some of a firm's cost curves. -A firm's utility bill is a variable cost.If the cost of utilities increases,then in the figure above ________ upward.

The marginal cost curve is U-shaped.Over the range of output for which the marginal cost is falling as output increases,the marginal product is

As output increases,economies of scale occur when the

Which of the following is true?

What are diseconomies of scale and why might they occur?

-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 total cost equals

As output increases,average total cost decreases

In the short run,a firm cannot change the amount of capital it uses.Therefore the cost of capital is a

If the average product of labor curve is rising, i.the average variable cost curve is falling. ii.the marginal cost curve is definitely falling. iii.the marginal product curve has reached its maximum. A) i and iii B) i only C) ii and iii D) i, ii, and iii E) ii only

How do we calculate average fixed cost and why does average fixed cost fall as output increases?

Increasing marginal returns to labor

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

What is the difference between a normal profit and an economic profit?

Diseconomies of scale is

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

The figure above shows some of a firm's cost curves. -A firm's utility bill is a variable cost.If the cost of utilities increases,then in the figure above ________ upward.

The marginal cost curve is U-shaped.Over the range of output for which the marginal cost is falling as output increases,the marginal product is

As output increases,economies of scale occur when the

Which of the following is true?

What are diseconomies of scale and why might they occur?

-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 total cost equals

As output increases,average total cost decreases

In the short run,a firm cannot change the amount of capital it uses.Therefore the cost of capital is a

If the average product of labor curve is rising, i.the average variable cost curve is falling. ii.the marginal cost curve is definitely falling. iii.the marginal product curve has reached its maximum. A) i and iii B) i only C) ii and iii D) i, ii, and iii E) ii only

How do we calculate average fixed cost and why does average fixed cost fall as output increases?

Increasing marginal returns to labor

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

What is the difference between a normal profit and an economic profit?

Diseconomies of scale is

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