Question 1

The typical total-cost curve is U-shaped.

Accepted Answer

A) True 
 B)False

Question 2

Table 13-8
 
-Refer to Table 13-8.What is the marginal cost of producing the fifth unit of output?

Accepted Answer

A)   $4
B)   $40
C)   $50
D)   $70E) B) and C)
F) A) and D)

Question 3

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) A) and B)
F) A) and D)

Question 4

Diminishing marginal productivity implies decreasing total product.

Accepted Answer

A) True 
 B)False

Question 5

The amount of money that a firm pays to buy inputs is called

Accepted Answer

A)   total cost.
B)   variable cost.
C)   marginal cost.
D)   fixed cost.E) A) and B)
F) A) and C)

Question 6

Economists normally assume that the goal of a firm is to earn
(i) profits as large as possible,even if it means reducing output.
(ii) profits as large as possible,even if it means incurring a higher total cost.
(iii) revenues as large as possible,even if it reduces profits.

Accepted Answer

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

Question 7

Table 13-12
Betty's Bakery
 
-Refer to Table 13-12.What is the marginal cost of the 2nd cake at Betty's Bakery?

Accepted Answer

A)   $14
B)   $15
C)   $28
D)   $34E) All of the above
F) B) and C)

Question 8

Figure 13-9
The figure below depicts average total cost functions for a firm that produces automobiles.
 
-Refer to Figure 13-9.In the long run,the firm can operate on which of the following average total cost curves?

Accepted Answer

A)   ATCA
B)   ATCB
C)   ATCC
D)   All of the above are correct.E) None of the above
F) A) and C)

Question 9

When the marginal product of an input declines as the quantity of that input increases,the production function exhibits

Accepted Answer

A)   increasing marginal product.
B)   diminishing marginal product.
C)   diminishing total product.
D)   Both b and c are correct.E) All of the above
F) A) and B)

Question 10

Scenario 13-13
Joan grows pumpkins. If Joan plants no seeds on her farm, she gets no harvest. If she plants 1 bag of seeds, she gets 500 pumpkins. If she plants 2 bags, she gets 800 pumpkins. If she plants 3 bags, she gets 900 pumpkins. A bag of seeds costs $100, and seeds are her only cost.
-Refer to Scenario 13-13.Joan's total-cost curve is

Accepted Answer

A)   increasing at an increasing rate.
B)   increasing at a decreasing rate.
C)   increasing at a constant rate.
D)   decreasing.E) C) and D)
F) None of the above

Question 11

Tom's Tent Company has total fixed costs of $300,000 per year.The firm's average variable cost is $80 for 10,000 tents.At that level of output,the firm's average total costs equal

Accepted Answer

A)   $80
B)   $90
C)   $100
D)   $110E) C) and D)
F) B) and C)

Question 12

A firm has a fixed cost of $700 in its first year of operation.When the firm produces 99 units of output,its total costs are $4,000.The marginal cost of producing the 100th unit of output is $200.What is the total cost of producing 100 units?

Accepted Answer

A)   $42
B)   $900
C)   $4,200
D)   $4,900E) All of the above
F) B) and C)

Question 13

Table 13-12
Betty's Bakery
 
-Refer to Table 13-12.What is the variable cost of producing 5 cakes at Betty's Bakery?

Accepted Answer

A)   $64
B)   $85
C)   $90
D)   $100E) None of the above
F) A) and C)

Question 14

Which of the following would be an example of an implicit cost?
(i) forgone investment opportunities
(ii) wages of workers
(iii) raw materials costs

Accepted Answer

A)   (i)  only
B)   (ii)  only
C)   (ii)  and (iii)  only
D)   (i)  and (iii)  onlyE) None of the above
F) A) and B)

Question 15

Which of the following is an example of an implicit cost?
(i) the owner of a firm forgoing an opportunity to earn a large salary working for a Wall Street brokerage firm
(ii) interest paid on the firm's debt
(iii) rent paid by the firm to lease office space

Accepted Answer

A)   (ii)  and (iii)  only
B)   (i)  and (iii)  only
C)   (i)  only
D)   (iii)  onlyE) A) and C)
F) A) and D)

Question 16

The amount of money that a wheat farmer could have earned if he had planted barley instead of wheat is

Accepted Answer

A)   an explicit cost.
B)   an accounting cost
C)   an implicit cost.
D)   forgone accounting profit.E) None of the above
F) B) and D)

Question 17

Accountants often ignore implicit costs.

Accepted Answer

A) True 
 B)False

Question 18

In the long run Firm A incurs total costs of $1,050 when output is 30 units and $1,200 when output is 40 units.Firm A 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) All of the above
F) None of the above

Question 19

Suppose that a "doggie day care" firm uses only two inputs: hourly workers (labor) and a building (capital) .In the short run,the firm most likely considers

Accepted Answer

A)   both labor and capital to be fixed.
B)   both labor and capital to be variable.
C)   labor to be variable and capital to be fixed.
D)   capital to be variable and labor to be fixed.E) None of the above
F) A) and C)

Question 20

The amount by which total cost rises when the firm produces one additional unit of output is called

Accepted Answer

A)   average cost.
B)   marginal cost.
C)   fixed cost.
D)   variable cost.E) C) and D)
F) B) and D)

Exam 13: The Costs of Production.

The typical total-cost curve is U-shaped.

Correct Answer
verified

The amount of money that a firm pays to buy inputs is called

Correct Answer
verified

Tom's Tent Company has total fixed costs of $300,000 per year.The firm's average variable cost is $80 for 10,000 tents.At that level of output,the firm's average total costs equal

Correct Answer
verified

Table 13-12 Betty's Bakery -Refer to Table 13-12.What is the variable cost of producing 5 cakes at Betty's Bakery?

Correct Answer
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The amount by which total cost rises when the firm produces one additional unit of output is called

Correct Answer
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In the long run Firm A incurs total costs of $1,050 when output is 30 units and $1,200 when output is 40 units.Firm A exhibits

Correct Answer
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Economists normally assume that the goal of a firm is to earn (i) profits as large as possible,even if it means reducing output. (ii) profits as large as possible,even if it means incurring a higher total cost. (iii) revenues as large as possible,even if it reduces profits.

Correct Answer
verified

The amount of money that a wheat farmer could have earned if he had planted barley instead of wheat 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.In the long run,the firm can operate on which of the following average total cost curves?

Correct Answer
verified

Which of the following is an example of an implicit cost? (i) the owner of a firm forgoing an opportunity to earn a large salary working for a Wall Street brokerage firm (ii) interest paid on the firm's debt (iii) rent paid by the firm to lease office space

Correct Answer
verified

When the marginal product of an input declines as the quantity of that input increases,the production function exhibits

Correct Answer
verified

Table 13-8 -Refer to Table 13-8.What is the marginal cost of producing the fifth unit of output?

Correct Answer
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Which of the following statements is not correct?

Correct Answer
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Correct Answer
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Diminishing marginal productivity implies decreasing total product.

Correct Answer
verified

Which of the following would be an example of an implicit cost? (i) forgone investment opportunities (ii) wages of workers (iii) raw materials costs

Correct Answer
verified

Accountants often ignore implicit costs.

Correct Answer
verified

Table 13-12 Betty's Bakery -Refer to Table 13-12.What is the marginal cost of the 2nd cake at Betty's Bakery?

Correct Answer
verified

A firm has a fixed cost of $700 in its first year of operation.When the firm produces 99 units of output,its total costs are $4,000.The marginal cost of producing the 100th unit of output is $200.What is the total cost of producing 100 units?

Correct Answer
verified

Suppose that a "doggie day care" firm uses only two inputs: hourly workers (labor) and a building (capital) .In the short run,the firm most likely considers

Correct Answer
verified

Exam 13: The Costs of Production.

The typical total-cost curve is U-shaped.

Correct AnswerverifiedShow Answer

The amount of money that a firm pays to buy inputs is called

Correct AnswerverifiedShow Answer

Tom's Tent Company has total fixed costs of $300,000 per year.The firm's average variable cost is $80 for 10,000 tents.At that level of output,the firm's average total costs equal

Correct AnswerverifiedShow Answer

Table 13-12 Betty's Bakery -Refer to Table 13-12.What is the variable cost of producing 5 cakes at Betty's Bakery?

Correct AnswerverifiedShow Answer

The amount by which total cost rises when the firm produces one additional unit of output is called

Correct AnswerverifiedShow Answer

In the long run Firm A incurs total costs of $1,050 when output is 30 units and $1,200 when output is 40 units.Firm A exhibits

Correct AnswerverifiedShow Answer

Economists normally assume that the goal of a firm is to earn (i) profits as large as possible,even if it means reducing output. (ii) profits as large as possible,even if it means incurring a higher total cost. (iii) revenues as large as possible,even if it reduces profits.

Correct AnswerverifiedShow Answer

The amount of money that a wheat farmer could have earned if he had planted barley instead of wheat 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.In the long run,the firm can operate on which of the following average total cost curves?

Correct AnswerverifiedShow Answer

Which of the following is an example of an implicit cost? (i) the owner of a firm forgoing an opportunity to earn a large salary working for a Wall Street brokerage firm (ii) interest paid on the firm's debt (iii) rent paid by the firm to lease office space

Correct AnswerverifiedShow Answer

When the marginal product of an input declines as the quantity of that input increases,the production function exhibits

Correct AnswerverifiedShow Answer

Table 13-8 -Refer to Table 13-8.What is the marginal cost of producing the fifth unit of output?

Correct AnswerverifiedShow Answer

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Diminishing marginal productivity implies decreasing total product.

Correct AnswerverifiedShow Answer

Which of the following would be an example of an implicit cost? (i) forgone investment opportunities (ii) wages of workers (iii) raw materials costs

Correct AnswerverifiedShow Answer

Accountants often ignore implicit costs.

Correct AnswerverifiedShow Answer

Table 13-12 Betty's Bakery -Refer to Table 13-12.What is the marginal cost of the 2nd cake at Betty's Bakery?

Correct AnswerverifiedShow Answer

A firm has a fixed cost of $700 in its first year of operation.When the firm produces 99 units of output,its total costs are $4,000.The marginal cost of producing the 100th unit of output is $200.What is the total cost of producing 100 units?

Correct AnswerverifiedShow Answer

Suppose that a "doggie day care" firm uses only two inputs: hourly workers (labor) and a building (capital) .In the short run,the firm most likely considers

Correct AnswerverifiedShow Answer

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