Question 1

The cost of producing the typical unit of output is the firm's

Accepted Answer

A)  average total cost.
B)  opportunity cost.
C)  variable cost.
D)  marginal cost.E) A) and B)
F) None of the above

Question 2

Table 13-18 
-Refer to Table 13-18. What is the shape of the average-fixed-cost curve?

Accepted Answer

AFC is always declining as out...

Question 3

Scenario 13-2
Chelsea wants to start her own Christmas ornament business. She can purchase a suitable factory that costs $100,000. Chelsea currently has $150,000 in the bank earning 3 percent interest per year.
-Refer to Scenario 13-2. Suppose Chelsea purchases the factory using her own money. What is Chelsea's annual implicit opportunity cost of purchasing the factory?

Accepted Answer

A)  $2,000
B)  $3,000
C)  $4,500
D)  $5,000E) B) and C)
F) A) and D)

Question 4

In the long run a company that produces and sells popcorn incurs total costs of $1,050 when output is 90 canisters and $1,200 when output is 120 canisters. The popcorn company exhibits

Accepted Answer

A)  diseconomies of scale because total cost is rising as output rises.
B)  diseconomies of scale because average total cost is rising as output rises.
C)  economies of scale because total cost is rising as output rises.
D)  economies of scale because average total cost is falling as output rises.E) A) and D)
F) None of the above

Question 5

Average total cost equals

Accepted Answer

A)  change in total costs divided by quantity produced.
B)  change in total costs divided by change in quantity produced.
C)  (fixed costs + variable costs)  divided by quantity produced.
D)  (fixed costs + variable costs)  divided by change in quantity produced.E) All of the above
F) B) and C)

Question 6

Diminishing marginal product suggests that the marginal

Accepted Answer

A)  cost of an extra worker is unchanged.
B)  cost of an extra worker is less than the previous worker's marginal cost.
C)  product of an extra worker is less than the previous worker's marginal product.
D)  product of an extra worker is greater than the previous worker's marginal product.E) B) and D)
F) B) and C)

Question 7

Which of the following statements is not correct?

Accepted Answer

A)  Fixed costs are constant.
B)  Variable costs change as output changes.
C)  Average fixed costs are constant.
D)  Average total costs are typically U-shaped.E) None of the above
F) All of the above

Question 8

The difference between accounting profit and economic profit is

Accepted Answer

A)  explicit costs.
B)  implicit costs.
C)  total revenue.
D)  marginal product.E) B) and C)
F) None of the above

Question 9

Table 13-1 
-Refer to Table 13-1. What is total output when 5 workers are hired?

Accepted Answer

A)  -10
B)  90
C)  185
D)  225E) B) and D)
F) C) and D)

Question 10

Table 13-1 
-Refer to Table 13-1. What is total output when 3 workers are hired?

Accepted Answer

A)  15
B)  60
C)  105
D)  135E) B) and D)
F) B) and C)

Question 11

If the production function exhibits diminishing marginal product, the total cost function gets steeper as the quantity of output increases.
​

Accepted Answer

A) True 
 B)False

Question 12

Table 13-17
Consider the following table of long-run total cost for four different firms: 
-Refer to Table 13-17. Which firm has economies of scale over the entire range of output?

Accepted Answer

A)  Firm 1 only
B)  Firms 1 and 2 only
C)  Firm 2 only
D)  Firm 3 onlyE) A) and B)
F) A) and C)

Question 13

If marginal cost is greater than average total cost, then

Accepted Answer

A)  profits are increasing.
B)  economies of scale are becoming greater.
C)  average total cost remains constant.
D)  average total cost is increasing.E) All of the above
F) None of the above

Question 14

Because of the greater flexibility that firms have in the long run, all short-run cost curves lie on or above the long-run curve.

Accepted Answer

A) True 
 B)False

Question 15

Assume Jack received all As in his classes last semester. If Jack gets all Bs in his classes this semester, his GPA may or may not fall.

Accepted Answer

A) True 
 B)False

Question 16

Figure 13-9
The figure below depicts average total cost functions for a firm that produces automobiles. 
-Refer to Figure 13-9. The firm experiences constant returns to scale at which output levels?

Accepted Answer

A)  output levels less than M
B)  output levels between M and N
C)  output levels greater than N
D)  All of the above are correct as long as the firm is operating in the long run.E) A) and D)
F) All of the above

Question 17

When average cost is greater than marginal cost, marginal cost must be

Accepted Answer

A)  rising.
B)  falling.
C)  constant.
D)  The direction of change in marginal cost cannot be determined from this information.E) A) and B)
F) B) and D)

Question 18

Fixed costs can be defined as costs that

Accepted Answer

A)  vary inversely with production.
B)  vary in proportion with production.
C)  are incurred only when production is large enough.
D)  are incurred even if nothing is produced.E) C) and D)
F) None of the above

Question 19

Figure 13-2 
-Refer to Figure 13-2. If the figure represented production at a cookie factory, the factory would be experiencing

Accepted Answer

A)  diminishing marginal product of workers.
B)  diminishing marginal cost of cookie production.
C)  decreasing cost of cookie production.
D)  decreasing output of cookies.E) C) and D)
F) B) and C)

Question 20

Consider a small family wheat farm. List some examples of explicit costs of farming.

Accepted Answer

seeds, fertilizer, pesticide, ...

Exam 13: The Costs of Production

Assume Jack received all As in his classes last semester. If Jack gets all Bs in his classes this semester, his GPA may or may not fall.

Correct Answer
verified

The cost of producing the typical unit of output is the firm's

Correct Answer
verified

Consider a small family wheat farm. List some examples of explicit costs of farming.

Correct Answer
verified
seeds, fertilizer, pesticide, ...
View Answer

Correct Answer
verified

If marginal cost is greater than average total cost, then

Correct Answer
verified

Average total cost equals

Correct Answer
verified

The difference between accounting profit and economic profit is

Correct Answer
verified

Figure 13-9 The figure below depicts average total cost functions for a firm that produces automobiles. -Refer to Figure 13-9. The firm experiences constant returns to scale at which output levels?

Correct Answer
verified

Diminishing marginal product suggests that the marginal

Correct Answer
verified

Which of the following statements is not correct?

Correct Answer
verified

Fixed costs can be defined as costs that

Correct Answer
verified

Table 13-18 -Refer to Table 13-18. What is the shape of the average-fixed-cost curve?

Correct Answer
verified
AFC is always declining as out...
View Answer

In the long run a company that produces and sells popcorn incurs total costs of $1,050 when output is 90 canisters and $1,200 when output is 120 canisters. The popcorn company exhibits

Correct Answer
verified

When average cost is greater than marginal cost, marginal cost must be

Correct Answer
verified

If the production function exhibits diminishing marginal product, the total cost function gets steeper as the quantity of output increases.

Correct Answer
verified

Table 13-1 -Refer to Table 13-1. What is total output when 5 workers are hired?

Correct Answer
verified

Because of the greater flexibility that firms have in the long run, all short-run cost curves lie on or above the long-run curve.

Correct Answer
verified

Table 13-1 -Refer to Table 13-1. What is total output when 3 workers are hired?

Correct Answer
verified

Table 13-17 Consider the following table of long-run total cost for four different firms: -Refer to Table 13-17. Which firm has economies of scale over the entire range of output?

Correct Answer
verified

Figure 13-2 -Refer to Figure 13-2. If the figure represented production at a cookie factory, the factory would be experiencing

Correct Answer
verified

Exam 13: The Costs of Production

Assume Jack received all As in his classes last semester. If Jack gets all Bs in his classes this semester, his GPA may or may not fall.

Correct AnswerverifiedShow Answer

The cost of producing the typical unit of output is the firm's

Correct AnswerverifiedShow Answer

Consider a small family wheat farm. List some examples of explicit costs of farming.

Correct Answerverifiedseeds, fertilizer, pesticide, ...View AnswerShow Answer

Correct AnswerverifiedShow Answer

If marginal cost is greater than average total cost, then

Correct AnswerverifiedShow Answer

Average total cost equals

Correct AnswerverifiedShow Answer

The difference between accounting profit and economic profit is

Correct AnswerverifiedShow Answer

Figure 13-9 The figure below depicts average total cost functions for a firm that produces automobiles. -Refer to Figure 13-9. The firm experiences constant returns to scale at which output levels?

Correct AnswerverifiedShow Answer

Diminishing marginal product suggests that the marginal

Correct AnswerverifiedShow Answer

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

Fixed costs can be defined as costs that

Correct AnswerverifiedShow Answer

Table 13-18 -Refer to Table 13-18. What is the shape of the average-fixed-cost curve?

Correct AnswerverifiedAFC is always declining as out...View AnswerShow Answer

In the long run a company that produces and sells popcorn incurs total costs of $1,050 when output is 90 canisters and $1,200 when output is 120 canisters. The popcorn company exhibits

Correct AnswerverifiedShow Answer

When average cost is greater than marginal cost, marginal cost must be

Correct AnswerverifiedShow Answer

If the production function exhibits diminishing marginal product, the total cost function gets steeper as the quantity of output increases. ​

Correct AnswerverifiedShow Answer

Table 13-1 -Refer to Table 13-1. What is total output when 5 workers are hired?

Correct AnswerverifiedShow Answer

Because of the greater flexibility that firms have in the long run, all short-run cost curves lie on or above the long-run curve.

Correct AnswerverifiedShow Answer

Table 13-1 -Refer to Table 13-1. What is total output when 3 workers are hired?

Correct AnswerverifiedShow Answer

Table 13-17 Consider the following table of long-run total cost for four different firms: -Refer to Table 13-17. Which firm has economies of scale over the entire range of output?

Correct AnswerverifiedShow Answer

Figure 13-2 -Refer to Figure 13-2. If the figure represented production at a cookie factory, the factory would be experiencing

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
seeds, fertilizer, pesticide, ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
AFC is always declining as out...
View Answer

Correct Answer
verified

Correct Answer
verified

If the production function exhibits diminishing marginal product, the total cost function gets steeper as the quantity of output increases.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified