Question 1

Consider the following information about bread production at Beth's Bakery: 
Beth pays all her workers the same wage and labor is her only variable cost.From this information we can conclude that Beth's marginal cost

Accepted Answer

A)  declines as output increases from 0 to 33, but increases after that.
B)  declines as output increases from 0 to 11, but increases after that.
C)  increases as output increases from 0 to 11, but declines after that.
D)  is constant.E) All of the above
F) A) and D)

Question 2

In setting the production level,a firm's cost curves

Accepted Answer

A)  by themselves do not tell us what decisions the firm will make.
B)  dictate what decisions the firm will make.
C)  have no bearing on what decisions the firm will make.
D)  None of the above is correct.E) B) and D)
F) All of the above

Question 3

Which of the following can be added to profit to obtain total revenue?

Accepted Answer

A)  net profit
B)  capital profit
C)  operational profit
D)  total costE) A) and B)
F) C) and D)

Question 4

Economic profit

Accepted Answer

A)  will never exceed accounting profit.
B)  is most often equal to accounting profit.
C)  is always at least as large as accounting profit.
D)  is a less complete measure of profitability than accounting profit.E) All of the above
F) B) and C)

Question 5

Which of the following expressions is correct?

Accepted Answer

A)  accounting profit = total revenue - explicit costs
B)  economic profit = total revenue - implicit costs
C)  economic profit = total revenue - explicit costs
D)  Both a and b are correct.E) C) and D)
F) B) and D)

Question 6

A key difference between accountants and economists is their different treatment of the cost of capital.Does this cause an accountant's estimate of total costs to be higher or lower than an economist's estimate? Explain.

Accepted Answer

An accountant would not include the forg...

Question 7

Scenario 13-4
Suppose that a given firm experiences decreasing marginal product of labor with the addition of each worker regardless of the current output level.
-Refer to Scenario 13-4.Average variable cost will be

Accepted Answer

A)  rising at all points.
B)  falling at all points.
C)  U-shaped.
D)  constant.E) B) and D)
F) All of the above

Question 8

Profit is defined as

Accepted Answer

A)  net revenue minus depreciation.
B)  total revenue minus total cost.
C)  average revenue minus average total cost.
D)  marginal revenue minus marginal cost.E) C) and D)
F) All of the above

Question 9

Fixed costs are those costs that remain fixed no matter how long the time horizon is.

Accepted Answer

A) True 
 B)False

Question 10

Table 13-8
 
-Refer to Table 13-8.What is the average variable cost of producing 6 gigaplots at Jimmy's Gigaplot factory?

Accepted Answer

A)  $16
B)  $17
C)  $18
D)  $19E) B) and C)
F) A) and D)

Question 11

Assume Jack received all A's in his classes last semester.If Jack gets all B's in his classes this semester,his GPA may or may not fall.

Accepted Answer

A) True 
 B)False

Question 12

Table 13-5
 
-Refer to Table 13-5.The average total cost of producing one widget is

Accepted Answer

A)  $1.00.
B)  $10.00.
C)  $11.00.
D)  $22.00.E) A) and B)
F) None of the above

Question 13

Given the cost curves shown in the diagram below,the efficient scale of production occurs at point

Accepted Answer

A)  a.
B)  B.
C)  C.
D)  D.E) A) and C)
F) A) and B)

Question 14

Figure 13-8
The figure below depicts average total cost functions for a firm that produces automobiles.
 
-Refer to Figure 13-8.Which of the curves is most likely to characterize the short-run average total cost curve of the smallest factory?

Accepted Answer

A)  ATCA
B)  ATCB
C)  ATCC
D)  ATCDE) A) and B)
F) A) and C)

Question 15

Kevin quit his $65,000 a year corporate lawyer job to open up his own law practice.In Kevin's first year in business his total revenue equaled $150,000.Kevin's explicit cost during the year totaled $85,000.Using the information from Kevin's first year in business,what is his economic profit?

Accepted Answer

A)  $0
B)  $20,000
C)  $65,000
D)  $85,000E) A) and C)
F) A) and D)

Question 16

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

Question 17

Table 13-10
Consider the following table of long-run total cost for four different firms
 
-Refer to Table 13-10.Firm 1's efficient scale occurs at what quantity?

Accepted Answer

A)  2
B)  3
C)  4
D)  5E) All of the above
F) A) and B)

Question 18

The marginal product of an input in the production process is the increase in

Accepted Answer

A)  total revenue obtained from an additional unit of that input.
B)  profit obtained from an additional unit of that input.
C)  total revenue obtained from an additional unit of that input
D)  quantity of output obtained from an additional unit of that input.E) B) and D)
F) A) and B)

Question 19

Figure 13-9
 
-Refer to Figure 13-9.The three average total cost curves on the diagram correspond to three different

Accepted Answer

A)  time horizons.
B)  products.
C)  firms.
D)  factory sizes.E) B) and D)
F) C) and D)

Question 20

Table 13-6
Adrian's Premium Chocolates produces boxes of chocolates for its mail order catalogue business. She rents a small room for $150 a week in the downtown business district that serves as her factory. She can hire workers for $275 a week. There are no implicit costs.
 
-Refer to Table 13-6.One week,Adrian earns a profit of $125.If her revenue for the week is $1100,how many boxes of chocolate did she produce?

Accepted Answer

A)  140
B)  330
C)  780
D)  950E) C) and D)
F) B) and C)

Exam 13: The Costs of Production

Fixed costs are those costs that remain fixed no matter how long the time horizon is.

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.Firm 1's efficient scale occurs at what quantity?

Correct Answer
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Table 13-5 -Refer to Table 13-5.The average total cost of producing one widget is

Correct Answer
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Consider the following information about bread production at Beth's Bakery: Beth pays all her workers the same wage and labor is her only variable cost.From this information we can conclude that Beth's marginal cost

Correct Answer
verified

A key difference between accountants and economists is their different treatment of the cost of capital.Does this cause an accountant's estimate of total costs to be higher or lower than an economist's estimate? Explain.

Correct Answer
verified
An accountant would not include the forg...
View Answer

Assume Jack received all A's in his classes last semester.If Jack gets all B's in his classes this semester,his GPA may or may not fall.

Correct Answer
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Given the cost curves shown in the diagram below,the efficient scale of production occurs at point

Correct Answer
verified

In setting the production level,a firm's cost curves

Correct Answer
verified

Table 13-8 -Refer to Table 13-8.What is the average variable cost of producing 6 gigaplots at Jimmy's Gigaplot factory?

Correct Answer
verified

Figure 13-9 -Refer to Figure 13-9.The three average total cost curves on the diagram correspond to three different

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

Correct Answer
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The marginal product of an input in the production process is the increase in

Correct Answer
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Which of the following can be added to profit to obtain total revenue?

Correct Answer
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Figure 13-8 The figure below depicts average total cost functions for a firm that produces automobiles. -Refer to Figure 13-8.Which of the curves is most likely to characterize the short-run average total cost curve of the smallest factory?

Correct Answer
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Kevin quit his $65,000 a year corporate lawyer job to open up his own law practice.In Kevin's first year in business his total revenue equaled $150,000.Kevin's explicit cost during the year totaled $85,000.Using the information from Kevin's first year in business,what is his economic profit?

Correct Answer
verified

Which of the following expressions is correct?

Correct Answer
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Economic profit

Correct Answer
verified

Correct Answer
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Profit is defined as

Correct Answer
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Scenario 13-4 Suppose that a given firm experiences decreasing marginal product of labor with the addition of each worker regardless of the current output level. -Refer to Scenario 13-4.Average variable cost will be

Correct Answer
verified

Exam 13: The Costs of Production

Fixed costs are those costs that remain fixed no matter how long the time horizon is.

Correct AnswerverifiedShow Answer

Table 13-10 Consider the following table of long-run total cost for four different firms -Refer to Table 13-10.Firm 1's efficient scale occurs at what quantity?

Correct AnswerverifiedShow Answer

Table 13-5 -Refer to Table 13-5.The average total cost of producing one widget is

Correct AnswerverifiedShow Answer

Consider the following information about bread production at Beth's Bakery: Beth pays all her workers the same wage and labor is her only variable cost.From this information we can conclude that Beth's marginal cost

Correct AnswerverifiedShow Answer

A key difference between accountants and economists is their different treatment of the cost of capital.Does this cause an accountant's estimate of total costs to be higher or lower than an economist's estimate? Explain.

Correct AnswerverifiedAn accountant would not include the forg...View AnswerShow Answer

Assume Jack received all A's in his classes last semester.If Jack gets all B's in his classes this semester,his GPA may or may not fall.

Correct AnswerverifiedShow Answer

Given the cost curves shown in the diagram below,the efficient scale of production occurs at point

Correct AnswerverifiedShow Answer

In setting the production level,a firm's cost curves

Correct AnswerverifiedShow Answer

Table 13-8 -Refer to Table 13-8.What is the average variable cost of producing 6 gigaplots at Jimmy's Gigaplot factory?

Correct AnswerverifiedShow Answer

Figure 13-9 -Refer to Figure 13-9.The three average total cost curves on the diagram correspond to three different

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The marginal product of an input in the production process is the increase in

Correct AnswerverifiedShow Answer

Which of the following can be added to profit to obtain total revenue?

Correct AnswerverifiedShow Answer

Figure 13-8 The figure below depicts average total cost functions for a firm that produces automobiles. -Refer to Figure 13-8.Which of the curves is most likely to characterize the short-run average total cost curve of the smallest factory?

Correct AnswerverifiedShow Answer

Kevin quit his $65,000 a year corporate lawyer job to open up his own law practice.In Kevin's first year in business his total revenue equaled $150,000.Kevin's explicit cost during the year totaled $85,000.Using the information from Kevin's first year in business,what is his economic profit?

Correct AnswerverifiedShow Answer

Which of the following expressions is correct?

Correct AnswerverifiedShow Answer

Economic profit

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Profit is defined as

Correct AnswerverifiedShow Answer

Scenario 13-4 Suppose that a given firm experiences decreasing marginal product of labor with the addition of each worker regardless of the current output level. -Refer to Scenario 13-4.Average variable cost will be

Correct AnswerverifiedShow Answer

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An accountant would not include the forg...
View Answer

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