Question 1

Which of the following is a fixed cost for ACME manufacturing?

Accepted Answer

A)  wages paid to labor 
B)  the annual fire and theft insurance premiums 
C)  the utility bill 
D)  raw material costs 
E)  the cost of shipping its product to market 
A)  wages paid to labor 
B)  the annual fire and theft insurance premiums 
C)  the utility bill 
D)  raw material costs 
E)  the cost of shipping its product to market

Question 2

If average variable costs increase as output increases,then

Accepted Answer

A)  total fixed cost must be increasing also. 
B)  marginal cost must be greater than average variable cost. 
C)  total cost must be constant. 
D)  output must be zero. 
E)  average total cost must be increasing also. 
A)  total fixed cost must be increasing also. 
B)  marginal cost must be greater than average variable cost. 
C)  total cost must be constant. 
D)  output must be zero. 
E)  average total cost must be increasing also.

Question 3

-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 6 workers,her total cost equals

Accepted Answer

A)  $2,400. 
B)  $300. 
C)  $7.50. 
D)  $10.00. 
E)  $1,800. 
A)  $2,400. 
B)  $300. 
C)  $7.50. 
D)  $10.00. 
E)  $1,800.

Question 4

Average product is equal to

Accepted Answer

A)  marginal product + total product. 
B)  total product ÷ marginal product. 
C)  total product ÷ quantity of labor. 
D)  total product × quantity of labor. 
E)  marginal product × quantity of labor. 
A)  marginal product + total product. 
B)  total product ÷ marginal product. 
C)  total product ÷ quantity of labor. 
D)  total product × quantity of labor. 
E)  marginal product × quantity of labor.

Question 5

Cost curves shift if
i.technology changes.
ii.the prices of factors of production change.
iii.productivity changes.

Accepted Answer

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

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)  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 7

When plotted against the total output,what does the total fixed cost curve look like?

Accepted Answer

The total fixed cost curve is

Question 8

From a firm's viewpoint,opportunity cost is the

Accepted Answer

A)  best alternative use customers can find for the firm's output. 
B)  cost the firm must pay for the factors of production it employs to attract them from their best alternative use. 
C)  accounting cost of resources. 
D)  price a firm can charge for its output. 
E)  cost of acquiring the opportunity to sell to its customers. 
A)  best alternative use customers can find for the firm's output. 
B)  cost the firm must pay for the factors of production it employs to attract them from their best alternative use. 
C)  accounting cost of resources. 
D)  price a firm can charge for its output. 
E)  cost of acquiring the opportunity to sell to its customers.

Question 9

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

Accepted Answer

A)  4th; exceeds 
B)  5th; exceeds 
C)  6th; exceeds 
D)  7th; is less than 
E)  7th; equals 
A)  4th; exceeds 
B)  5th; exceeds 
C)  6th; exceeds 
D)  7th; is less than 
E)  7th; equals

Question 10

________ cost is defined as a cost of production that does not entail a direct money payment.

Accepted Answer

A)  An explicit 
B)  An implicit 
C)  A total 
D)  A fixed 
E)  A marginal 
A)  An explicit 
B)  An implicit 
C)  A total 
D)  A fixed 
E)  A marginal

Question 11

Marginal cost

Accepted Answer

A)  is the difference between total cost and total fixed cost. 
B)  increases as the marginal product of labor increases. 
C)  decreases as the average product of labor increases. 
D)  is the change in total cost arising from a one-unit increase in output. 
E)  equals the change in variable cost divided by the change in fixed cost when output increases by one unit. 
A)  is the difference between total cost and total fixed cost. 
B)  increases as the marginal product of labor increases. 
C)  decreases as the average product of labor increases. 
D)  is the change in total cost arising from a one-unit increase in output. 
E)  equals the change in variable cost divided by the change in fixed cost when output increases by one unit.

Question 12

The return to entrepreneurship is known as

Accepted Answer

A)  economic profit. 
B)  normal profit. 
C)  opportunity revenue. 
D)  normal revenue. 
E)  explicit profit. 
A)  economic profit. 
B)  normal profit. 
C)  opportunity revenue. 
D)  normal revenue. 
E)  explicit profit.

Question 13

-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 total cost equals

Accepted Answer

A)  $1,200. 
B)  $300. 
C)  $10.00. 
D)  $12.00. 
E)  $600. 
A)  $1,200. 
B)  $300. 
C)  $10.00. 
D)  $12.00. 
E)  $600.

Question 14

Which of the following is FALSE?

Accepted Answer

A)  Long-run average variable costs equal long-run average total costs. 
B)  Fixed costs increase in the long run. 
C)  As a firm produces more output, eventually it experiences diseconomies of scale. 
D)  In the long run, both the amount of capital and labor used by the firm can be changed. 
E)  In the long run, the firm has no fixed inputs. 
A)  Long-run average variable costs equal long-run average total costs. 
B)  Fixed costs increase in the long run. 
C)  As a firm produces more output, eventually it experiences diseconomies of scale. 
D)  In the long run, both the amount of capital and labor used by the firm can be changed. 
E)  In the long run, the firm has no fixed inputs.

Question 15

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.

Question 16

Which of the following is an explicit cost of production?

Accepted Answer

A)  wages paid to workers 
B)  the electric bill 
C)  purchases of raw material 
D)  Only answers A and B are explicit costs because the purchases of raw material is only an opportunity cost. 
E)  Answers A, B, and C are all correct. 
A)  wages paid to workers 
B)  the electric bill 
C)  purchases of raw material 
D)  Only answers A and B are explicit costs because the purchases of raw material is only an opportunity cost. 
E)  Answers A, B, and C are all correct.

Question 17

-When the average product is at its maximum,

Accepted Answer

A)  the marginal product is increasing as output increases. 
B)  the marginal product is negative. 
C)  it is equal to the marginal product. 
D)  total product is also at its maximum. 
E)  total product is at its minimum. 
A)  the marginal product is increasing as output increases. 
B)  the marginal product is negative. 
C)  it is equal to the marginal product. 
D)  total product is also at its maximum. 
E)  total product is at its minimum.

Question 18

Diseconomies of scale is a result of

Accepted Answer

A)  mismanagement. 
B)  difficulties of coordinating and controlling a large enterprise. 
C)  specialization of labor, capital, and management. 
D)  technological progress. 
E)  larger fixed costs as the firm's production increases. 
A)  mismanagement. 
B)  difficulties of coordinating and controlling a large enterprise. 
C)  specialization of labor, capital, and management. 
D)  technological progress. 
E)  larger fixed costs as the firm's production increases.

Question 19

To produce 10 shirts,the total cost is $80; to produce 11 shirts,the total cost is $99.The marginal 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 20

In the long run,if 1,000 units are produced at a cost of $8,000 and 1,200 units at a cost of $9,200,then over this range of output there are

Accepted Answer

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

Which of the following is a fixed cost for ACME manufacturing?

If average variable costs increase as output increases,then

-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 6 workers,her total cost equals

Average product is equal to

Cost curves shift if i.technology changes. ii.the prices of factors of production change. iii.productivity changes.

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

When plotted against the total output,what does the total fixed cost curve look like?

From a firm's viewpoint,opportunity cost is the

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

________ cost is defined as a cost of production that does not entail a direct money payment.

Marginal cost

The return to entrepreneurship is known as

-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 total cost equals

Which of the following is FALSE?

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

Which of the following is an explicit cost of production?

-When the average product is at its maximum,

Diseconomies of scale is a result of

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

In the long run,if 1,000 units are produced at a cost of $8,000 and 1,200 units at a cost of $9,200,then over this range of output there are

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

Which of the following is a fixed cost for ACME manufacturing?

If average variable costs increase as output increases,then

-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 6 workers,her total cost equals

Average product is equal to

Cost curves shift if i.technology changes. ii.the prices of factors of production change. iii.productivity changes.

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

When plotted against the total output,what does the total fixed cost curve look like?

From a firm's viewpoint,opportunity cost is the

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

________ cost is defined as a cost of production that does not entail a direct money payment.

Marginal cost

The return to entrepreneurship is known as

-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 total cost equals

Which of the following is FALSE?

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

Which of the following is an explicit cost of production?

-When the average product is at its maximum,

Diseconomies of scale is a result of

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

In the long run,if 1,000 units are produced at a cost of $8,000 and 1,200 units at a cost of $9,200,then over this range of output there are

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 worker is hired,the average product of labor the marginal product of labor.