Question 1

​Table 13-16 
-Refer to Table 13-16. What is the marginal cost of the 4th unit of output?

Accepted Answer

A)  $​40
B)  ​$52
C)  ​$68
D)  ​$136E) A) and D)
F) B) and D)

Question 2

The things that must be forgone to acquire a good are called

Accepted Answer

A)  implicit costs.
B)  opportunity costs.
C)  explicit costs.
D)  accounting costs.E) None of the above
F) A) and B)

Question 3

Total cost is the

Accepted Answer

A)  amount a firm receives for the sale of its output.
B)  fixed cost less variable cost.
C)  market value of the inputs a firm uses in production.
D)  quantity of output minus the quantity of inputs used to make a good.E) None of the above
F) B) and D)

Question 4

Profit equals total revenue minus total cost.

Accepted Answer

A) True 
 B)False

Question 5

Table 13-11 
-Refer to Table 13-11. The average variable cost of producing 4 posters is

Accepted Answer

A)  $2.00.
B)  $2.50.
C)  $3.33.
D)  $5.00.E) B) and C)
F) All of the above

Question 6

Table 13-1 
-Refer to Table 13-1. What is total output when 4 workers are hired?

Accepted Answer

A)  -10
B)  50
C)  135
D)  185E) C) and D)
F) A) and D)

Question 7

Pete owns a shoe-shine business. Which of the following costs would be implicit costs? (i) 
Shoe polish
(ii) 
Rent on the shoe stand
(iii) 
Wages Pete could earn delivering newspapers
(iv) 
Interest that Pete's money was earning before he spent his savings to set up the shoe-shine business

Accepted Answer

A)  (i)  and (ii)  only
B)  (iv)  only
C)  (iii)  and (iv)  only
D)  (i) , (ii) , (iii) , and (iv) E) None of the above
F) B) and C)

Question 8

Average total cost is very high when a small amount of output is produced because

Accepted Answer

A)  average variable cost is high.
B)  average fixed cost is high.
C)  marginal cost is high.
D)  marginal product is high.E) B) and D)
F) All of the above

Question 9

Table 13-8 
-Refer to Table 13-8. What is the average variable cost of producing 5 units of output?

Accepted Answer

A)  $4
B)  $5
C)  $40
D)  $44E) C) and D)
F) B) and D)

Question 10

Table 13-9 
-Refer to Table 13-9. For the firm whose production function and costs are specified in the table, its average-total-cost curve is

Accepted Answer

A)  constant.
B)  decreasing.
C)  increasing.
D)  U-shaped.E) All of the above
F) A) and D)

Question 11

In the long run a company that produces and sells kayaks incurs total costs of $15,000 when output is 30 kayaks and $20,000 when output is 40 kayaks. The kayak company exhibits

Accepted Answer

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

Question 12

Table 13-18 
-Refer to Table 13-18. What is the total output of five workers?

Accepted Answer

Total output of four workers =...

Question 13

If marginal cost is equal to average total cost, then

Accepted Answer

A)  marginal cost is minimized.
B)  average total cost is minimized.
C)  average variable cost is minimized.
D)  marginal cost is zero.E) B) and C)
F) A) and C)

Question 14

Eldin is a house painter. He can paint three houses per week. He is considering hiring his friend Murphy. Murphy can paint five houses per week. What is the maximum total output possible if Eldin hires Murphy?

Accepted Answer

A)  2 houses
B)  3 houses
C)  5 houses
D)  8 housesE) A) and B)
F) B) and C)

Question 15

Pete owns a shoe-shine business. His accountant most likely includes which of the following costs on his financial statements? (i) 
Shoe polish
(ii) 
Rent on the shoe stand
(iii) 
Wages Pete could earn delivering newspapers
(iv) 
Interest that Pete's money was earning before he spent his savings to set up the shoe-shine business

Accepted Answer

A)  (i)  only
B)  (i)  and (ii)  only
C)  (iii)  and (iv)  only
D)  (i) , (ii) , (iii) , and (iv) E) C) and D)
F) A) and D)

Question 16

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?

Accepted Answer

A)  $46.53
B)  $800
C)  $4,800
D)  $5,300E) B) and D)
F) B) and C)

Question 17

Table 13-18 
-Refer to Table 13-18. What is the shape of the average-variable-cost curve?

Accepted Answer

AVC = VC/Q, where VC is graphed on the v...

Question 18

Firms may experience diseconomies of scale when

Accepted Answer

A)  they are too small to take advantage of specialization.
B)  large management structures are bureaucratic and inefficient.
C)  there are too few employees, and managers do not have enough to do.
D)  average fixed costs begin to rise again.E) B) and C)
F) A) and D)

Question 19

Economists assume that the typical person who starts her own business does so with the intention of

Accepted Answer

A)  donating the profits from her business to charity.
B)  capturing the highest number of sales in her industry.
C)  maximizing profits.
D)  minimizing costs.E) A) and D)
F) B) and D)

Question 20

Kelly has decided to start his own business giving sailing lessons. To purchase equipment for the business, Kelly withdrew $1,000 from his savings account, which was earning 3% interest, and borrowed an additional $2,000 from the bank at an interest rate of 7%. What is Kelly's annual opportunity cost of the financial capital that has been invested in the business?

Accepted Answer

A)  $30
B)  $140
C)  $170
D)  $300E) None of the above
F) B) and C)

Exam 13: The Costs of Production

Table 13-18 -Refer to Table 13-18. What is the shape of the average-variable-cost curve?

Correct Answer
verified
AVC = VC/Q, where VC is graphed on the v...
View Answer

Profit equals total revenue minus total cost.

Correct Answer
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Table 13-9 -Refer to Table 13-9. For the firm whose production function and costs are specified in the table, its average-total-cost curve is

Correct Answer
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Average total cost is very high when a small amount of output is produced because

Correct Answer
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Correct Answer
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The things that must be forgone to acquire a good are called

Correct Answer
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If marginal cost is equal to average total cost, then

Correct Answer
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Table 13-11 -Refer to Table 13-11. The average variable cost of producing 4 posters is

Correct Answer
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Table 13-1 -Refer to Table 13-1. What is total output when 4 workers are hired?

Correct Answer
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Correct Answer
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Economists assume that the typical person who starts her own business does so with the intention of

Correct Answer
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Table 13-16 -Refer to Table 13-16. What is the marginal cost of the 4th unit of output?

Correct Answer
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Table 13-8 -Refer to Table 13-8. What is the average variable cost of producing 5 units of output?

Correct Answer
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Total cost is the

Correct Answer
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Pete owns a shoe-shine business. Which of the following costs would be implicit costs? (i) Shoe polish (ii) Rent on the shoe stand (iii) Wages Pete could earn delivering newspapers (iv) Interest that Pete's money was earning before he spent his savings to set up the shoe-shine business

Correct Answer
verified

Eldin is a house painter. He can paint three houses per week. He is considering hiring his friend Murphy. Murphy can paint five houses per week. What is the maximum total output possible if Eldin hires Murphy?

Correct Answer
verified

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?

Correct Answer
verified

Firms may experience diseconomies of scale when

Correct Answer
verified

In the long run a company that produces and sells kayaks incurs total costs of $15,000 when output is 30 kayaks and $20,000 when output is 40 kayaks. The kayak company exhibits

Correct Answer
verified

Table 13-18 -Refer to Table 13-18. What is the total output of five workers?

Correct Answer
verified
Total output of four workers =...
View Answer

Exam 13: The Costs of Production

Table 13-18 -Refer to Table 13-18. What is the shape of the average-variable-cost curve?

Correct AnswerverifiedAVC = VC/Q, where VC is graphed on the v...View AnswerShow Answer

Profit equals total revenue minus total cost.

Correct AnswerverifiedShow Answer

Table 13-9 -Refer to Table 13-9. For the firm whose production function and costs are specified in the table, its average-total-cost curve is

Correct AnswerverifiedShow Answer

Average total cost is very high when a small amount of output is produced because

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The things that must be forgone to acquire a good are called

Correct AnswerverifiedShow Answer

If marginal cost is equal to average total cost, then

Correct AnswerverifiedShow Answer

Table 13-11 -Refer to Table 13-11. The average variable cost of producing 4 posters is

Correct AnswerverifiedShow Answer

Table 13-1 -Refer to Table 13-1. What is total output when 4 workers are hired?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Economists assume that the typical person who starts her own business does so with the intention of

Correct AnswerverifiedShow Answer

​Table 13-16 -Refer to Table 13-16. What is the marginal cost of the 4th unit of output?

Correct AnswerverifiedShow Answer

Table 13-8 -Refer to Table 13-8. What is the average variable cost of producing 5 units of output?

Correct AnswerverifiedShow Answer

Total cost is the

Correct AnswerverifiedShow Answer

Pete owns a shoe-shine business. Which of the following costs would be implicit costs? (i) Shoe polish (ii) Rent on the shoe stand (iii) Wages Pete could earn delivering newspapers (iv) Interest that Pete's money was earning before he spent his savings to set up the shoe-shine business

Correct AnswerverifiedShow Answer

Eldin is a house painter. He can paint three houses per week. He is considering hiring his friend Murphy. Murphy can paint five houses per week. What is the maximum total output possible if Eldin hires Murphy?

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

Firms may experience diseconomies of scale when

Correct AnswerverifiedShow Answer

In the long run a company that produces and sells kayaks incurs total costs of $15,000 when output is 30 kayaks and $20,000 when output is 40 kayaks. The kayak company exhibits

Correct AnswerverifiedShow Answer

Table 13-18 -Refer to Table 13-18. What is the total output of five workers?

Correct AnswerverifiedTotal output of four workers =...View AnswerShow Answer

Correct Answer
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AVC = VC/Q, where VC is graphed on the v...
View Answer

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Table 13-16 -Refer to Table 13-16. What is the marginal cost of the 4th unit of output?

Correct Answer
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Total output of four workers =...
View Answer