Question 1

Which of the following expressions is correct?

Accepted Answer

A)  accounting profit = economic profit + implicit costs
B)  accounting profit = total revenue - implicit costs
C)  economic profit = accounting profit + explicit costs
D)  economic profit = total revenue - implicit costs

Question 2

For a firm, the relationship between the quantity of inputs and quantity of output is called the

Accepted Answer

A)  profit function.
B)  production function.
C)  total-cost function.
D)  quantity function.

Question 3

If the marginal cost of producing the tenth unit of output is $2.50, and if the average total cost of producing the tenth unit of output is $3, then at ten units of output, average total cost is rising.

Accepted Answer

A) True 
 B)False

Question 4

Table 13-18 
-Refer to Table 13-18. What is the marginal product of the third worker?

Accepted Answer

450 - 350 ...

Question 5

The economic field of industrial organization examines how firms' decisions about prices and quantities depend on the market conditions they face.

Accepted Answer

A) True 
 B)False

Question 6

Patrice owns a travel agency. Her accountant most likely includes which of the following costs on her financial statements?

Accepted Answer

A)  wages Patrice could earn giving tennis lessons
B)  dividends Patrice's money was earning in the stock market before Patrice sold her stock and leased the space for her travel agency
C)  the cost of utilities for operating the storefront
D)  Both b and c are correct.

Question 7

Figure 13-5 
-Refer to Figure 13-5. Which curve is most likely to represent average total cost?

Accepted Answer

A)  A
B)  B
C)  C
D)  D

Question 8

Suppose that a firm's long-run average total costs of producing custom wooden picnic tables is $300 when it produces 10,000 tables and $325 when it produces 11,000 tables. For this range of output, the firm is experiencing

Accepted Answer

A)  economies of scale.
B)  constant returns to scale.
C)  diseconomies of scale.
D)  specialization.

Question 9

Total revenue minus both explicit and implicit costs is called

Accepted Answer

A)  accounting profit.
B)  economic profit.
C)  average total cost.
D)  total cost.

Question 10

Scenario 13-19
Doreen's Dairy produces and sells Swiss cheese. Last year, it produced 7,000 pounds and sold each pound for $6. In producing the 7,000 pounds, the dairy incurred variable costs of $28,000 and a total cost of $40,000.
-Refer to Scenario 13-19. The firm's fixed cost was

Accepted Answer

A)  $2,000.
B)  $12,000.
C)  $28,000.
D)  $42,000.

Question 11

Scenario 13-15
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 13-15. Joan's production function exhibits

Accepted Answer

A)  increasing marginal product.
B)  decreasing marginal product.
C)  constant marginal product.
D)  Any of the above could be correct.

Question 12

Table 13-7
The Flying Elvis Copter Rides 
-Refer to Table 13-7. What is the value of R?

Accepted Answer

A)  $16.67
B)  $50
C)  $136.67
D)  $360

Question 13

Marginal cost is equal to average total cost when

Accepted Answer

A)  average variable cost is falling.
B)  average fixed cost is rising.
C)  marginal cost is at its minimum.
D)  average total cost is at its minimum.

Question 14

In the long run a company that produces and sells candy bars incurs total costs of $1,200 when output is 2,400 candy bars and $1,400 when output is 2,900 candy bars. The candy bar 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.

Question 15

Table 13-19 
-Refer to Table 13-19. What is the marginal product of the second worker?

Accepted Answer

250 - 100 ...

Question 16

Table 13-12
Eileen's Elegant Earrings produces pairs of earrings for its mail order catalogue business. Each pair is shipped in a separate box. 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 13-12. During the week of July 4th, Eileen doesn't produce any earrings. What are her costs during the week?

Accepted Answer

A)  $0
B)  $150
C)  $275
D)  $425

Question 17

Figure 13-9
The figure below depicts average total cost functions for a firm that produces automobiles. 
-Refer to Figure 13-9. This firm experiences diseconomies of scale at what output levels?

Accepted Answer

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

Question 18

Figure 13-5 
-Refer to Figure 13-5. Curve A is always declining because

Accepted Answer

A)  of diminishing marginal product.
B)  we are dividing fixed costs by higher and higher levels of output.
C)  marginal product first increases, then decreases.
D)  marginal product first decreases, then increases.

Question 19

Economies of scale occur when

Accepted Answer

A)  long-run average total costs rise as output increases.
B)  long-run average total costs fall as output increases.
C)  average fixed costs are falling.
D)  average fixed costs are constant.

Question 20

Figure 13-5 
-Refer to Figure 13-5. Curve D intersects curve C

Accepted Answer

A)  where the firm maximizes profit.
B)  at the minimum of average fixed cost.
C)  at the efficient scale.
D)  where fixed costs equal variable costs.

Exam 13: The Costs of Production

Figure 13-5 -Refer to Figure 13-5. Which curve is most likely to represent average total cost?

Correct Answer
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Correct Answer
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Table 13-18 -Refer to Table 13-18. What is the marginal product of the third worker?

Correct Answer
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450 - 350 ...
View Answer

Marginal cost is equal to average total cost when

Correct Answer
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If the marginal cost of producing the tenth unit of output is $2.50, and if the average total cost of producing the tenth unit of output is $3, then at ten units of output, average total cost is rising.

Correct Answer
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In the long run a company that produces and sells candy bars incurs total costs of $1,200 when output is 2,400 candy bars and $1,400 when output is 2,900 candy bars. The candy bar company exhibits

Correct Answer
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Which of the following expressions is correct?

Correct Answer
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Scenario 13-19 Doreen's Dairy produces and sells Swiss cheese. Last year, it produced 7,000 pounds and sold each pound for $6. In producing the 7,000 pounds, the dairy incurred variable costs of $28,000 and a total cost of $40,000. -Refer to Scenario 13-19. The firm's fixed cost was

Correct Answer
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The economic field of industrial organization examines how firms' decisions about prices and quantities depend on the market conditions they face.

Correct Answer
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Correct Answer
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Total revenue minus both explicit and implicit costs is called

Correct Answer
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Figure 13-5 -Refer to Figure 13-5. Curve A is always declining because

Correct Answer
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Table 13-7 The Flying Elvis Copter Rides -Refer to Table 13-7. What is the value of R?

Correct Answer
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Patrice owns a travel agency. Her accountant most likely includes which of the following costs on her financial statements?

Correct Answer
verified

For a firm, the relationship between the quantity of inputs and quantity of output is called the

Correct Answer
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Economies of scale occur when

Correct Answer
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Table 13-19 -Refer to Table 13-19. What is the marginal product of the second worker?

Correct Answer
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250 - 100 ...
View Answer

Figure 13-5 -Refer to Figure 13-5. Curve D intersects curve C

Correct Answer
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Figure 13-9 The figure below depicts average total cost functions for a firm that produces automobiles. -Refer to Figure 13-9. This firm experiences diseconomies of scale at what output levels?

Correct Answer
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Suppose that a firm's long-run average total costs of producing custom wooden picnic tables is $300 when it produces 10,000 tables and $325 when it produces 11,000 tables. For this range of output, the firm is experiencing

Correct Answer
verified

Exam 13: The Costs of Production

Figure 13-5 -Refer to Figure 13-5. Which curve is most likely to represent average total cost?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 13-18 -Refer to Table 13-18. What is the marginal product of the third worker?

Correct Answerverified450 - 350 ...View AnswerShow Answer

Marginal cost is equal to average total cost when

Correct AnswerverifiedShow Answer

If the marginal cost of producing the tenth unit of output is $2.50, and if the average total cost of producing the tenth unit of output is $3, then at ten units of output, average total cost is rising.

Correct AnswerverifiedShow Answer

In the long run a company that produces and sells candy bars incurs total costs of $1,200 when output is 2,400 candy bars and $1,400 when output is 2,900 candy bars. The candy bar company exhibits

Correct AnswerverifiedShow Answer

Which of the following expressions is correct?

Correct AnswerverifiedShow Answer

Scenario 13-19 Doreen's Dairy produces and sells Swiss cheese. Last year, it produced 7,000 pounds and sold each pound for $6. In producing the 7,000 pounds, the dairy incurred variable costs of $28,000 and a total cost of $40,000. -Refer to Scenario 13-19. The firm's fixed cost was

Correct AnswerverifiedShow Answer

The economic field of industrial organization examines how firms' decisions about prices and quantities depend on the market conditions they face.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Total revenue minus both explicit and implicit costs is called

Correct AnswerverifiedShow Answer

Figure 13-5 -Refer to Figure 13-5. Curve A is always declining because

Correct AnswerverifiedShow Answer

Table 13-7 The Flying Elvis Copter Rides -Refer to Table 13-7. What is the value of R?

Correct AnswerverifiedShow Answer

Patrice owns a travel agency. Her accountant most likely includes which of the following costs on her financial statements?

Correct AnswerverifiedShow Answer

For a firm, the relationship between the quantity of inputs and quantity of output is called the

Correct AnswerverifiedShow Answer

Economies of scale occur when

Correct AnswerverifiedShow Answer

Table 13-19 -Refer to Table 13-19. What is the marginal product of the second worker?

Correct Answerverified250 - 100 ...View AnswerShow Answer

Figure 13-5 -Refer to Figure 13-5. Curve D intersects curve C

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. This firm experiences diseconomies of scale at what output levels?

Correct AnswerverifiedShow Answer

Suppose that a firm's long-run average total costs of producing custom wooden picnic tables is $300 when it produces 10,000 tables and $325 when it produces 11,000 tables. For this range of output, the firm is experiencing

Correct AnswerverifiedShow Answer

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450 - 350 ...
View Answer

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250 - 100 ...
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