Question 1

(Table: Cost Data) Look at the table Cost Data, which shows data for a designer purse factory.The average total cost of producing 2 purses is:

Accepted Answer

A) $60 
B) $120 
C) $190 
D) $220 
A) $60 
B) $120 
C) $190 
D) $220

Question 2

The slope of the total product curve is equal to the average product of labor.True

Accepted Answer

A) True 
 B)False

Question 3

Cindy operates Birds-R-Us, a small store manufacturing and selling 100 bird feeders per month.Cindy's monthly total fixed costs are $500, and her monthly total variable costs are $2,500.If for some reason Cindy's fixed cost fell to $400, then her:

Accepted Answer

A) average fixed costs would increase. 
B) average total costs would decrease. 
C) marginal costs would decrease. 
D) average variable costs would decrease. 
A) average fixed costs would increase. 
B) average total costs would decrease. 
C) marginal costs would decrease. 
D) average variable costs would decrease.

Question 4

Buffalo Aircraft doubles the amount of all of the inputs it uses-the factory doubles in size and twice as many workers are hired.After this expansion, the number of aircraft produced triples.This means that Buffalo Aircraft is operating with:

Accepted Answer

A) increasing marginal cost. 
B) economies of scale. 
C) increasing average total cost. 
D) decreasing average variable cost. 
A) increasing marginal cost. 
B) economies of scale. 
C) increasing average total cost. 
D) decreasing average variable cost.

Question 5

(Table: Costs for Birthday Cakes) Annie has a bakery that specializes in birthday cakes, and her variable costs of producing cakes are shown in the table Costs of Birthday Cakes.Assume that her fixed costs are $10.What is the average total cost of 4 cakes?

Accepted Answer

A) $35 
B) $25 
C) $9.50 
D) $12 
A) $35 
B) $25 
C) $9.50 
D) $12

Question 6

Kaile Cakes produces 10 cakes per day.The marginal cost of the tenth cake is $24, and average total cost of 10 cakes is $6.The average total cost of 9 cakes is:

Accepted Answer

A) $4. 
B) $5. 
C) $6. 
D) $8. 
A) $4. 
B) $5. 
C) $6. 
D) $8.

Question 7

What are some factors that contribute to a firm achieving increasing returns to scale (or economies of scale) in the long run?

Accepted Answer

Larger firms have more opportunities to

Question 8

(Table: Workers and Output) After graduation you achieve your dream of opening your own art shop that specializes in selling mud statues.You pay $10 per day on a loan from your uncle, and you pay $10 per day to each of your workers (who make the mud statues).After careful study, you determine the production information in the table.The total cost of producing 25 statues is

Accepted Answer

A) $10 
B) $20 
C) $25 
D) $30 
A) $10 
B) $20 
C) $25 
D) $30

Question 9

A factor of production whose quantity cannot be changed during the short run is:

Accepted Answer

A) a marginal factor of production. 
B) a fixed factor of production. 
C) an incremental factor of production. 
D) a variable factor of production. 
A) a marginal factor of production. 
B) a fixed factor of production. 
C) an incremental factor of production. 
D) a variable factor of production.

Question 10

Figure: The Total Product     (Figure: The Total Product) Look at the figure The Total Product.Between points A and B the marginal product of labor is:

Accepted Answer

A) increasing. 
B) zero. 
C) falling. 
D) infinite. 
A) increasing. 
B) zero. 
C) falling. 
D) infinite.

Question 11

The U-shape of the long-run average total cost curve is primarily due to:

Accepted Answer

A) technological change. 
B) economies and diseconomies of scale. 
C) increasing and then diminishing returns. 
D) diminishing returns. 
A) technological change. 
B) economies and diseconomies of scale. 
C) increasing and then diminishing returns. 
D) diminishing returns.

Question 12

(Table: Costs of Producing Bagels) Look at the table Cost of Producing Bagels.The total cost of producing two bagels is:

Accepted Answer

A) $0.10. 
B) $0.20. 
C) $0.40. 
D) $0.50. 
A) $0.10. 
B) $0.20. 
C) $0.40. 
D) $0.50.

Question 13

Diminishing returns are a reason:

Accepted Answer

A) the marginal cost curve is downward sloping. 
B) fixed costs remain constant. 
C) the marginal cost curve is upward sloping. 
D) the average fixed cost curve is downward sloping. 
A) the marginal cost curve is downward sloping. 
B) fixed costs remain constant. 
C) the marginal cost curve is upward sloping. 
D) the average fixed cost curve is downward sloping.

Question 14

A firm employs capital as a fixed input and labor as a variable input in the short run.If the cost of capital falls, what will happen to the AVC, ATC, and MC curves? Explain.

Accepted Answer

Because ATC = AVC + AFC, the A

Question 15

Tankao makes ear buds for mobile devices.When Tankao produces 20 sets of ear buds, its average variable cost is $5 per set and its average total cost is $8 per set.Tankao's:

Accepted Answer

A) marginal cost is less than $3 per set. 
B) marginal cost is $3 per set. 
C) average fixed cost is $3 per set. 
D) marginal cost is equal to its average fixed cost. 
A) marginal cost is less than $3 per set. 
B) marginal cost is $3 per set. 
C) average fixed cost is $3 per set. 
D) marginal cost is equal to its average fixed cost.

Question 16

Austin's total fixed cost at the bakery is $3,600 a month.Austin employs 20 workers and pays each worker $8 an hour.The marginal product of the twentieth worker is 12 iced cupcakes an hour.What is the marginal cost of the last cupcake produced by the last worker Austin hired?

Accepted Answer

A) $0.26 
B) $0.66 
C) $3.81 
D) $8 
A) $0.26 
B) $0.66 
C) $3.81 
D) $8

Question 17

When an increase in the firm's output reduces its long-run average total cost, it achieves:

Accepted Answer

A) economies of scale. 
B) diseconomies of scale. 
C) constant returns to scale. 
D) variable returns to scale. 
A) economies of scale. 
B) diseconomies of scale. 
C) constant returns to scale. 
D) variable returns to scale.

Question 18

A planning period during which all of a firm's resources are variable is the:

Accepted Answer

A) long run. 
B) fixed run. 
C) short run. 
D) nominal run. 
A) long run. 
B) fixed run. 
C) short run. 
D) nominal run.

Question 19

The long run refers to the period for which:

Accepted Answer

A) a fixed input exists. 
B) all inputs are variable. 
C) marginal costs are decreasing. 
D) diminishing returns causes marginal cost to increase. 
A) a fixed input exists. 
B) all inputs are variable. 
C) marginal costs are decreasing. 
D) diminishing returns causes marginal cost to increase.

Question 20

In economics, the short run is:

Accepted Answer

A) less than 1 week. 
B) less than 1 month. 
C) enough time to vary output but not plant capacity. 
D) enough time to change all inputs to production. 
A) less than 1 week. 
B) less than 1 month. 
C) enough time to vary output but not plant capacity. 
D) enough time to change all inputs to production.

(Table: Cost Data) Look at the table Cost Data, which shows data for a designer purse factory.The average total cost of producing 2 purses is:

The slope of the total product curve is equal to the average product of labor.True

Cindy operates Birds-R-Us, a small store manufacturing and selling 100 bird feeders per month.Cindy's monthly total fixed costs are $500, and her monthly total variable costs are $2,500.If for some reason Cindy's fixed cost fell to $400, then her:

Buffalo Aircraft doubles the amount of all of the inputs it uses-the factory doubles in size and twice as many workers are hired.After this expansion, the number of aircraft produced triples.This means that Buffalo Aircraft is operating with:

(Table: Costs for Birthday Cakes) Annie has a bakery that specializes in birthday cakes, and her variable costs of producing cakes are shown in the table Costs of Birthday Cakes.Assume that her fixed costs are $10.What is the average total cost of 4 cakes?

Kaile Cakes produces 10 cakes per day.The marginal cost of the tenth cake is $24, and average total cost of 10 cakes is $6.The average total cost of 9 cakes is:

What are some factors that contribute to a firm achieving increasing returns to scale (or economies of scale) in the long run?

A factor of production whose quantity cannot be changed during the short run is:

Figure: The Total Product (Figure: The Total Product) Look at the figure The Total Product.Between points A and B the marginal product of labor is:

The U-shape of the long-run average total cost curve is primarily due to:

(Table: Costs of Producing Bagels) Look at the table Cost of Producing Bagels.The total cost of producing two bagels is:

Diminishing returns are a reason:

A firm employs capital as a fixed input and labor as a variable input in the short run.If the cost of capital falls, what will happen to the AVC, ATC, and MC curves? Explain.

Tankao makes ear buds for mobile devices.When Tankao produces 20 sets of ear buds, its average variable cost is $5 per set and its average total cost is $8 per set.Tankao's:

Austin's total fixed cost at the bakery is $3,600 a month.Austin employs 20 workers and pays each worker $8 an hour.The marginal product of the twentieth worker is 12 iced cupcakes an hour.What is the marginal cost of the last cupcake produced by the last worker Austin hired?

When an increase in the firm's output reduces its long-run average total cost, it achieves:

A planning period during which all of a firm's resources are variable is the:

The long run refers to the period for which:

In economics, the short run is:

First Principles

Economic Models: Trade-Offs and Trade

Supply and Demand

Consumer and Producer Surplus

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Filters

Exam 11: Behind the Supply Curve: Inputs and Costs

(Table: Cost Data) Look at the table Cost Data, which shows data for a designer purse factory.The average total cost of producing 2 purses is:

The slope of the total product curve is equal to the average product of labor.True

Cindy operates Birds-R-Us, a small store manufacturing and selling 100 bird feeders per month.Cindy's monthly total fixed costs are $500, and her monthly total variable costs are $2,500.If for some reason Cindy's fixed cost fell to $400, then her:

Buffalo Aircraft doubles the amount of all of the inputs it uses-the factory doubles in size and twice as many workers are hired.After this expansion, the number of aircraft produced triples.This means that Buffalo Aircraft is operating with:

(Table: Costs for Birthday Cakes) Annie has a bakery that specializes in birthday cakes, and her variable costs of producing cakes are shown in the table Costs of Birthday Cakes.Assume that her fixed costs are $10.What is the average total cost of 4 cakes?

Kaile Cakes produces 10 cakes per day.The marginal cost of the tenth cake is $24, and average total cost of 10 cakes is $6.The average total cost of 9 cakes is:

What are some factors that contribute to a firm achieving increasing returns to scale (or economies of scale) in the long run?

A factor of production whose quantity cannot be changed during the short run is:

Figure: The Total Product (Figure: The Total Product) Look at the figure The Total Product.Between points A and B the marginal product of labor is:

The U-shape of the long-run average total cost curve is primarily due to:

(Table: Costs of Producing Bagels) Look at the table Cost of Producing Bagels.The total cost of producing two bagels is:

Diminishing returns are a reason:

A firm employs capital as a fixed input and labor as a variable input in the short run.If the cost of capital falls, what will happen to the AVC, ATC, and MC curves? Explain.

Tankao makes ear buds for mobile devices.When Tankao produces 20 sets of ear buds, its average variable cost is $5 per set and its average total cost is $8 per set.Tankao's:

Austin's total fixed cost at the bakery is $3,600 a month.Austin employs 20 workers and pays each worker $8 an hour.The marginal product of the twentieth worker is 12 iced cupcakes an hour.What is the marginal cost of the last cupcake produced by the last worker Austin hired?

When an increase in the firm's output reduces its long-run average total cost, it achieves:

A planning period during which all of a firm's resources are variable is the:

The long run refers to the period for which:

In economics, the short run is:

First Principles

Economic Models: Trade-Offs and Trade

Supply and Demand

Consumer and Producer Surplus

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Filters