Question 1

What does total revenue equal

Accepted Answer

A)  Total output x Price per unit of output
B)  (Total output x Sales price)  - Inventory shortage
C)  (Total output x Sales price)  - Inventory surplus
D)  Total profit - Total cost

Question 2

Figure 13-2
The figure depicts a total cost function for a firm that produces cookies.
 
-Refer to Figure 13-2.What is the relationship between input and output of a production function

Accepted Answer

A)  Output increases at a decreasing rate with additional units of input.
B)  Output increases at an increasing rate with additional units of input.
C)  Output decreases at a decreasing rate with additional units of input.
D)  Output decreases at an increasing rate with additional units of input.

Question 3

Scenario 13-5
A stationery firm produces and sells staplers.Last year, it produced 5000 staplers and sold each stapler for $10.In producing the 5000 staplers, it incurred variable costs of $25,000 and a total cost of $45,000.
-Refer to Scenario 13-5.In producing the 5000 staplers,what was the firm's average total cost

Accepted Answer

A)  $6
B)  $7
C)  $8
D)  $9

Question 4

Harry's Hotdogs is a small street vendor business owned by Harry Huggins.Harry is trying to get a better understanding of his costs by categorizing them as fixed or variable.Which of the following costs are most likely to be considered fixed costs

Accepted Answer

A)  the cost of mustard
B)  the cost of hotdog buns
C)  the cost of wages paid to workers that sell hotdogs
D)  the cost of his vending permit

Question 5

John owns a shoe-shine business.Which cost does his accountant most likely include on his financial statements

Accepted Answer

A)  wages John could earn washing windows
B)  dividends John's money was earning in the stock market before John sold his shares and bought a shoe-shine booth
C)  the cost of shoe polish
D)  wages John could have earned for unclaimed overtime labour hours

Question 6

The economic student association at the University X is hiring students to make banners "I love economics" for the coming conference.Complete the following table and plot the production function and the cost function for producing banners.

Accepted Answer

The answer of The economic student association at the University...

Question 7

What is the length of the short run

Accepted Answer

A)  always less than 6 months
B)  not more than 1 year
C)  at least 3 years
D)  different for different types of firms

Question 8

What does a total-cost curve show

Accepted Answer

A)  the relationship between the quantity of an input used and the total cost of production
B)  the relationship between the quantity of output produced and the total cost of production
C)  the relationship between the total cost of production and profit
D)  the relationship between the total cost of production and total revenue

Question 9

Which of the following does NOT calculate accounting profit or economic profit properly

Accepted Answer

A)  Accounting profit = Total revenue - Explicit costs
B)  Economic profit = Total revenue - Total opportunity costs
C)  Economic profit = Total revenue - Explicit costs - Implicit costs
D)  Accounting profit = Total revenue - Implicit costs

Question 10

What does average total cost tell us

Accepted Answer

A)  the total cost of the first unit of output, if total cost is divided evenly over all the units produced
B)  the cost of a typical unit of output, if total cost is divided evenly over all the units produced
C)  the cost of the last unit of output, if total cost does not include a fixed cost component
D)  the variable cost of a firm that is producing at least one unit of output

Question 11

Accountants often ignore implicit costs.

Accepted Answer

A) True 
 B)False

Question 12

Figure 13-4
The curves in this figure reflect information about the average total cost, average fixed cost, average variable cost, and marginal cost for a firm.
 
-Refer to Figure 13-4.Why is curve A U-shaped

Accepted Answer

A)  because of diminishing marginal product
B)  because of increasing marginal product
C)  because of the fact that increasing marginal product follows decreasing marginal product
D)  because of the fact that decreasing marginal product follows increasing marginal product

Question 13

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 forgone ...

Question 14

Assume a certain firm regards the number of workers it employs as variable.When is this variable assumption often realistic

Accepted Answer

A)  If the size of its factory is fixed, then it refers to the short run.
B)  If the size of its factory is fixed, then it refers to the long run.
C)  If the size of its factory is not fixed, then it refers to the short run.
D)  If the size of its factory is not fixed, then it refers to the short run and the long run.

Question 15

Table 13-3 
-Refer to Table 13-3.One month,Teacher's Helper produced 20 instructional modules.What was the average fixed cost for that month

Accepted Answer

A)  54
B)  108
C)  540
D)  1080

Question 16

Table 13-1
 
-Refer to Table 13-1.What is the variable cost of producing five widgets

Accepted Answer

A)  $13.00
B)  $14.00
C)  $15.00
D)  $16.00

Question 17

What is happening when marginal cost is less than average total cost

Accepted Answer

A)  Marginal cost must be falling.
B)  Average variable cost must be falling.
C)  Average total cost must be falling.
D)  Marginal cost must be rising.

Question 18

The use of specialization to achieve economies of scale is one reason modern societies are as prosperous as they are.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following measures of cost is best described as "the increase in total cost that arises from an extra unit of production"

Accepted Answer

A)  variable cost
B)  average variable cost
C)  average total cost
D)  marginal cost

Question 20

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

Accepted Answer

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

Exam 13: The Costs of Production

What is the length of the short run

Correct Answer
verified

John owns a shoe-shine business.Which cost does his accountant most likely include on his financial statements

Correct Answer
verified

What does total revenue equal

Correct Answer
verified

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

Correct Answer
verified

Harry's Hotdogs is a small street vendor business owned by Harry Huggins.Harry is trying to get a better understanding of his costs by categorizing them as fixed or variable.Which of the following costs are most likely to be considered fixed costs

Correct Answer
verified

What does a total-cost curve show

Correct Answer
verified

Figure 13-4 The curves in this figure reflect information about the average total cost, average fixed cost, average variable cost, and marginal cost for a firm. -Refer to Figure 13-4.Why is curve A U-shaped

Correct Answer
verified

Table 13-3 -Refer to Table 13-3.One month,Teacher's Helper produced 20 instructional modules.What was the average fixed cost for that month

Correct Answer
verified

What is happening when marginal cost is less than average total cost

Correct Answer
verified

What does average total cost tell us

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 forgone ...
View Answer

The economic student association at the University X is hiring students to make banners "I love economics" for the coming conference.Complete the following table and plot the production function and the cost function for producing banners.

Correct Answer
verified

Figure 13-2 The figure depicts a total cost function for a firm that produces cookies. -Refer to Figure 13-2.What is the relationship between input and output of a production function

Correct Answer
verified

Which of the following does NOT calculate accounting profit or economic profit properly

Correct Answer
verified

The use of specialization to achieve economies of scale is one reason modern societies are as prosperous as they are.

Correct Answer
verified

Table 13-1 -Refer to Table 13-1.What is the variable cost of producing five widgets

Correct Answer
verified

Correct Answer
verified

Which of the following measures of cost is best described as "the increase in total cost that arises from an extra unit of production"

Correct Answer
verified

Assume a certain firm regards the number of workers it employs as variable.When is this variable assumption often realistic

Correct Answer
verified

Accountants often ignore implicit costs.

Correct Answer
verified

Exam 13: The Costs of Production

What is the length of the short run

Correct AnswerverifiedShow Answer

John owns a shoe-shine business.Which cost does his accountant most likely include on his financial statements

Correct AnswerverifiedShow Answer

What does total revenue equal

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Harry's Hotdogs is a small street vendor business owned by Harry Huggins.Harry is trying to get a better understanding of his costs by categorizing them as fixed or variable.Which of the following costs are most likely to be considered fixed costs

Correct AnswerverifiedShow Answer

What does a total-cost curve show

Correct AnswerverifiedShow Answer

Figure 13-4 The curves in this figure reflect information about the average total cost, average fixed cost, average variable cost, and marginal cost for a firm. -Refer to Figure 13-4.Why is curve A U-shaped

Correct AnswerverifiedShow Answer

Table 13-3 -Refer to Table 13-3.One month,Teacher's Helper produced 20 instructional modules.What was the average fixed cost for that month

Correct AnswerverifiedShow Answer

What is happening when marginal cost is less than average total cost

Correct AnswerverifiedShow Answer

What does average total cost tell us

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 forgone ...View AnswerShow Answer

The economic student association at the University X is hiring students to make banners "I love economics" for the coming conference.Complete the following table and plot the production function and the cost function for producing banners.

Correct AnswerverifiedShow Answer

Figure 13-2 The figure depicts a total cost function for a firm that produces cookies. -Refer to Figure 13-2.What is the relationship between input and output of a production function

Correct AnswerverifiedShow Answer

Which of the following does NOT calculate accounting profit or economic profit properly

Correct AnswerverifiedShow Answer

The use of specialization to achieve economies of scale is one reason modern societies are as prosperous as they are.

Correct AnswerverifiedShow Answer

Table 13-1 -Refer to Table 13-1.What is the variable cost of producing five widgets

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following measures of cost is best described as "the increase in total cost that arises from an extra unit of production"

Correct AnswerverifiedShow Answer

Assume a certain firm regards the number of workers it employs as variable.When is this variable assumption often realistic

Correct AnswerverifiedShow Answer

Accountants often ignore implicit costs.

Correct AnswerverifiedShow Answer

Correct Answer
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An accountant would not include forgone ...
View Answer

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