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Exam 12: The Costs of Production

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Question 31

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Total cost can be divided into two types of costs:

A) fixed costs and variable costs.
B) fixed costs and marginal costs.
C) variable costs and marginal costs.
D) average costs and marginal costs.

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Question 32

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Figure 12-6 -Refer to Figure 12-6.Which of the following can be inferred from the figure above? (i) Marginal cost is increasing at all levels of output. (ii) Marginal product is increasing at low levels of output. (iii) Marginal product is decreasing at high levels of output.

A) (i) and (ii) only
B) (ii) and (iii) only
C) (i) and (iii) only
D) (ii) only

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Question 33

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In the long run Al's Sandwich Shop incurs total costs of $2,500 when output is 1,250 units and $3,000 when output is 1,500 units.For this range of output,Al's exhibits

Table 12-7 The Flying Elvis Copter Rides -Refer to Table 12-7.What is the value of R?

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

Suppose Jan started up a small lemonade stand business last month.Variable costs for Jan's lemonade stand now include the cost of

Foregone investment opportunities are an example of

Bev is opening her own court-reporting business.She financed the business by withdrawing money from her personal savings account.When she closed the account,the bank representative mentioned that she would have earned $300 in interest next year.If Bev hadn't opened her own business,she would have earned a salary of $25,000.In her first year,Bev's revenues were $30,000.Which of the following statements is correct?

For a typical firm,fixed costs increase in direct proportion to the increases in output.

In the long run Firm A incurs total costs of $900 when output is 30 units and $1,200 when output is 40 units.Firm A exhibits

A firm has a fixed cost of $500 in its first year of operation.When the firm produces 100 units of output,its total costs are $4,500.The marginal cost of producing the 101st unit of output is $300.What is the total cost of producing 101 units?

Total cost is the

Table 12-13 -Refer to Table 12-13.What is variable cost when output equals 30 units?

Table 12-3 -Refer to Table 12-3.The marginal product of the third worker is

The average-total-cost curve is unaffected by diminishing marginal product.

If the marginal cost of producing the tenth unit of output is $3,and if the average total cost of producing the tenth unit of output is $2,then at ten units of output,average total cost is rising.

Economists assume that the goal of the firm is to maximize total

Table 12-15 Consider the following table of long-run total cost for four different firms: -Refer to Table 12-13.Which firm has constant returns to scale over the entire range of output?

The difference between accounting profit and economic profit is

If the marginal cost of producing the fifth unit of output is higher than the marginal cost of producing the fourth unit of output,then at five units of output,average total cost must be rising.