Question 1

A firm has the short-run total cost function c(y)= 9y2 + 144.At what quantity of output is short-run average cost minimized?

Accepted Answer

A)  4 
B)  16 
C)  0.75 
D)  3 
E)  None of the above. 
A)  4 
B)  16 
C)  0.75 
D)  3 
E)  None of the above.

Question 2

The cost function C(y)=100 +3y2 has marginal cost less than average cost for all positive levels of output.

Accepted Answer

A) True 
 B)False

Question 3

North American Manufacturing has the production function Q =min{0.25K,0.5L},where K is units of capital and L is hours of labor.
a.Without any warning,the price of capital doubles.What should North American Manufacturing do in response?
b.If North American were planning a new manufacturing plant,would there be any advantages to a larger facility?

Accepted Answer

a.North American Man

Question 4

A firm has a short-run cost function c(y)= 3y + 11 for y  $\gt$ 0 and c(0)=8.The firm's quasi-fixed costs are

Accepted Answer

A)  $8. 
B)  $11. 
C)  $3. 
D)  $7. 
E)  They are not possible to determine from this information. 
A)  $8. 
B)  $11. 
C)  $3. 
D)  $7. 
E)  They are not possible to determine from this information.

Question 5

The cost function C(y)= 10 + 3y has marginal cost less than average cost for all levels of output.

Accepted Answer

A) True 
 B)False

Question 6

The marginal cost curve passes through the minimum point of the average fixed cost curve.

Accepted Answer

A) True 
 B)False

Question 7

A goatherd has the cost function c(y)=4y2,where y is the number of tubs of goat cheese she makes per month.She faces a competitive market for goat cheese,with a price of $40 a tub.How many tubs should she produce per month?

Accepted Answer

A)  The square root of 40 
B)  16 
C)  5 
D)  The square root of 10 
E)  2.50 
A)  The square root of 40 
B)  16 
C)  5 
D)  The square root of 10 
E)  2.50

Question 8

A firm has a short-run cost function c(y)= 3y + 14 for y  $\gt$0 and c(0)=10.The firm's quasi-fixed costs are

Accepted Answer

A)  $10. 
B)  $4. 
C)  $9. 
D)  $14. 
E)  They are not possible to determine from this information. 
A)  $10. 
B)  $4. 
C)  $9. 
D)  $14. 
E)  They are not possible to determine from this information.

Question 9

Average cost can never rise while marginal costs are declining.

Accepted Answer

A) True 
 B)False

Question 10

Average fixed cost curves will be U-shaped if the marginal cost curve is upward sloping.

Accepted Answer

A) True 
 B)False

Question 11

If a competitive firm uses two inputs and has the production function F(x1,x2)= x1/21 +x1/2 2,then its marginal cost curve is horizontal.

Accepted Answer

A) True 
 B)False

Question 12

A firm has the long-run cost function C(Q)= 4Q2 + 64.In the long run,it will supply a positive amount of output,so long as the price is greater than

Accepted Answer

A)  $64. 
B)  $72. 
C)  $16. 
D)  $32. 
E)  $37. 
A)  $64. 
B)  $72. 
C)  $16. 
D)  $32. 
E)  $37.

Question 13

Not long ago,the Canadian edition of a famous textbook on principles of economics had a diagram depicting a U-shaped average fixed cost curve.This occasioned great mirth around the campfires of some economists in the Great White North and did much to shorten a long hard winter.Explain what is wrong with drawing a U-shaped average fixed cost curve.

Accepted Answer

Average fixed cost must declin

Question 14

Florence's Restaurant estimates that its total costs of providing Q meals per month is given by TC = 8,000 +6Q.If Florence charges $7 per meal,what is its break even level of output?

Accepted Answer

A)  1,333.33 meals 
B)  1,142.86 meals 
C)  615.38 meals 
D)  16,000 meals 
E)  8,000 meals 
A)  1,333.33 meals 
B)  1,142.86 meals 
C)  615.38 meals 
D)  16,000 meals 
E)  8,000 meals

Question 15

A goatherd has the cost function c(y)=2y2,where y is the number of tubs of goat cheese she makes per month.She faces a competitive market for goat cheese,with a price of $40 a tub.How many tubs should she produce per month?

Accepted Answer

A)  10 
B)  The square root of 40 
C)  4 
D)  The square root of 20 
E)  5 
A)  10 
B)  The square root of 40 
C)  4 
D)  The square root of 20 
E)  5

Question 16

Mr.Dent Carr's total costs are 2s2 + 45s + 30.If he repairs 15 cars,his average variable costs will be

Accepted Answer

A)  $77. 
B)  $75. 
C)  $150. 
D)  $105. 
E)  $52.50. 
A)  $77. 
B)  $75. 
C)  $150. 
D)  $105. 
E)  $52.50.

Question 17

Mr.Dent Carr's total costs are 2s2 + 40s + 40.If he repairs 10 cars,his average variable costs will be

Accepted Answer

A)  $60. 
B)  $64. 
C)  $80. 
D)  $120. 
E)  $40. 
A)  $60. 
B)  $64. 
C)  $80. 
D)  $120. 
E)  $40.

Question 18

Touchie McFeelie from your workbook has a production function (0.1)J1/2 J3/4,where J is the number of old jokes used and L is the number of hours of cartoonists' labor.Touchie is stuck with 400 old jokes for which he paid 6 dollars each.If the hourly wage rate for cartoonists is 4 dollars,then the total cost of producing 16 comics books is

Accepted Answer

A)  2,464 dollars. 
B)  1,232 dollars. 
C)  2,480 dollars. 
D)  3,696 dollars. 
E)  616 dollars. 
A)  2,464 dollars. 
B)  1,232 dollars. 
C)  2,480 dollars. 
D)  3,696 dollars. 
E)  616 dollars.

Question 19

A firm's production function is given by q =min{M,L1/2},where M is the number of machines and L is the amount of labor that it uses.The price of labor is $1and the price of machines is $4 per unit.The firm's long-run marginal cost curve is

Accepted Answer

A)  upward sloping and gets flatter as Q increases. 
B)  a straight line with slope 2. 
C)  a straight line with slope 1. 
D)  upward sloping and gets steeper as Q increases. 
E)  a straight line with slope 4. 
A)  upward sloping and gets flatter as Q increases. 
B)  a straight line with slope 2. 
C)  a straight line with slope 1. 
D)  upward sloping and gets steeper as Q increases. 
E)  a straight line with slope 4.

Question 20

If Green Acres Turf Farm's total cost of producing acres of sod is TC = 5Q2 +25Q+ 40,the marginal cost of producing the 10th acre of sod is

Accepted Answer

A)  $125. 
B)  $40. 
C)  $25. 
D)  $75. 
E)  $275. 
A)  $125. 
B)  $40. 
C)  $25. 
D)  $75. 
E)  $275.

Exam 22:Cost Curves-Part A

A firm has the short-run total cost function c(y)= 9y2 + 144.At what quantity of output is short-run average cost minimized?

The cost function C(y)=100 +3y2 has marginal cost less than average cost for all positive levels of output.

A firm has a short-run cost function c(y)= 3y + 11 for y >\gt> 0 and c(0)=8.The firm's quasi-fixed costs are

The cost function C(y)= 10 + 3y has marginal cost less than average cost for all levels of output.

The marginal cost curve passes through the minimum point of the average fixed cost curve.

A goatherd has the cost function c(y)=4y2,where y is the number of tubs of goat cheese she makes per month.She faces a competitive market for goat cheese,with a price of $40 a tub.How many tubs should she produce per month?

A firm has a short-run cost function c(y)= 3y + 14 for y >\gt> 0 and c(0)=10.The firm's quasi-fixed costs are

Average cost can never rise while marginal costs are declining.

Average fixed cost curves will be U-shaped if the marginal cost curve is upward sloping.

If a competitive firm uses two inputs and has the production function F(x1,x2)= x1/21 +x1/2 2,then its marginal cost curve is horizontal.

A firm has the long-run cost function C(Q)= 4Q2 + 64.In the long run,it will supply a positive amount of output,so long as the price is greater than

Florence's Restaurant estimates that its total costs of providing Q meals per month is given by TC = 8,000 +6Q.If Florence charges $7 per meal,what is its break even level of output?

A goatherd has the cost function c(y)=2y2,where y is the number of tubs of goat cheese she makes per month.She faces a competitive market for goat cheese,with a price of $40 a tub.How many tubs should she produce per month?

Mr.Dent Carr's total costs are 2s2 + 45s + 30.If he repairs 15 cars,his average variable costs will be

Mr.Dent Carr's total costs are 2s2 + 40s + 40.If he repairs 10 cars,his average variable costs will be

A firm's production function is given by q =min{M,L1/2},where M is the number of machines and L is the amount of labor that it uses.The price of labor is $1and the price of machines is $4 per unit.The firm's long-run marginal cost curve is

If Green Acres Turf Farm's total cost of producing acres of sod is TC = 5Q2 +25Q+ 40,the marginal cost of producing the 10th acre of sod is

Demand-Part A

Revealed Preference-Part A

Revealed Preference-Part B

Slutsky Equation-Part A

Slutsky Equation-Part B

Buying and Selling-Part A

Buying and Selling-Part B

Intertemporal Choice-Part A

Intertemporal Choice-Part B

Asset Markets-Part A

Asset Markets-Part B

Uncertainty-Part A

Uncertainty-Part B

Risky Assets-Part A

Risky Assets-Part B

Consumers Surplus-Part A

Consumers Surplus-Part B

Market Demand-Part A

Market Demand-Part B

Equilibrium-Part A

Equilibrium-Part B

Auctions-Part A

Auctions-Part B

Technology-Part A

Technology-Part B

Profit Maximization-Part A

Profit Maximization-Part B

Cost Minimization-Part A

Cost Minimization-Part B

Cost Curves-Part B

Firm Supply-Part A

Firm Supply-Part B

Industry Supply-Part A

Industry Supply-Part B

Monopoly-Part A

Monopoly-Part B

Monopoly Behavior-Part A

Monopoly Behavior-Part B

Factor Markets-Part A

Factor Markets-Part B

Oligopoly-Part A

Oligopoly-Part B

Game Theory-Part A

Game Theory-Part B

Game Applications-Part A

Game Applications-Part B

Behavioral Economics-Part A

Exchange-Part A

Exchange-Part B

Production-Part A

Production-Part B

Welfare-Part A

Welfare-Part B

Externalities-Part A

Externalities-Part B

Information Technology-Part A

Information Technology-Part B

Public Goods-Part A

Public Goods-Part B

Asymmetric Information-Part A

Asymmetric Information-Part B

Filters

A firm has a short-run cost function c(y)= 3y + 11 for y $\gt$ 0 and c(0)=8.The firm's quasi-fixed costs are

A firm has a short-run cost function c(y)= 3y + 14 for y $\gt$ 0 and c(0)=10.The firm's quasi-fixed costs are

If a competitive firm uses two inputs and has the production function F(x1,x2)= x^1/21 +x^1/22,then its marginal cost curve is horizontal.

Mr.Dent Carr's total costs are 2s² + 45s + 30.If he repairs 15 cars,his average variable costs will be

Mr.Dent Carr's total costs are 2s² + 40s + 40.If he repairs 10 cars,his average variable costs will be

A firm's production function is given by q =min{M,L^1/2},where M is the number of machines and L is the amount of labor that it uses.The price of labor is $1and the price of machines is $4 per unit.The firm's long-run marginal cost curve is