Question 1

There is general agreement among economists that the long-run time period exceeds one year.

Accepted Answer

A) True 
 B)False

Question 2

A student might describe information about the costs of production as

Accepted Answer

A)   dry and technical.
B)   boring.
C)   crucial to understanding firms and market structures.
D)   All of the above could be correct.

Question 3

Scenario 13-22
Suppose that a small hair styling salon had revenues of $150,000 in a given year. The owner spent $10,000 on utilities, $60,000 on supplies (shampoo, conditioner, hair coloring and other chemicals, etc.), and $50,000 on equipment (mirrors, chairs, scissors, curling irons, etc.), including maintenance. The owner could have earned $50,000 working at another salon.
-Refer to Scenario 13-22. What is the accounting profit for the hair styling salon?

Accepted Answer

Accounting profit = Total reve...

Question 4

Several related measures of cost can be derived from a firm's total cost.

Accepted Answer

A) True 
 B)False

Question 5

Scenario 13-4
Suppose that Abdul opens a coffee shop. He receives a loan from a bank for $100,000. He withdraws $50,000 from his personal savings account. The interest rate on the loan is 8%, and the interest rate on his savings account is 2%.
-Refer to Scenario 13-4. Abdul's explicit cost of capital is

Accepted Answer

A)   $8,000.
B)   $4,000.
C)   $2,000.
D)   $1,000.

Question 6

Table 13-17
Consider the following table of long-run total cost for four different firms:
 
-Refer to Table 13-17. Which firm's long-run marginal cost decreases as output increases?

Accepted Answer

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

Question 7

Variable costs equal fixed costs when nothing is produced.

Accepted Answer

A) True 
 B)False

Question 8

David's firm experiences diminishing marginal product for all ranges of inputs. The total cost curve associated with David's firm

Accepted Answer

A)   gets flatter as output increases.
B)   gets steeper as output increases.
C)   is constant for all ranges of output.
D)   is unrelated to the production function.

Question 9

Accounting profit is greater than or equal to economic profit.

Accepted Answer

A) True 
 B)False

Question 10

In the long run,

Accepted Answer

A)   inputs that were fixed in the short run remain fixed.
B)   inputs that were fixed in the short run become variable.
C)   inputs that were variable in the short run become fixed.
D)   variable inputs are rarely used.

Question 11

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 12

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 cost

Question 13

Table 13-19
 
-Refer to Table 13-19. What is the shape of the average-fixed-cost curve?

Accepted Answer

AFC is always declining as out...

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

Diseconomies of scale occur when

Accepted Answer

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

Question 16

Describe the difference between the short run and the long run.

Accepted Answer

In the short run, the firm con...

Question 17

Table 13-3
 
-Refer to Table 13-3. If the firm can sell its output for $1 per unit, what is the profit-maximizing level of output?

Accepted Answer

A)   240 units
B)   230 units
C)   190 units
D)   170 units

Question 18

Total revenue equals

Accepted Answer

A)   price x quantity.
B)   price/quantity.
C)   (price x quantity)  - total cost.
D)   output - input.

Question 19

Table 13-4
Charles's Math Tutoring
 
-Refer to Table 13-4. Suppose that Charles's math tutoring company has a fixed cost of $50 per month for his cell phone. Each worker costs Charles $60 per day. As output increases from 0 to 45 students, Charles's total cost curve

Accepted Answer

A)   increases but gets flatter.
B)   increases and gets steeper.
C)   decreases and gets flatter.
D)   decreases but gets steeper.

Question 20

A production function describes

Accepted Answer

A)   how a firm maximizes profits.
B)   how a firm turns inputs into output.
C)   the minimal cost of producing a given level of output.
D)   the relationship between cost and output.

Exam 13: The Costs of Production

Several related measures of cost can be derived from a firm's total cost.

Correct Answer
verified

Table 13-3 -Refer to Table 13-3. If the firm can sell its output for $1 per unit, what is the profit-maximizing level of output?

Correct Answer
verified

A student might describe information about the costs of production as

Correct Answer
verified

Correct Answer
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Accounting profit is greater than or equal to economic profit.

Correct Answer
verified

Total revenue equals

Correct Answer
verified

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

Correct Answer
verified

David's firm experiences diminishing marginal product for all ranges of inputs. The total cost curve associated with David's firm

Correct Answer
verified

Table 13-17 Consider the following table of long-run total cost for four different firms: -Refer to Table 13-17. Which firm's long-run marginal cost decreases as output increases?

Correct Answer
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In the long run,

Correct Answer
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Table 13-4 Charles's Math Tutoring -Refer to Table 13-4. Suppose that Charles's math tutoring company has a fixed cost of $50 per month for his cell phone. Each worker costs Charles $60 per day. As output increases from 0 to 45 students, Charles's total cost curve

Correct Answer
verified

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

Correct Answer
verified

Diseconomies of scale occur when

Correct Answer
verified

Correct Answer
verified
Accounting profit = Total reve...
View Answer

Describe the difference between the short run and the long run.

Correct Answer
verified
In the short run, the firm con...
View Answer

Variable costs equal fixed costs when nothing is produced.

Correct Answer
verified

A production function describes

Correct Answer
verified

There is general agreement among economists that the long-run time period exceeds one year.

Correct Answer
verified

Table 13-19 -Refer to Table 13-19. What is the shape of the average-fixed-cost curve?

Correct Answer
verified
AFC is always declining as out...
View Answer

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

Correct Answer
verified

Exam 13: The Costs of Production

Several related measures of cost can be derived from a firm's total cost.

Correct AnswerverifiedShow Answer

Table 13-3 -Refer to Table 13-3. If the firm can sell its output for $1 per unit, what is the profit-maximizing level of output?

Correct AnswerverifiedShow Answer

A student might describe information about the costs of production as

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Accounting profit is greater than or equal to economic profit.

Correct AnswerverifiedShow Answer

Total revenue equals

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

David's firm experiences diminishing marginal product for all ranges of inputs. The total cost curve associated with David's firm

Correct AnswerverifiedShow Answer

Table 13-17 Consider the following table of long-run total cost for four different firms: -Refer to Table 13-17. Which firm's long-run marginal cost decreases as output increases?

Correct AnswerverifiedShow Answer

In the long run,

Correct AnswerverifiedShow Answer

Table 13-4 Charles's Math Tutoring -Refer to Table 13-4. Suppose that Charles's math tutoring company has a fixed cost of $50 per month for his cell phone. Each worker costs Charles $60 per day. As output increases from 0 to 45 students, Charles's total cost curve

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Diseconomies of scale occur when

Correct AnswerverifiedShow Answer

Correct AnswerverifiedAccounting profit = Total reve...View AnswerShow Answer

Describe the difference between the short run and the long run.

Correct AnswerverifiedIn the short run, the firm con...View AnswerShow Answer

Variable costs equal fixed costs when nothing is produced.

Correct AnswerverifiedShow Answer

A production function describes

Correct AnswerverifiedShow Answer

There is general agreement among economists that the long-run time period exceeds one year.

Correct AnswerverifiedShow Answer

Table 13-19 -Refer to Table 13-19. What is the shape of the average-fixed-cost curve?

Correct AnswerverifiedAFC is always declining as out...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Accounting profit = Total reve...
View Answer

Correct Answer
verified
In the short run, the firm con...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
AFC is always declining as out...
View Answer

Correct Answer
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