Question 1

Average total cost is increasing whenever

Accepted Answer

A)  total cost is increasing.
B)  marginal cost is increasing.
C)  marginal cost is less than average total cost.
D)  marginal cost is greater than average total cost.E) B) and C)
F) All of the above

Question 2

A second or third worker may have a higher marginal product than the first worker in certain circumstances.

Accepted Answer

A) True 
 B)False

Question 3

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 4

As a firm moves along its long-run average cost curve,it is adjusting the size of its factory to the quantity of production.

Accepted Answer

A) True 
 B)False

Question 5

Economies of scale arise when

Accepted Answer

A)  an economy is self-sufficient in production.
B)  individuals in a society are self-sufficient.
C)  fixed costs are large relative to variable costs.
D)  workers are able to specialize in a particular task.E) A) and B)
F) B) and D)

Question 6

Table 13-10
Consider the following table of long-run total cost for four different firms
 
-Refer to Table 13-10.Which firm has economies of scale over the entire range of output?

Accepted Answer

A)  Firm 1
B)  Firm 2
C)  Firm 3
D)  Firm 4E) A) and C)
F) A) and B)

Question 7

Scenario 13-5
A certain firm produces and sells staplers. Last year, it produced 7,000 staplers and sold each stapler for $6. In producing the 7,000 staplers, it incurred variable costs of $28,000 and a total cost of $45,000.
-Refer to Scenario 13-5.In producing the 7,000 staplers,the firm's average variable cost was

Accepted Answer

A)  $2.
B)  $4.
C)  $6.
D)  $8.E) A) and B)
F) B) and D)

Question 8

Marginal cost equals (i) 	change in total cost divided by change in quantity produced.
(ii) 	change in variable cost divided by change in quantity produced.
(iii) 	the average fixed cost of the current unit.

Accepted Answer

A)  (i)  and (ii) 
B)  (ii)  and (iii) 
C)  (i)  only
D)  All of the above are correct.E) A) and B)
F) All of the above

Question 9

Figure 13-3
 
-Refer to Figure 13-3.Which of the following could explain why the total product curve shifted in this diagram?

Accepted Answer

A)  A reduction in capital equipment available to the firm.
B)  Labor skills have become rusty and outdated in the firm.
C)  The firm has developed new technology in its production facility.
D)  The firm is now receiving a higher price for its product.E) C) and D)
F) A) and B)

Question 10

Total cost can be divided into two types of costs.Those two types are

Accepted Answer

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

Question 11

Which of the following is not a property of a firm's cost curves?

Accepted Answer

A)  Marginal cost must eventually rise as a result of diminishing marginal product.
B)  Average total cost is U-shaped.
C)  Economies of scale will exist when average total cost falls as output rises.
D)  Average total cost will cross marginal cost at the minimum of marginal cost.E) None of the above
F) All of the above

Question 12

Assume a certain firm regards the number of workers it employs as variable,and that it regards the size of its factory as fixed.This assumption is often realistic

Accepted Answer

A)  in the short run, but not in the long run.
B)  in the long run, but not in the short run.
C)  both in the short run and in the long run.
D)  neither in the short run nor in the long run.E) A) and B)
F) A) and C)

Question 13

Scenario 13-6
Farmer Jack is a watermelon farmer. If Jack plants no seeds on his farm, he gets no harvest. If he plants 1 bag of seeds, he gets 30 watermelons. If he plants 2 bags of seeds, he gets 50 watermelons. If he plants 3 bags of seeds he gets 60 watermelons. A bag of seeds costs $100, and the costs of seeds are his only costs.
-Refer to Scenario 13-6.Jack's production function will

Accepted Answer

A)  Decrease at a decreasing rate.
B)  Decrease at an increasing rate.
C)  Increase at a decreasing rate.
D)  Increase at an increasing rate.E) B) and C)
F) All of the above

Question 14

If a firm produces nothing,which of the following costs will be zero?

Accepted Answer

A)  total cost
B)  fixed cost
C)  opportunity cost
D)  variable costE) C) and D)
F) B) and D)

Question 15

The production function depicts a relationship between which two variables? Also,draw a production function that exhibits diminishing marginal product.

Accepted Answer

It depicts a relationship betw...

Question 16

Marginal cost increases as the quantity of output increases.This reflects the property of

Accepted Answer

A)  increasing total cost.
B)  diminishing total cost.
C)  increasing marginal product.
D)  diminishing marginal product.E) None of the above
F) All of the above

Question 17

Which of the following statements about costs is correct?

Accepted Answer

A)  When marginal cost is less than average total cost, average total cost is rising.
B)  The total cost curve is U-shaped.
C)  As the quantity of output increases, marginal cost eventually rises.
D)  All of the above are correct.E) B) and C)
F) None of the above

Question 18

If the marginal cost curve is rising,then so is the average total cost curve.

Accepted Answer

A) True 
 B)False

Question 19

Which of these assumptions is often realistic for a firm in the short run?

Accepted Answer

A)  The firm can vary both the size of its factory and the number of workers it employs.
B)  The firm can vary the size of its factory, but not the number of workers it employs.
C)  The firm can vary the number of workers it employs, but not the size of its factory.
D)  The firm can vary neither the size of its factory nor the number of workers it employs.E) None of the above
F) C) and D)

Question 20

Table 13-7
Teacher's Helper is a small company that has a subcontract to produce instructional materials for disabled children in public school districts. The owner rents several small rooms in an office building in the suburbs for $600 a month and has leased computer equipment that costs $480 a month.
 
-Refer to Table 13-7.What is the average variable cost for the month if six instructional modules are produced?

Accepted Answer

A)  $180.00
B)  $533.33
C)  $700.00
D)  $713.33E) B) and C)
F) A) and D)

Exam 13: The Costs of Production

The production function depicts a relationship between which two variables? Also,draw a production function that exhibits diminishing marginal product.

Correct Answer
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It depicts a relationship betw...
View 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 Answer
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Which of these assumptions is often realistic for a firm in the short run?

Correct Answer
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If a firm produces nothing,which of the following costs will be zero?

Correct Answer
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Which of the following is not a property of a firm's cost curves?

Correct Answer
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Correct Answer
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If the marginal cost curve is rising,then so is the average total cost curve.

Correct Answer
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Average total cost is increasing whenever

Correct Answer
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Total cost can be divided into two types of costs.Those two types are

Correct Answer
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Assume a certain firm regards the number of workers it employs as variable,and that it regards the size of its factory as fixed.This assumption is often realistic

Correct Answer
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Table 13-10 Consider the following table of long-run total cost for four different firms -Refer to Table 13-10.Which firm has economies of scale over the entire range of output?

Correct Answer
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Correct Answer
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Correct Answer
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A second or third worker may have a higher marginal product than the first worker in certain circumstances.

Correct Answer
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Which of the following statements about costs is correct?

Correct Answer
verified

As a firm moves along its long-run average cost curve,it is adjusting the size of its factory to the quantity of production.

Correct Answer
verified

Marginal cost equals (i) change in total cost divided by change in quantity produced. (ii) change in variable cost divided by change in quantity produced. (iii) the average fixed cost of the current unit.

Correct Answer
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Economies of scale arise when

Correct Answer
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Marginal cost increases as the quantity of output increases.This reflects the property of

Correct Answer
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Figure 13-3 -Refer to Figure 13-3.Which of the following could explain why the total product curve shifted in this diagram?

Correct Answer
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Exam 13: The Costs of Production

The production function depicts a relationship between which two variables? Also,draw a production function that exhibits diminishing marginal product.

Correct AnswerverifiedIt depicts a relationship betw...View AnswerShow 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

Which of these assumptions is often realistic for a firm in the short run?

Correct AnswerverifiedShow Answer

If a firm produces nothing,which of the following costs will be zero?

Correct AnswerverifiedShow Answer

Which of the following is not a property of a firm's cost curves?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If the marginal cost curve is rising,then so is the average total cost curve.

Correct AnswerverifiedShow Answer

Average total cost is increasing whenever

Correct AnswerverifiedShow Answer

Total cost can be divided into two types of costs.Those two types are

Correct AnswerverifiedShow Answer

Assume a certain firm regards the number of workers it employs as variable,and that it regards the size of its factory as fixed.This assumption is often realistic

Correct AnswerverifiedShow Answer

Table 13-10 Consider the following table of long-run total cost for four different firms -Refer to Table 13-10.Which firm has economies of scale over the entire range of output?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A second or third worker may have a higher marginal product than the first worker in certain circumstances.

Correct AnswerverifiedShow Answer

Which of the following statements about costs is correct?

Correct AnswerverifiedShow Answer

As a firm moves along its long-run average cost curve,it is adjusting the size of its factory to the quantity of production.

Correct AnswerverifiedShow Answer

Marginal cost equals (i) change in total cost divided by change in quantity produced. (ii) change in variable cost divided by change in quantity produced. (iii) the average fixed cost of the current unit.

Correct AnswerverifiedShow Answer

Economies of scale arise when

Correct AnswerverifiedShow Answer

Marginal cost increases as the quantity of output increases.This reflects the property of

Correct AnswerverifiedShow Answer

Figure 13-3 -Refer to Figure 13-3.Which of the following could explain why the total product curve shifted in this diagram?

Correct AnswerverifiedShow Answer

Correct Answer
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It depicts a relationship betw...
View Answer

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