Question 1

If the marginal-cost curve is rising,then so is the average-total-cost curve.

Accepted Answer

A) True 
 B)False

Question 2

Table 13-7
The Flying Elvis Copter Rides
 
-Refer to Table 13-7.What is the value of B?

Accepted Answer

A)   $25
B)   $50
C)   $100
D)   $200E) B) and D)
F) None of the above

Question 3

Total revenue minus only explicit costs is called

Accepted Answer

A)   accounting profit.
B)   economic profit.
C)   average total cost.
D)   implicit profit.E) All of the above
F) C) and D)

Question 4

Industrial organization is the study of how

Accepted Answer

A)   labor unions organize workers in industries.
B)   profitable firms are in organized industries.
C)   industries organize for political advantage.
D)   firms' decisions regarding prices and quantities depend on the market conditions they face.E) C) and D)
F) None of the above

Question 5

Which of the following is the best example of a variable cost?

Accepted Answer

A)   monthly wage payments for hired labor
B)   annual property tax payments for a building
C)   monthly rent payments for a warehouse
D)   annual insurance payments for a warehouseE) None of the above
F) A) and C)

Question 6

Table 13-16
Listed in the table are the long-run total costs for three different firms.
 
-Refer to Table 13-16.Firm B is experiencing constant returns to scale.

Accepted Answer

A) True 
 B)False

Question 7

Figure 13-5
 
-Refer to Figure 13-5.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.E) All of the above
F) A) and B)

Question 8

Let L represent the number of workers hired by a firm,and let Q represent that firm's quantity of output.Assume two points on the firm's production function are (L=6,Q=147) and (L=7,Q=174) .The marginal product of the seventh worker is

Accepted Answer

A)   25 units of output.
B)   27 units of output.
C)   37 units of output.
D)   174 units of output.E) A) and B)
F) A) and C)

Question 9

Table 13-13
 
-Refer to Table 13-13.What is the total fixed cost for this firm?

Accepted Answer

A)   $20
B)   $30
C)   $40
D)   $50E) None of the above
F) A) and B)

Question 10

Scenario 13-16
A certain firm produces and sells staplers. Last year, it produced 7,000 staplers and sold each stapler for $6. In producing the 7,000 staplers, it incurred variable costs of $28,000 and a total cost of $45,000.
-Refer to Scenario 13-16.In producing the 7,000 staplers,the firm's average variable cost was

Accepted Answer

A)   $2.43.
B)   $4.00.
C)   $6.00.
D)   $6.43.E) A) and C)
F) A) and B)

Question 11

Table 13-1
 
-Refer to Table 13-1.What is total output when 1 worker is hired?

Accepted Answer

A)   30
B)   40
C)   120
D)   160E) A) and B)
F) B) and D)

Question 12

In the long run Firm A incurs total costs of $1,200 when output is 30 units and $1,650 when output is 40 units.Firm A exhibits

Accepted Answer

A)   diseconomies of scale because total cost is rising as output rises.
B)   diseconomies of scale because average total cost is rising as output rises.
C)   economies of scale because total cost is rising as output rises.
D)   economies of scale because average total cost is falling as output rises.E) A) and D)
F) B) and C)

Question 13

A firm has a fixed cost of $200 in its first year of operation.When the firm produces 99 units of output,its total costs are $4,000.The marginal cost of producing the 100th unit of output is $700.What is the total cost of producing 100 units?

Accepted Answer

A)   $900
B)   $4,200
C)   $4,700
D)   $4,900E) C) and D)
F) A) and C)

Question 14

Economic profit

Accepted Answer

A)   will never exceed accounting profit.
B)   is most often equal to accounting profit.
C)   is always at least as large as accounting profit.
D)   is a less complete measure of profitability than accounting profit.E) C) and D)
F) All of the above

Question 15

One assumption that distinguishes short-run cost analysis from long-run cost analysis for a profit-maximizing firm is that in the short run,

Accepted Answer

A)   output is not variable.
B)   the number of workers used to produce the firm's product is fixed.
C)   the size of the factory is fixed.
D)   there are no fixed costs.E) A) and B)
F) A) and C)

Question 16

Table 13-9
 
-Refer to Table 13-9.The marginal cost of producing the 6th poster is

Accepted Answer

A)   $1.00.
B)   $3.50.
C)   $5.00.
D)   $6.00.E) None of the above
F) B) and C)

Question 17

Because of the greater flexibility that firms have in the long run,all short-run cost curves lie on or above the long-run curve.

Accepted Answer

A) True 
 B)False

Question 18

The difference between accounting profit and economic profit relates to

Accepted Answer

A)   the manner in which revenues are defined.
B)   how marginal revenue is calculated.
C)   the manner in which costs are defined.
D)   the price of the good in the market.E) B) and D)
F) A) and C)

Question 19

Which of the following costs of publishing a book is a fixed cost?

Accepted Answer

A)   author royalties of 5% per book
B)   the costs of paper and binding
C)   shipping and postage expenses
D)   composition, typesetting, and jacket design for the bookE) All of the above
F) B) and C)

Question 20

Diminishing marginal product suggests that the marginal

Accepted Answer

A)   cost of an extra worker is unchanged.
B)   cost of an extra worker is less than the previous worker's marginal cost.
C)   product of an extra worker is less than the previous worker's marginal product.
D)   product of an extra worker is greater than the previous worker's marginal product.E) B) and D)
F) B) and C)

Exam 13: The Costs of Production.

Table 13-1 -Refer to Table 13-1.What is total output when 1 worker is hired?

Correct Answer
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Diminishing marginal product suggests that the marginal

Correct Answer
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Industrial organization is the study of how

Correct Answer
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Total revenue minus only explicit costs is called

Correct Answer
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One assumption that distinguishes short-run cost analysis from long-run cost analysis for a profit-maximizing firm is that in the short run,

Correct Answer
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Table 13-9 -Refer to Table 13-9.The marginal cost of producing the 6th poster is

Correct Answer
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In the long run Firm A incurs total costs of $1,200 when output is 30 units and $1,650 when output is 40 units.Firm A exhibits

Correct Answer
verified

Let L represent the number of workers hired by a firm,and let Q represent that firm's quantity of output.Assume two points on the firm's production function are (L=6,Q=147) and (L=7,Q=174) .The marginal product of the seventh worker is

Correct Answer
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Figure 13-5 -Refer to Figure 13-5.Curve D intersects curve C

Correct Answer
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Table 13-16 Listed in the table are the long-run total costs for three different firms. -Refer to Table 13-16.Firm B is experiencing constant returns to scale.

Correct Answer
verified

Because of the greater flexibility that firms have in the long run,all short-run cost curves lie on or above the long-run curve.

Correct Answer
verified

Economic profit

Correct Answer
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If the marginal-cost curve is rising,then so is the average-total-cost curve.

Correct Answer
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The difference between accounting profit and economic profit relates to

Correct Answer
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Which of the following costs of publishing a book is a fixed cost?

Correct Answer
verified

A firm has a fixed cost of $200 in its first year of operation.When the firm produces 99 units of output,its total costs are $4,000.The marginal cost of producing the 100th unit of output is $700.What is the total cost of producing 100 units?

Correct Answer
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Correct Answer
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Which of the following is the best example of a variable cost?

Correct Answer
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Table 13-7 The Flying Elvis Copter Rides -Refer to Table 13-7.What is the value of B?

Correct Answer
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Table 13-13 -Refer to Table 13-13.What is the total fixed cost for this firm?

Correct Answer
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Exam 13: The Costs of Production.

Table 13-1 -Refer to Table 13-1.What is total output when 1 worker is hired?

Correct AnswerverifiedShow Answer

Diminishing marginal product suggests that the marginal

Correct AnswerverifiedShow Answer

Industrial organization is the study of how

Correct AnswerverifiedShow Answer

Total revenue minus only explicit costs is called

Correct AnswerverifiedShow Answer

One assumption that distinguishes short-run cost analysis from long-run cost analysis for a profit-maximizing firm is that in the short run,

Correct AnswerverifiedShow Answer

Table 13-9 -Refer to Table 13-9.The marginal cost of producing the 6th poster is

Correct AnswerverifiedShow Answer

In the long run Firm A incurs total costs of $1,200 when output is 30 units and $1,650 when output is 40 units.Firm A exhibits

Correct AnswerverifiedShow Answer

Let L represent the number of workers hired by a firm,and let Q represent that firm's quantity of output.Assume two points on the firm's production function are (L=6,Q=147) and (L=7,Q=174) .The marginal product of the seventh worker is

Correct AnswerverifiedShow Answer

Figure 13-5 -Refer to Figure 13-5.Curve D intersects curve C

Correct AnswerverifiedShow Answer

Table 13-16 Listed in the table are the long-run total costs for three different firms. -Refer to Table 13-16.Firm B is experiencing constant returns to scale.

Correct AnswerverifiedShow Answer

Because of the greater flexibility that firms have in the long run,all short-run cost curves lie on or above the long-run curve.

Correct AnswerverifiedShow Answer

Economic profit

Correct AnswerverifiedShow Answer

If the marginal-cost curve is rising,then so is the average-total-cost curve.

Correct AnswerverifiedShow Answer

The difference between accounting profit and economic profit relates to

Correct AnswerverifiedShow Answer

Which of the following costs of publishing a book is a fixed cost?

Correct AnswerverifiedShow Answer

A firm has a fixed cost of $200 in its first year of operation.When the firm produces 99 units of output,its total costs are $4,000.The marginal cost of producing the 100th unit of output is $700.What is the total cost of producing 100 units?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is the best example of a variable cost?

Correct AnswerverifiedShow Answer

Table 13-7 The Flying Elvis Copter Rides -Refer to Table 13-7.What is the value of B?

Correct AnswerverifiedShow Answer

Table 13-13 -Refer to Table 13-13.What is the total fixed cost for this firm?

Correct AnswerverifiedShow Answer

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