Question 1

Adam Smith describes a visit to a car factory when discussing economies of scale in his book An Inquiry into the Nature and Causes of the Wealth of Nations.

Accepted Answer

A) True 
 B)False

Question 2

In the short run, a firm incurs fixed costs

Accepted Answer

A)  only if it incurs variable costs.
B)  only if it produces no output.
C)  only if it produces a positive quantity of output.
D)  whether it produces output or not.E) A) and D)
F) All of the above

Question 3

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)  macroeconomics
B)  industrial organization
C)  labor economics
D)  monetary economicsE) None of the above
F) A) and B)

Question 4

Table 13-10 
-Refer to Table 13-10. The average total cost of producing 240 units is

Accepted Answer

A)  $0.06.
B)  $0.38.
C)  $0.44.
D)  $30.E) A) and B)
F) A) and D)

Question 5

The difference between accounting profit and economic profit is

Accepted Answer

A)  explicit costs.
B)  implicit costs.
C)  total revenue.
D)  marginal product.E) A) and C)
F) B) and D)

Question 6

Suppose that a firm has only one variable input, labor, and firm output is zero when labor is zero. When the firm hires 6 workers it produces 90 units of output. Fixed cost of production are $6 and the variable cost per unit of labor is $10. The marginal product of the seventh unit of labor is 4. Given this information, what is the total cost of production when the firm hires 7 workers?

Accepted Answer

A)  $66
B)  $76
C)  $906
D)  $946E) A) and D)
F) A) and B)

Question 7

A firm produces 400 units of output at a total cost of $1,200. If fixed costs are $200,

Accepted Answer

A)  average fixed cost is $2.
B)  average variable cost is $2.50.
C)  average total cost is $4.
D)  average total cost is $5.E) A) and B)
F) A) and C)

Question 8

Figure 13-2 
-Refer to Figure 13-2. If the figure represented production at a cookie factory, the factory would be experiencing

Accepted Answer

A)  diminishing marginal product of workers.
B)  diminishing marginal cost of cookie production.
C)  decreasing cost of cookie production.
D)  decreasing output of cookies.E) B) and C)
F) A) and B)

Question 9

Table 13-17
Consider the following table of long-run total cost for four different firms: 
-Refer to Table 13-17. Firm 4's efficient scale occurs at what quantity?

Accepted Answer

A)  2
B)  3
C)  4
D)  5E) All of the above
F) A) and D)

Question 10

For a large firm that produces and sells automobiles, which of the following costs would be a variable cost?

Accepted Answer

A)  the unemployment insurance premium that the firm pays to the state of Missouri that is calculated based on the number of worker-hours that the firm uses
B)  the cost of the steel that is used in producing automobiles
C)  the cost of the electricity of running the machines on the factory floor
D)  All of the above are correct.E) B) and C)
F) A) and D)

Question 11

Assume Jack received all As in his classes last semester. If Jack gets all Bs in his classes this semester, his GPA may or may not fall.

Accepted Answer

A) True 
 B)False

Question 12

Scenario 13-9
Ellie has been working for an engineering firm and earning an annual salary of $80,000. She decides to open her own engineering business. 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. Ellie 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 13-9. According to Ellie's accountant, which of the following revenue totals will yield her business $50,000 in profits?

Accepted Answer

A)  $55,200
B)  $105,200
C)  $132,500
D)  $185,700E) None of the above
F) A) and B)

Question 13

A firm produces 60 units of output with 5 workers, 65 units with 6 workers, and 68 units with 7 workers. The firm's production function exhibits diminishing marginal productivity between 5 and 7 workers.
​

Accepted Answer

A) True 
 B)False

Question 14

A local playground equipment company plans to operate out of its current factory, which is estimated to last 30 years. All cost decisions it makes during the 30-year period

Accepted Answer

A)  are long-run decisions.
B)  are short-run decisions.
C)  involve only maintenance of the factory.
D)  are zero because the cost decisions were made at the beginning of the business.E) B) and C)
F) A) and B)

Question 15

Scenario 13-20
Suppose that a given firm experiences decreasing marginal product of labor with the addition of each worker regardless of the current output level.
-Refer to Scenario 13-20. Average total cost will be

Accepted Answer

A)  rising at all points.
B)  falling at all points.
C)  constant.
D)  U-shaped.E) A) and D)
F) C) and D)

Question 16

Table 13-4
Charles's Math Tutoring 
-Refer to Table 13-4. What is the marginal product of the third worker?

Accepted Answer

A)  15 students
B)  20 students
C)  35 students
D)  60 studentsE) None of the above
F) A) and B)

Question 17

When comparing short-run average total cost with long-run average total cost at a given level of output,

Accepted Answer

A)  short-run average total cost is typically above long-run average total cost.
B)  short-run average total cost is typically the same as long-run average total cost.
C)  short-run average total cost is typically below long-run average total cost.
D)  the relationship between short-run and long-run average total cost follows no clear pattern.E) B) and D)
F) All of the above

Question 18

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

Accepted Answer

MC = change in TC/change in Q, so althou...

Question 19

In the short run, if a firm produces nothing, total costs are zero.

Accepted Answer

A) True 
 B)False

Question 20

If a firm experiences constant returns to scale at all output levels, then its long-run average total cost curve would

Accepted Answer

A)  slope downward.
B)  be horizontal.
C)  slope upward.
D)  slope downward for low output levels and upward for high output levels.E) A) and B)
F) A) and C)

Exam 13: The Costs of Production

Table 13-10 -Refer to Table 13-10. The average total cost of producing 240 units is

Correct Answer
verified

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

Correct Answer
verified
MC = change in TC/change in Q, so althou...
View Answer

A firm produces 400 units of output at a total cost of $1,200. If fixed costs are $200,

Correct Answer
verified

If a firm experiences constant returns to scale at all output levels, then its long-run average total cost curve would

Correct Answer
verified

The difference between accounting profit and economic profit is

Correct Answer
verified

Scenario 13-20 Suppose that a given firm experiences decreasing marginal product of labor with the addition of each worker regardless of the current output level. -Refer to Scenario 13-20. Average total cost will be

Correct Answer
verified

A firm produces 60 units of output with 5 workers, 65 units with 6 workers, and 68 units with 7 workers. The firm's production function exhibits diminishing marginal productivity between 5 and 7 workers.

Correct Answer
verified

Assume Jack received all As in his classes last semester. If Jack gets all Bs in his classes this semester, his GPA may or may not fall.

Correct Answer
verified

Table 13-4 Charles's Math Tutoring -Refer to Table 13-4. What is the marginal product of the third worker?

Correct Answer
verified

Table 13-17 Consider the following table of long-run total cost for four different firms: -Refer to Table 13-17. Firm 4's efficient scale occurs at what quantity?

Correct Answer
verified

Figure 13-2 -Refer to Figure 13-2. If the figure represented production at a cookie factory, the factory would be experiencing

Correct Answer
verified

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

When comparing short-run average total cost with long-run average total cost at a given level of output,

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

In the short run, a firm incurs fixed costs

Correct Answer
verified

A local playground equipment company plans to operate out of its current factory, which is estimated to last 30 years. All cost decisions it makes during the 30-year period

Correct Answer
verified

Adam Smith describes a visit to a car factory when discussing economies of scale in his book An Inquiry into the Nature and Causes of the Wealth of Nations.

Correct Answer
verified

In the short run, if a firm produces nothing, total costs are zero.

Correct Answer
verified

For a large firm that produces and sells automobiles, which of the following costs would be a variable cost?

Correct Answer
verified

Exam 13: The Costs of Production

Table 13-10 -Refer to Table 13-10. The average total cost of producing 240 units is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedMC = change in TC/change in Q, so althou...View AnswerShow Answer

A firm produces 400 units of output at a total cost of $1,200. If fixed costs are $200,

Correct AnswerverifiedShow Answer

If a firm experiences constant returns to scale at all output levels, then its long-run average total cost curve would

Correct AnswerverifiedShow Answer

The difference between accounting profit and economic profit is

Correct AnswerverifiedShow Answer

Scenario 13-20 Suppose that a given firm experiences decreasing marginal product of labor with the addition of each worker regardless of the current output level. -Refer to Scenario 13-20. Average total cost will be

Correct AnswerverifiedShow Answer

A firm produces 60 units of output with 5 workers, 65 units with 6 workers, and 68 units with 7 workers. The firm's production function exhibits diminishing marginal productivity between 5 and 7 workers. ​

Correct AnswerverifiedShow Answer

Assume Jack received all As in his classes last semester. If Jack gets all Bs in his classes this semester, his GPA may or may not fall.

Correct AnswerverifiedShow Answer

Table 13-4 Charles's Math Tutoring -Refer to Table 13-4. What is the marginal product of the third worker?

Correct AnswerverifiedShow Answer

Table 13-17 Consider the following table of long-run total cost for four different firms: -Refer to Table 13-17. Firm 4's efficient scale occurs at what quantity?

Correct AnswerverifiedShow Answer

Figure 13-2 -Refer to Figure 13-2. If the figure represented production at a cookie factory, the factory would be experiencing

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

When comparing short-run average total cost with long-run average total cost at a given level of output,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In the short run, a firm incurs fixed costs

Correct AnswerverifiedShow Answer

A local playground equipment company plans to operate out of its current factory, which is estimated to last 30 years. All cost decisions it makes during the 30-year period

Correct AnswerverifiedShow Answer

Adam Smith describes a visit to a car factory when discussing economies of scale in his book An Inquiry into the Nature and Causes of the Wealth of Nations.

Correct AnswerverifiedShow Answer

In the short run, if a firm produces nothing, total costs are zero.

Correct AnswerverifiedShow Answer

For a large firm that produces and sells automobiles, which of the following costs would be a variable cost?

Correct AnswerverifiedShow Answer

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Correct Answer
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MC = change in TC/change in Q, so althou...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

A firm produces 60 units of output with 5 workers, 65 units with 6 workers, and 68 units with 7 workers. The firm's production function exhibits diminishing marginal productivity between 5 and 7 workers.

Correct Answer
verified

Correct Answer
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Correct Answer
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