Question 1

At the Punjab Bakery,two workers can decorate 14 cakes in an hour and three workers can decorate 18 cakes in an hour.The marginal product of the third worker is

Accepted Answer

A)  18 cakes, and the average product for three workers is 6 cakes. 
B)  9 cakes and is equal to the average product. 
C)  4 cakes, and the average product for three workers is 6 cakes. 
D)  32 cakes, and the average product for three workers is 9 cakes. 
E)  6 cakes, and the average product for three workers is also 6 cakes. 
A)  18 cakes, and the average product for three workers is 6 cakes. 
B)  9 cakes and is equal to the average product. 
C)  4 cakes, and the average product for three workers is 6 cakes. 
D)  32 cakes, and the average product for three workers is 9 cakes. 
E)  6 cakes, and the average product for three workers is also 6 cakes.

Question 2

The paramount goal of a firm is to

Accepted Answer

A)  maximize profit. 
B)  maximize sales. 
C)  maximize total revenue. 
D)  minimize costs. 
E)  force its competitors into bankruptcy. 
A)  maximize profit. 
B)  maximize sales. 
C)  maximize total revenue. 
D)  minimize costs. 
E)  force its competitors into bankruptcy.

Question 3

Total cost is equal to the sum of

Accepted Answer

A)  total revenue and total cost. 
B)  total variable cost and total product. 
C)  total variable cost and total fixed cost. 
D)  total fixed cost and total product. 
E)  the marginal cost plus the total fixed cost plus the total variable cost. 
A)  total revenue and total cost. 
B)  total variable cost and total product. 
C)  total variable cost and total fixed cost. 
D)  total fixed cost and total product. 
E)  the marginal cost plus the total fixed cost plus the total variable cost.

Question 4

Economies of scale can occur as a result of which of the following?

Accepted Answer

A)  increasing marginal returns as the firm increases its size 
B)  lower fixed cost as the firm increases its size 
C)  management difficulties as the firm increases its size 
D)  greater specialization of labor and capital as the firm increases its size 
E)  increased total cost when the firm increases its size 
A)  increasing marginal returns as the firm increases its size 
B)  lower fixed cost as the firm increases its size 
C)  management difficulties as the firm increases its size 
D)  greater specialization of labor and capital as the firm increases its size 
E)  increased total cost when the firm increases its size

Question 5

-The table above shows the total product schedule for Rick's Lawn Service,a yard care company.When the 4th worker is hired,the ________ product of labor equals ________ lawns mowed.

Accepted Answer

A)  average; 60 
B)  average; 3.75 
C)  marginal; 3.75 
D)  marginal; 0 
E)  marginal; 15 
A)  average; 60 
B)  average; 3.75 
C)  marginal; 3.75 
D)  marginal; 0 
E)  marginal; 15

Question 6

-The table above gives costs at Jan's Bike Shop.Unfortunately,Jan's record keeping has been spotty.Each worker is paid $100 a day.Labor costs are the only variable costs of production.What is the total variable cost of producing 60 bikes?

Accepted Answer

A)  $200 
B)  $300 
C)  $400 
D)  $500 
E)  None of the above answers are correct. 
A)  $200 
B)  $300 
C)  $400 
D)  $500 
E)  None of the above answers are correct.

Question 7

-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 8

The portion of the long-run average cost curve in which economies of scale are experienced shows that as output increases,the

Accepted Answer

A)  average total cost decreases. 
B)  average total cost increases. 
C)  marginal cost increases. 
D)  marginal cost decreases. 
E)  average variable cost is constant and the average fixed cost decreases. 
A)  average total cost decreases. 
B)  average total cost increases. 
C)  marginal cost increases. 
D)  marginal cost decreases. 
E)  average variable cost is constant and the average fixed cost decreases.

Question 9

Average total cost equals

Accepted Answer

A)  the change in total cost divided by the change in output. 
B)  total fixed cost divided by output. 
C)  average fixed cost plus average variable cost. 
D)  total cost minus total variable cost. 
E)  average fixed cost plus average variable cost plus marginal cost. 
A)  the change in total cost divided by the change in output. 
B)  total fixed cost divided by output. 
C)  average fixed cost plus average variable cost. 
D)  total cost minus total variable cost. 
E)  average fixed cost plus average variable cost plus marginal cost.

Question 10

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 11

Jennifer owns a pig farm near Salina,Kansas.Last year she earned $39,000 in total revenue while incurring $38,000 in explicit costs.She could have earned $27,000 as a teacher in Salina.These are all her revenue and costs.Therefore Jennifer earned an

Accepted Answer

A)  accounting profit of $1,000 but incurred an economic loss of $26,000. 
B)  accounting profit of $1,000 but incurred an economic loss of $65,000. 
C)  accounting profit of $1,000 but incurred an economic loss of $38,000. 
D)  economic profit of $1,000. 
E)  None of the above answers is correct. 
A)  accounting profit of $1,000 but incurred an economic loss of $26,000. 
B)  accounting profit of $1,000 but incurred an economic loss of $65,000. 
C)  accounting profit of $1,000 but incurred an economic loss of $38,000. 
D)  economic profit of $1,000. 
E)  None of the above answers is correct.

Question 12

-The production and cost information provided in the table above for Flaming Fernando's,a restaurant that sells Fiery Frijoles,is for the

Accepted Answer

A)  short run because there are no variable costs. 
B)  short run because there is a fixed cost. 
C)  long run because there are no variable costs. 
D)  long run because there are no fixed costs. 
E)  short run and long run because the total cost increases as production increases. 
A)  short run because there are no variable costs. 
B)  short run because there is a fixed cost. 
C)  long run because there are no variable costs. 
D)  long run because there are no fixed costs. 
E)  short run and long run because the total cost increases as production increases.

Question 13

The main sources of economies of scale are

Accepted Answer

A)  increasing marginal cost and decreasing marginal product. 
B)  specialization of resources such as labor and capital. 
C)  caused by the difficulty of coordinating and controlling large enterprises. 
D)  decreasing marginal cost and increasing marginal product. 
E)  an increase in a firm's bargaining power to lower the wage rate and the cost of capital as the firm's output increases. 
A)  increasing marginal cost and decreasing marginal product. 
B)  specialization of resources such as labor and capital. 
C)  caused by the difficulty of coordinating and controlling large enterprises. 
D)  decreasing marginal cost and increasing marginal product. 
E)  an increase in a firm's bargaining power to lower the wage rate and the cost of capital as the firm's output increases.

Question 14

Which of the following is an implicit cost in Jim's business venture?
i.the salary Jim could have earned at another job
ii.the interest Jim must pay on the loan he incurred to help open his business
iii.the interest Jim lost when he used his savings to help open his business

Accepted Answer

A)  i only 
B)  ii only 
C)  iii only 
D)  i and iii 
E)  ii and iii 
A)  i only 
B)  ii only 
C)  iii only 
D)  i and iii 
E)  ii and iii

Question 15

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

Accepted Answer

A)  4th; the marginal product of the 4th worker exceeds the 3rd worker, but not the 5th worker 
B)  5th; output is maximized 
C)  5th; output declines with the 6th worker 
D)  3rd; the average product of labor is also increasing 
E)  4th; the average product of labor is also increasing 
A)  4th; the marginal product of the 4th worker exceeds the 3rd worker, but not the 5th worker 
B)  5th; output is maximized 
C)  5th; output declines with the 6th worker 
D)  3rd; the average product of labor is also increasing 
E)  4th; the average product of labor is also increasing

Question 16

What is the relationship between the marginal product of labor and the marginal cost?

Accepted Answer

Initially,as each additional unit of lab

Question 17

The short run is a time period that is

Accepted Answer

A)  equal to a day. 
B)  too short to change the amount of labor hired. 
C)  too short to change the size of the firm's plant. 
D)  long enough to change the size of the firm's plant. 
E)  too short to change the amount of any resource the firm employs. 
A)  equal to a day. 
B)  too short to change the amount of labor hired. 
C)  too short to change the size of the firm's plant. 
D)  long enough to change the size of the firm's plant. 
E)  too short to change the amount of any resource the firm employs.

Question 18

The short-run average total cost,average variable cost,and marginal cost curves are all U-shaped because of
i.constant total fixed cost.
ii.increasing and then decreasing marginal returns as more labor is hired.
iii.economies and diseconomies of scale as the plant size increases.

Accepted Answer

A)  only i 
B)  only ii 
C)  i and iii 
D)  ii and iii 
E)  i, ii, and iii 
A)  only i 
B)  only ii 
C)  i and iii 
D)  ii and iii 
E)  i, ii, and iii

Question 19

Which of the following are correct statements about implicit and explicit costs?
i.Normal profit is an implicit cost.
ii.Economic depreciation is an explicit cost.
iii.Wages are an explicit cost.

Accepted Answer

A)  ii and iii 
B)  i and iii 
C)  iii only 
D)  i, ii, and iii 
E)  i only 
A)  ii and iii 
B)  i and iii 
C)  iii only 
D)  i, ii, and iii 
E)  i only

Question 20

-Paulette owns a pizza parlor.Her total cost schedule is in the above table.Her marginal cost of producing the fifth pizza is

Accepted Answer

A)  $8. 
B)  between $8.01 and $10.00. 
C)  between $10.01 and $14.00. 
D)  between $14.01 and $78.00. 
E)  more than $78.01. 
A)  $8. 
B)  between $8.01 and $10.00. 
C)  between $10.01 and $14.00. 
D)  between $14.01 and $78.00. 
E)  more than $78.01.

At the Punjab Bakery,two workers can decorate 14 cakes in an hour and three workers can decorate 18 cakes in an hour.The marginal product of the third worker is

The paramount goal of a firm is to

Total cost is equal to the sum of

Economies of scale can occur as a result of which of the following?

-The table above shows the total product schedule for Rick's Lawn Service,a yard care company.When the 4th worker is hired,the product of labor equals lawns mowed.

-The table above gives costs at Jan's Bike Shop.Unfortunately,Jan's record keeping has been spotty.Each worker is paid $100 a day.Labor costs are the only variable costs of production.What is the total variable cost of producing 60 bikes?

-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.

The portion of the long-run average cost curve in which economies of scale are experienced shows that as output increases,the

Average total cost equals

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.

Jennifer owns a pig farm near Salina,Kansas.Last year she earned $39,000 in total revenue while incurring $38,000 in explicit costs.She could have earned $27,000 as a teacher in Salina.These are all her revenue and costs.Therefore Jennifer earned an

-The production and cost information provided in the table above for Flaming Fernando's,a restaurant that sells Fiery Frijoles,is for the

The main sources of economies of scale are

Which of the following is an implicit cost in Jim's business venture? i.the salary Jim could have earned at another job ii.the interest Jim must pay on the loan he incurred to help open his business iii.the interest Jim lost when he used his savings to help open his business

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

What is the relationship between the marginal product of labor and the marginal cost?

The short run is a time period that is

The short-run average total cost,average variable cost,and marginal cost curves are all U-shaped because of i.constant total fixed cost. ii.increasing and then decreasing marginal returns as more labor is hired. iii.economies and diseconomies of scale as the plant size increases.

Which of the following are correct statements about implicit and explicit costs? i.Normal profit is an implicit cost. ii.Economic depreciation is an explicit cost. iii.Wages are an explicit cost.

-Paulette owns a pizza parlor.Her total cost schedule is in the above table.Her marginal cost of producing the fifth pizza 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

At the Punjab Bakery,two workers can decorate 14 cakes in an hour and three workers can decorate 18 cakes in an hour.The marginal product of the third worker is

The paramount goal of a firm is to

Total cost is equal to the sum of

Economies of scale can occur as a result of which of the following?

-The table above shows the total product schedule for Rick's Lawn Service,a yard care company.When the 4th worker is hired,the ________ product of labor equals ________ lawns mowed.

-The table above gives costs at Jan's Bike Shop.Unfortunately,Jan's record keeping has been spotty.Each worker is paid $100 a day.Labor costs are the only variable costs of production.What is the total variable cost of producing 60 bikes?

-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.

The portion of the long-run average cost curve in which economies of scale are experienced shows that as output increases,the

Average total cost equals

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.

Jennifer owns a pig farm near Salina,Kansas.Last year she earned $39,000 in total revenue while incurring $38,000 in explicit costs.She could have earned $27,000 as a teacher in Salina.These are all her revenue and costs.Therefore Jennifer earned an

-The production and cost information provided in the table above for Flaming Fernando's,a restaurant that sells Fiery Frijoles,is for the

The main sources of economies of scale are

Which of the following is an implicit cost in Jim's business venture? i.the salary Jim could have earned at another job ii.the interest Jim must pay on the loan he incurred to help open his business iii.the interest Jim lost when he used his savings to help open his business

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

What is the relationship between the marginal product of labor and the marginal cost?

The short run is a time period that is

The short-run average total cost,average variable cost,and marginal cost curves are all U-shaped because of i.constant total fixed cost. ii.increasing and then decreasing marginal returns as more labor is hired. iii.economies and diseconomies of scale as the plant size increases.

Which of the following are correct statements about implicit and explicit costs? i.Normal profit is an implicit cost. ii.Economic depreciation is an explicit cost. iii.Wages are an explicit cost.

-Paulette owns a pizza parlor.Her total cost schedule is in the above table.Her marginal cost of producing the fifth pizza 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

-The table above shows the total product schedule for Rick's Lawn Service,a yard care company.When the 4th worker is hired,the product of labor equals lawns mowed.

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