Question 1

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.

Question 2

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

Accepted Answer

A)   Firm 1
B)   Firm 2
C)   Firm 3
D)   Firm 4

Question 3

Table 13-10
Jimmy's Gigaplots Factory
 
-Refer to Table 13-10.What is the total cost of producing 7 gigaplots at Jimmy's Gigaplot factory?

Accepted Answer

A)   $140
B)   $150
C)   $153
D)   $158

Question 4

Figure 13-3 
-Refer to Figure 13-3.The graph illustrates a typical total cost curve.Based on its shape,what does the corresponding production function look like?

Accepted Answer

A)   an upward-sloping curve that increases at an increasing rate
B)   an upward-sloping curve that increases at a decreasing rate
C)   a downward-sloping curve
D)   a horizontal straight line

Question 5

Diminishing marginal product suggests that

Accepted Answer

A)   additional units of output become less costly as more output is produced.
B)   marginal cost is upward sloping.
C)   the firm is at full capacity.
D)   adding additional workers will lower total cost.

Question 6

Constant returns to scale occur when a firm's

Accepted Answer

A)   marginal costs are constant as output increases.
B)   long-run average total costs are decreasing as output increases.
C)   long-run average total costs are increasing as output increases.
D)   long-run average total costs do not vary as output increases.

Question 7

Which of the following statements about a production function is correct for a firm that uses labor to produce output?

Accepted Answer

A)   The production function depicts the relationship between the quantity of labor and the quantity of output.
B)   The slope of the production function measures marginal product.
C)   The slopes of the production function and the total cost curve are inversely related;if one is increasing,the other is decreasing.
D)   All of the above are correct.

Question 8

Table 13-10
Jimmy's Gigaplots Factory
 
-Refer to Table 13-10.What is the marginal cost of the 4th gigaplot at Jimmy's Gigaplot factory?

Accepted Answer

A)   $13
B)   $15
C)   $19
D)   $64

Question 9

Table 13-4
Gallo Cork Factory
 
-Refer to Table 13-4.Assume Gallo's currently employs 5 workers.What is the marginal product of labor when Gallo's adds a 6th worker?

Accepted Answer

A)   5 corks per hour
B)   15 corks per hour
C)   25 corks per hour
D)   70 corks per hour

Question 10

One of the most important properties of cost curves is that

Accepted Answer

A)   for most producers,the average total cost curve never crosses the marginal cost curve.
B)   the average fixed cost curve must eventually rise.
C)   the average total cost curve first rises,then falls with increased output.
D)   the marginal cost curve eventually rises with the quantity of output.

Question 11

A firm's opportunity costs of production are equal to its

Accepted Answer

A)   explicit costs only.
B)   implicit costs only.
C)   explicit costs + implicit costs.
D)   explicit costs + implicit costs + total revenue.

Question 12

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 13

The total cost to the firm of producing zero units of output is

Accepted Answer

A)   zero in both the short run and the long run.
B)   its fixed cost in the short run and zero in the long run.
C)   its fixed cost in both the short run and the long run.
D)   its variable cost in both the short run and the long run.

Question 14

When a firm is experiencing diseconomies of scale,

Accepted Answer

A)   long-run average total cost is minimized.
B)   long-run average total cost is greater than long-run marginal cost.
C)   long-run average total cost is less than long-run marginal cost.
D)   long-run marginal cost is minimized.

Question 15

Scenario 13-5
Samantha has been working for a law firm and earning an annual salary of $80,000.She decides to open her own practice.Her annual expenses will include $15,000 for office rent,$3,000 for equipment rental,$1,000 for supplies,$1,200 for utilities,and a $35,000 salary for a secretary/bookkeeper.Samantha will cover her start-up expenses by cashing in a $20,000 certificate of deposit on which she was earning annual interest of $500.
-Refer to Scenario 13-5.According to an economist,which of the following revenue totals will yield her business $50,000 in economic profits?

Accepted Answer

A)   $55,200.
B)   $100,200.
C)   $132,500.
D)   $185,700.

Question 16

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.

Question 17

Although economists and accountants treat many costs differently,they both treat the cost of capital the same.

Accepted Answer

A) True 
 B)False

Question 18

Table 13-7
 
-Refer to Table 13-7.What is the variable cost of producing zero widgets?

Accepted Answer

A)   $0.00
B)   $1.00.
C)   $10.00.
D)   $10.00

Question 19

Figure 13-4 
-Refer to Figure 13-4.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.

Question 20

Which field of economics studies how the number of firms affects the prices in a market and the efficiency of market outcomes?

Accepted Answer

A)   macro economics
B)   industrial organization
C)   labor economics
D)   monetary economics

Exam 13: The Costs of Production

Although economists and accountants treat many costs differently,they both treat the cost of capital the same.

Correct Answer
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When a firm is experiencing diseconomies of scale,

Correct Answer
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Figure 13-4 -Refer to Figure 13-4.Curve D intersects curve C

Correct Answer
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Table 13-7 -Refer to Table 13-7.What is the variable cost of producing zero widgets?

Correct Answer
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The total cost to the firm of producing zero units of output is

Correct Answer
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Constant returns to scale occur when a firm's

Correct Answer
verified

Figure 13-3 -Refer to Figure 13-3.The graph illustrates a typical total cost curve.Based on its shape,what does the corresponding production function look like?

Correct Answer
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Which field of economics studies how the number of firms affects the prices in a market and the efficiency of market outcomes?

Correct Answer
verified

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

Correct Answer
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Correct Answer
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Table 13-4 Gallo Cork Factory -Refer to Table 13-4.Assume Gallo's currently employs 5 workers.What is the marginal product of labor when Gallo's adds a 6th worker?

Correct Answer
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Table 13-10 Jimmy's Gigaplots Factory -Refer to Table 13-10.What is the marginal cost of the 4th gigaplot at Jimmy's Gigaplot factory?

Correct Answer
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Table 13-10 Jimmy's Gigaplots Factory -Refer to Table 13-10.What is the total cost of producing 7 gigaplots at Jimmy's Gigaplot factory?

Correct Answer
verified

One of the most important properties of cost curves is that

Correct Answer
verified

A firm's opportunity costs of production are equal to its

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

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

Correct Answer
verified

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

Correct Answer
verified

Diminishing marginal product suggests that

Correct Answer
verified

Which of the following statements about a production function is correct for a firm that uses labor to produce output?

Correct Answer
verified

Exam 13: The Costs of Production

Although economists and accountants treat many costs differently,they both treat the cost of capital the same.

Correct AnswerverifiedShow Answer

When a firm is experiencing diseconomies of scale,

Correct AnswerverifiedShow Answer

Figure 13-4 -Refer to Figure 13-4.Curve D intersects curve C

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Table 13-7 -Refer to Table 13-7.What is the variable cost of producing zero widgets?

Correct AnswerverifiedShow Answer

The total cost to the firm of producing zero units of output is

Correct AnswerverifiedShow Answer

Constant returns to scale occur when a firm's

Correct AnswerverifiedShow Answer

Figure 13-3 -Refer to Figure 13-3.The graph illustrates a typical total cost curve.Based on its shape,what does the corresponding production function look like?

Correct AnswerverifiedShow Answer

Which field of economics studies how the number of firms affects the prices in a market and the efficiency of market outcomes?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 13-4 Gallo Cork Factory -Refer to Table 13-4.Assume Gallo's currently employs 5 workers.What is the marginal product of labor when Gallo's adds a 6th worker?

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Table 13-10 Jimmy's Gigaplots Factory -Refer to Table 13-10.What is the marginal cost of the 4th gigaplot at Jimmy's Gigaplot factory?

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Table 13-10 Jimmy's Gigaplots Factory -Refer to Table 13-10.What is the total cost of producing 7 gigaplots at Jimmy's Gigaplot factory?

Correct AnswerverifiedShow Answer

One of the most important properties of cost curves is that

Correct AnswerverifiedShow Answer

A firm's opportunity costs of production are equal to its

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

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Diminishing marginal product suggests that

Correct AnswerverifiedShow Answer

Which of the following statements about a production function is correct for a firm that uses labor to produce output?

Correct AnswerverifiedShow Answer

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