Question 1

What is the long-run average cost curve? What are the three ranges of output and in what order do they occur? Briefly define each of the three ranges.

Accepted Answer

The long-run average cost curve shows th

Question 2

The relationship between the MP and MC curves is

Accepted Answer

A)  over the range where the MP curve has a negative slope, the MC curve also has a negative slope. 
B)  there is no predictable relationship. 
C)  over the range where the MC curve has a positive slope, the MP curve also has a positive slope. 
D)  over the range where the MP curve has a positive slope, the MC curve has a negative slope. 
E)  that the MP is not defined when the MC curve has a negative slope. 
A)  over the range where the MP curve has a negative slope, the MC curve also has a negative slope. 
B)  there is no predictable relationship. 
C)  over the range where the MC curve has a positive slope, the MP curve also has a positive slope. 
D)  over the range where the MP curve has a positive slope, the MC curve has a negative slope. 
E)  that the MP is not defined when the MC curve has a negative slope.

Question 3

What resources can a firm change in the short run? In the long run?

Accepted Answer

In the short run,the firm can change its

Question 4

For a business,opportunity cost measures

Accepted Answer

A)  only the cost of labor and materials. 
B)  only the implicit costs of the business. 
C)  the cost of all the factors of production the firm employs. 
D)  only the explicit costs the firm must pay. 
E)  all of the firm's costs including its normal profit and its economic profit. 
A)  only the cost of labor and materials. 
B)  only the implicit costs of the business. 
C)  the cost of all the factors of production the firm employs. 
D)  only the explicit costs the firm must pay. 
E)  all of the firm's costs including its normal profit and its economic profit.

Question 5

Which average cost curves are U-shaped?

Accepted Answer

Both the average total cost an

Question 6

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

Accepted Answer

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

Question 7

-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 8

"If the marginal product of labor curve slopes downward,then the average product of labor curve necessarily must slope downward." Explain whether the previous statement is correct or incorrect?

Accepted Answer

The statement is incorrect.The relations

Question 9

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 10

What does the average product of labor equal?

Accepted Answer

The average product of labor e

Question 11

The law of decreasing returns applies to

Accepted Answer

A)  the long-run average cost curve. 
B)  average total cost. 
C)  diseconomies of scale. 
D)  changes in a variable input with a given quantity of fixed inputs. 
E)  changes in a fixed input with a given quantity of variable inputs. 
A)  the long-run average cost curve. 
B)  average total cost. 
C)  diseconomies of scale. 
D)  changes in a variable input with a given quantity of fixed inputs. 
E)  changes in a fixed input with a given quantity of variable inputs.

Question 12

Ayanna grows herbs.Last year she grew 2,000 pounds of herbs in a year while using 250 square feet of land and 1 worker.This year she doubled her land to 500 square feet,doubled her workers to 2,and grew 4,500 pounds of herbs.She sells her rare,organic herbs for $50 a pound.She pays her a worker $25,000 a year and rents her land for $100 per square foot for a year.These are her only costs.
a.What was Ayanna's total cost last year and this year?
b.What was Ayanna's average total cost last year and this year?
c.Did Ayanna experience economies or diseconomies of scale?

Accepted Answer

a.Ayanna's total cost last year was $50,

Question 13

-Kenya owns a lawn mowing company.His total product schedule is in the above table.Decreasing marginal returns first occur with the

Accepted Answer

A)  first worker. 
B)  second worker. 
C)  third worker. 
D)  fourth worker. 
E)  fifth worker. 
A)  first worker. 
B)  second worker. 
C)  third worker. 
D)  fourth worker. 
E)  fifth worker.

Question 14

Which curve shows the lowest average total cost at which it is possible to produce each output when the firm has time to change both its labor force and plant size?

Accepted Answer

The long-run average cost curv

Question 15

One of the major reasons for the U-shaped average total cost curve is the fact that

Accepted Answer

A)  there are increasing returns from labor regardless of the number of workers employed. 
B)  there eventually are decreasing returns from labor as more workers are employed. 
C)  prices fall as output increases. 
D)  the average fixed cost increases as more output is produced. 
E)  the variable cost decreases as more output is produced. 
A)  there are increasing returns from labor regardless of the number of workers employed. 
B)  there eventually are decreasing returns from labor as more workers are employed. 
C)  prices fall as output increases. 
D)  the average fixed cost increases as more output is produced. 
E)  the variable cost decreases as more output is produced.

Question 16

Which of the following is an implicit cost?
i.wages paid to workers
ii.the normal profit
iii.the electric bill

Accepted Answer

A)  i only 
B)  ii only 
C)  i and ii 
D)  ii and iii 
E)  Neither i, ii, nor iii 
A)  i only 
B)  ii only 
C)  i and ii 
D)  ii and iii 
E)  Neither i, ii, nor iii

Question 17

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.

Question 18

The vertical distance between total cost curve and total variable cost curve is equal to

Accepted Answer

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

Question 19

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 20

-The table above shows

Accepted Answer

A)  a total product schedule. 
B)  the market for labor. 
C)  a production possibility frontier. 
D)  a supply schedule. 
E)  a demand for labor schedule. 
A)  a total product schedule. 
B)  the market for labor. 
C)  a production possibility frontier. 
D)  a supply schedule. 
E)  a demand for labor schedule.

What is the long-run average cost curve? What are the three ranges of output and in what order do they occur? Briefly define each of the three ranges.

The relationship between the MP and MC curves is

What resources can a firm change in the short run? In the long run?

For a business,opportunity cost measures

Which average cost curves are U-shaped?

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

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

"If the marginal product of labor curve slopes downward,then the average product of labor curve necessarily must slope downward." Explain whether the previous statement is correct or incorrect?

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

What does the average product of labor equal?

The law of decreasing returns applies to

-Kenya owns a lawn mowing company.His total product schedule is in the above table.Decreasing marginal returns first occur with the

Which curve shows the lowest average total cost at which it is possible to produce each output when the firm has time to change both its labor force and plant size?

One of the major reasons for the U-shaped average total cost curve is the fact that

Which of the following is an implicit cost? i.wages paid to workers ii.the normal profit iii.the electric bill

Normal profit is

The vertical distance between total cost curve and total variable cost curve is equal to

Normal profit is a(n) cost because .

-The table above shows

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

What is the long-run average cost curve? What are the three ranges of output and in what order do they occur? Briefly define each of the three ranges.

The relationship between the MP and MC curves is

What resources can a firm change in the short run? In the long run?

For a business,opportunity cost measures

Which average cost curves are U-shaped?

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

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

"If the marginal product of labor curve slopes downward,then the average product of labor curve necessarily must slope downward." Explain whether the previous statement is correct or incorrect?

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

What does the average product of labor equal?

The law of decreasing returns applies to

-Kenya owns a lawn mowing company.His total product schedule is in the above table.Decreasing marginal returns first occur with the

Which curve shows the lowest average total cost at which it is possible to produce each output when the firm has time to change both its labor force and plant size?

One of the major reasons for the U-shaped average total cost curve is the fact that

Which of the following is an implicit cost? i.wages paid to workers ii.the normal profit iii.the electric bill

Normal profit is

The vertical distance between total cost curve and total variable cost curve is equal to

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

-The table above shows

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

Normal profit is a(n) cost because .