Question 1

Moving along the total product curve,which of the following is held constant?

Accepted Answer

A)  quantity of labor 
B)  total product 
C)  technology 
D)  total cost 
E)  None of the above answers is correct. 
A)  quantity of labor 
B)  total product 
C)  technology 
D)  total cost 
E)  None of the above answers is correct.

Question 2

When marginal cost is positive,total cost is ________ as output increases.

Accepted Answer

A)  increasing 
B)  decreasing 
C)  constant 
D)  negative 
E)  undefined 
A)  increasing 
B)  decreasing 
C)  constant 
D)  negative 
E)  undefined

Question 3

The long run average cost curve

Accepted Answer

A)  is the sum of a firm's short run average cost curves. 
B)  shows the lowest average cost facing a firm as it increases output changing both its plant and labor force. 
C)  initially rises when output increases and then falls when output increases. 
D)  always falls as output increases. 
E)  always rises as output increases. 
A)  is the sum of a firm's short run average cost curves. 
B)  shows the lowest average cost facing a firm as it increases output changing both its plant and labor force. 
C)  initially rises when output increases and then falls when output increases. 
D)  always falls as output increases. 
E)  always rises as output increases.

Question 4

-The above table gives some production and cost information for Flaming Fernando's,a restaurant that sells Fiery Frijoles.What is the total fixed cost of producing 4,500 frijoles?

Accepted Answer

A)  $1000 
B)  $8000 
C)  $9000 
D)  $2,000 
E)  More information is needed to determine the answer. 
A)  $1000 
B)  $8000 
C)  $9000 
D)  $2,000 
E)  More information is needed to determine the answer.

Question 5

The figure above shows some of a firm's cost curves.
-Based on the figure above,curve B 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 6

-The above table gives the total cost schedule for oil changes at the local Jiffy Lube.
a.What is Jiffy Lube's total fixed cost?
b.What is the total variable cost of 2 oil changes?
c.What is the average variable cost of 4 oil changes?
d.What is the average fixed cost of 2 oil changes?
e.What is the marginal cost of the 3rd oil change?

Accepted Answer

a.The total fixed cost is $10.At zero ou

Question 7

A cost incurred in the production of a good or service and for which the firm does not need to make a direct monetary payment,is referred to as ________ cost.

Accepted Answer

A)  a minimized 
B)  a maximized 
C)  an explicit 
D)  an implicit 
E)  an invisible 
A)  a minimized 
B)  a maximized 
C)  an explicit 
D)  an implicit 
E)  an invisible

Question 8

Jake opens a pig farm in Idaho.To start his farm,he uses his entire $50,000 of savings from his savings account.The bank was paying him $2,500 interest on his saving.Explain why the $2,500 is one of Jake's costs.

Accepted Answer

When Jake provides the $50,000 to financ

Question 9

-The table above gives the cost schedule for The X Firm.The data show that The X Firm's ________ curve is ________.

Accepted Answer

A)  ATC; U-shaped because the firm fixed costs are spread over larger amounts of output and the firm experiences decreasing marginal returns 
B)  AFC; U-shaped because the firm spreads its fixed costs over larger and large amounts of output 
C)  AVC; always declining because costs are divided across ever-increasing amounts of output 
D)  MC; U-shaped because explicit costs exceed implicit costs 
E)  ATC; U-shaped because output increases as costs increase 
A)  ATC; U-shaped because the firm fixed costs are spread over larger amounts of output and the firm experiences decreasing marginal returns 
B)  AFC; U-shaped because the firm spreads its fixed costs over larger and large amounts of output 
C)  AVC; always declining because costs are divided across ever-increasing amounts of output 
D)  MC; U-shaped because explicit costs exceed implicit costs 
E)  ATC; U-shaped because output increases as costs increase

Question 10

If a firm does not produce any output,its

Accepted Answer

A)  total fixed cost must be zero. 
B)  economic profit must be positive. 
C)  total variable cost must be zero. 
D)  total costs must be zero. 
E)  marginal cost must be zero. 
A)  total fixed cost must be zero. 
B)  economic profit must be positive. 
C)  total variable cost must be zero. 
D)  total costs must be zero. 
E)  marginal cost must be zero.

Question 11

Dr.Khan starts his own dental practice after quitting his $150,000 job at The Mall Dental Clinic.His revenues for the first year are $500,000.He paid $90,000 in rent for the dental office,$60,000 for his office manager's salary,$24,000 for the dental hygienist,$150,000 for insurance,and $6,000 for other miscellaneous costs.The normal profit from running his business is $20,000.

Accepted Answer

A)  His explicit costs are $330,000. 
B)  His implicit costs are $170,000. 
C)  His economic profit is zero. 
D)  Only answers A and C are correct. 
E)  Answers A, B, and C are correct. 
A)  His explicit costs are $330,000. 
B)  His implicit costs are $170,000. 
C)  His economic profit is zero. 
D)  Only answers A and C are correct. 
E)  Answers A, B, and C are correct.

Question 12

To produce more output in the short run,a firm must employ more of

Accepted Answer

A)  all its resources. 
B)  its fixed resources. 
C)  its variable resources. 
D)  the least costly resources regardless of whether they are fixed or variable. 
E)  Firms cannot produce more output in the short run. 
A)  all its resources. 
B)  its fixed resources. 
C)  its variable resources. 
D)  the least costly resources regardless of whether they are fixed or variable. 
E)  Firms cannot produce more output in the short run.

Question 13

Costs paid in money to hire a resource is

Accepted Answer

A)  normal profit. 
B)  an implicit cost. 
C)  an explicit cost. 
D)  an alternative-use cost. 
E)  economic profit. 
A)  normal profit. 
B)  an implicit cost. 
C)  an explicit cost. 
D)  an alternative-use cost. 
E)  economic profit.

Question 14

Lauren runs a chili restaurant in San Francisco.Her total revenue last year was $110,000.The rent on her restaurant was $48,000,her labor costs were $42,000,and her materials,food and other variable costs were $20,000.Lauren could have worked as a biologist and earned $50,000 per year.An economist calculates her implicit costs as

Accepted Answer

A)  $150,000. 
B)  $63,000. 
C)  $50,000. 
D)  $110,000. 
E)  $0 because Lauren did not work as a biologist. 
A)  $150,000. 
B)  $63,000. 
C)  $50,000. 
D)  $110,000. 
E)  $0 because Lauren did not work as a biologist.

Question 15

Which of the following contributes to increasing marginal returns?

Accepted Answer

A)  decreasing implicit costs 
B)  increasing explicit costs 
C)  specialization of labor 
D)  Both answers A and B are correct. 
E)  Both answers A and C are correct. 
A)  decreasing implicit costs 
B)  increasing explicit costs 
C)  specialization of labor 
D)  Both answers A and B are correct. 
E)  Both answers A and C are correct.

Question 16

The long-run average cost curve is U-shaped because of which of the following?

Accepted Answer

A)  decreasing marginal returns as more labor is hired 
B)  constant fixed costs as output is increased 
C)  economies and diseconomies of scale 
D)  increasing marginal returns as more labor is hired 
E)  decreasing average fixed costs as output is increased 
A)  decreasing marginal returns as more labor is hired 
B)  constant fixed costs as output is increased 
C)  economies and diseconomies of scale 
D)  increasing marginal returns as more labor is hired 
E)  decreasing average fixed costs as output is increased

Question 17

When a firm's long-run average total cost falls as its output increases,the firm is experiencing

Accepted Answer

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

Question 18

The figure above shows some of a firm's cost curves.
-Based on the figure above,curve A 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 19

A firm's total revenue minus its total opportunity cost is called its

Accepted Answer

A)  accounting profit. 
B)  normal profit. 
C)  economic profit. 
D)  abnormal profit. 
E)  entrepreneur's profit. 
A)  accounting profit. 
B)  normal profit. 
C)  economic profit. 
D)  abnormal profit. 
E)  entrepreneur's profit.

Question 20

If 25 workers can pick 100 flats of strawberries per hour,then average product is

Accepted Answer

A)  100 flats per hour. 
B)  125 flats per hour. 
C)  75 flats per hour. 
D)  4 flats per hour. 
E)  More information is needed about how many flats 24 workers can pick. 
A)  100 flats per hour. 
B)  125 flats per hour. 
C)  75 flats per hour. 
D)  4 flats per hour. 
E)  More information is needed about how many flats 24 workers can pick.

Moving along the total product curve,which of the following is held constant?

When marginal cost is positive,total cost is ________ as output increases.

The long run average cost curve

-The above table gives some production and cost information for Flaming Fernando's,a restaurant that sells Fiery Frijoles.What is the total fixed cost of producing 4,500 frijoles?

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

A cost incurred in the production of a good or service and for which the firm does not need to make a direct monetary payment,is referred to as ________ cost.

Jake opens a pig farm in Idaho.To start his farm,he uses his entire $50,000 of savings from his savings account.The bank was paying him $2,500 interest on his saving.Explain why the $2,500 is one of Jake's costs.

-The table above gives the cost schedule for The X Firm.The data show that The X Firm's curve is .

If a firm does not produce any output,its

To produce more output in the short run,a firm must employ more of

Costs paid in money to hire a resource is

Which of the following contributes to increasing marginal returns?

The long-run average cost curve is U-shaped because of which of the following?

When a firm's long-run average total cost falls as its output increases,the firm is experiencing

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

A firm's total revenue minus its total opportunity cost is called its

If 25 workers can pick 100 flats of strawberries per hour,then average product 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

Moving along the total product curve,which of the following is held constant?

When marginal cost is positive,total cost is ________ as output increases.

The long run average cost curve

-The above table gives some production and cost information for Flaming Fernando's,a restaurant that sells Fiery Frijoles.What is the total fixed cost of producing 4,500 frijoles?

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

A cost incurred in the production of a good or service and for which the firm does not need to make a direct monetary payment,is referred to as ________ cost.

Jake opens a pig farm in Idaho.To start his farm,he uses his entire $50,000 of savings from his savings account.The bank was paying him $2,500 interest on his saving.Explain why the $2,500 is one of Jake's costs.

-The table above gives the cost schedule for The X Firm.The data show that The X Firm's ________ curve is ________.

If a firm does not produce any output,its

To produce more output in the short run,a firm must employ more of

Costs paid in money to hire a resource is

Which of the following contributes to increasing marginal returns?

The long-run average cost curve is U-shaped because of which of the following?

When a firm's long-run average total cost falls as its output increases,the firm is experiencing

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

A firm's total revenue minus its total opportunity cost is called its

If 25 workers can pick 100 flats of strawberries per hour,then average product 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 gives the cost schedule for The X Firm.The data show that The X Firm's curve is .