Question 1

The long-run average cost curve will be upward sloping when the firm is experiencing:

Accepted Answer

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

Question 2

Figure: The Marginal Product of Labor     (Figure: The Marginal Product of Labor) Look at the figure The Marginal Product of Labor.The total product of labor for five workers is:

Accepted Answer

A) 11 bushels. 
B) 45 bushels. 
C) 55 bushels. 
D) 75 bushels. 
A) 11 bushels. 
B) 45 bushels. 
C) 55 bushels. 
D) 75 bushels.

Question 3

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

Accepted Answer

A) $60 
B) $50 
C) $35 
D) $20 
A) $60 
B) $50 
C) $35 
D) $20

Question 4

Austin's total fixed cost is $3,600 a month at his cupcake bakery.Austin employs 20 workers and pays each worker $600 a month.If labor is his only variable cost, what is Austin's total cost?

Accepted Answer

A) $3,600 
B) $1,200 
C) $15,600 
D) $12,000 
A) $3,600 
B) $1,200 
C) $15,600 
D) $12,000

Question 5

Average total cost is the ratio of:

Accepted Answer

A) total cost to the marginal cost. 
B) total cost to the quantity of output. 
C) total cost to the amount of variable input. 
D) marginal cost to the amount of variable input. 
A) total cost to the marginal cost. 
B) total cost to the quantity of output. 
C) total cost to the amount of variable input. 
D) marginal cost to the amount of variable input.

Question 6

(Table: Output and Marginal Cost) Look at the table Output and Marginal Cost.After graduation you achieve your dream of opening your own art shop that specializes in selling mud statues.After careful study, you determine the information in the table.How many workers should you hire to minimize your average variable costs?

Accepted Answer

A) two 
B) three 
C) four 
D) five 
A) two 
B) three 
C) four 
D) five

Question 7

An input whose quantity can be changed in the short run is:

Accepted Answer

A) a marginal input. 
B) a fixed input. 
C) an incremental input. 
D) a variable input. 
A) a marginal input. 
B) a fixed input. 
C) an incremental input. 
D) a variable input.

Question 8

(Table: Output and Costs) Look at the table Output and Costs.Using the information in the table, when output equals four, total variable cost equals:

Accepted Answer

A) 48. 
B) 38. 
C) 58. 
D) 28. 
A) 48. 
B) 38. 
C) 58. 
D) 28.

Question 9

It is common in large beer breweries for the long-run average total cost to decline as output increases.This indicates that many breweries operate under:

Accepted Answer

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

Question 10

(Table: Workers and Output) Look at the 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.How many workers should you hire to minimize your marginal costs?

Accepted Answer

A) two 
B) three 
C) four 
D) five 
A) two 
B) three 
C) four 
D) five

Question 11

When Caroline's dress factory hires two workers, the total product is 50 dresses.When she hires three workers, total product is 48, and when she hires four workers, total product is 46.The marginal product of the third and fourth workers is

Accepted Answer

A) increasing and positive 
B) increasing and negative 
C) decreasing and positive 
D) decreasing and negative. 
A) increasing and positive 
B) increasing and negative 
C) decreasing and positive 
D) decreasing and negative.

Question 12

The total cost curve for a snowmobile dealership shows how cost depends on the quantity of ________.

Accepted Answer

A) total; fixed inputs 
B) average; variable 
C) total; output 
D) marginal; output 
A) total; fixed inputs 
B) average; variable 
C) total; output 
D) marginal; output

Question 13

(Table: Bonnie's Production Function for Good Z) Look at the table Bonnie's Production Function for good Z.The costs that vary with Bonnie's level of production are her:

Accepted Answer

A) fixed costs. 
B) variable costs. 
C) rent and insurance. 
D) costs that remain the same regardless of what she produces. 
A) fixed costs. 
B) variable costs. 
C) rent and insurance. 
D) costs that remain the same regardless of what she produces.

Question 14

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

Accepted Answer

A) $0.10. 
B) $0.20. 
C) $0.80. 
D) $0.90. 
A) $0.10. 
B) $0.20. 
C) $0.80. 
D) $0.90.

Question 15

Figure: Short-Run Costs II   (Figure: Short-Run Costs II) Look at the figure Short-Run Costs II.Curve 1 crosses the average total cost curve at:

Accepted Answer

A) the minimum value of curve 2. 
B) approximately 4.3 units of output. 
C) approximately 2.8 units of output. 
D) point A 
A) the minimum value of curve 2. 
B) approximately 4.3 units of output. 
C) approximately 2.8 units of output. 
D) point A

Question 16

(Table: Cost Data) Look at the table Cost Data, which shows data for a designer purse factory.The average fixed cost of producing 5 purses is:

Accepted Answer

A) $0 
B) $50 
C) $25 
D) $10 
A) $0 
B) $50 
C) $25 
D) $10

Question 17

Janet's poodle grooming salon has a total cost curve expressed by the equation TC = 100 + 3Q₂, where Q is the quantity of dogs groomed.Janet notices that as she grooms more dogs, her total cost curve:

Accepted Answer

A) becomes steeper. 
B) becomes flatter. 
C) stays constant. 
D) becomes steeper, and then becomes horizontal. 
A) becomes steeper. 
B) becomes flatter. 
C) stays constant. 
D) becomes steeper, and then becomes horizontal.

Question 18

Darren runs a barbershop with average fixed costs equal to $60 per day and a total output of 50 haircuts per day.What is his weekly total fixed cost if he is open six days per week?

Accepted Answer

A) $18,000 
B) $3,000 
C) $60 
D) The answer cannot be determined with the information available. 
A) $18,000 
B) $3,000 
C) $60 
D) The answer cannot be determined with the information available.

Question 19

The long-run average total cost of producing 100 units of output is $4, while the long-run average cost of producing 110 units of output is $4.These numbers suggest that the firm producing this output has:

Accepted Answer

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

Question 20

When an additional unit of a variable input adds less to total product than the previous unit, the firm must be experiencing:

Accepted Answer

A) increasing returns. 
B) diminishing marginal returns. 
C) diminishing total returns. 
D) diminishing marginal returns and diminishing total returns. 
A) increasing returns. 
B) diminishing marginal returns. 
C) diminishing total returns. 
D) diminishing marginal returns and diminishing total returns.

The long-run average cost curve will be upward sloping when the firm is experiencing:

Figure: The Marginal Product of Labor (Figure: The Marginal Product of Labor) Look at the figure The Marginal Product of Labor.The total product of labor for five workers is:

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

Austin's total fixed cost is $3,600 a month at his cupcake bakery.Austin employs 20 workers and pays each worker $600 a month.If labor is his only variable cost, what is Austin's total cost?

Average total cost is the ratio of:

An input whose quantity can be changed in the short run is:

(Table: Output and Costs) Look at the table Output and Costs.Using the information in the table, when output equals four, total variable cost equals:

It is common in large beer breweries for the long-run average total cost to decline as output increases.This indicates that many breweries operate under:

When Caroline's dress factory hires two workers, the total product is 50 dresses.When she hires three workers, total product is 48, and when she hires four workers, total product is 46.The marginal product of the third and fourth workers is

The total cost curve for a snowmobile dealership shows how cost depends on the quantity of ________.

(Table: Bonnie's Production Function for Good Z) Look at the table Bonnie's Production Function for good Z.The costs that vary with Bonnie's level of production are her:

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

Figure: Short-Run Costs II (Figure: Short-Run Costs II) Look at the figure Short-Run Costs II.Curve 1 crosses the average total cost curve at:

(Table: Cost Data) Look at the table Cost Data, which shows data for a designer purse factory.The average fixed cost of producing 5 purses is:

Janet's poodle grooming salon has a total cost curve expressed by the equation TC = 100 + 3Q₂, where Q is the quantity of dogs groomed.Janet notices that as she grooms more dogs, her total cost curve:

Darren runs a barbershop with average fixed costs equal to $60 per day and a total output of 50 haircuts per day.What is his weekly total fixed cost if he is open six days per week?

The long-run average total cost of producing 100 units of output is $4, while the long-run average cost of producing 110 units of output is $4.These numbers suggest that the firm producing this output has:

When an additional unit of a variable input adds less to total product than the previous unit, the firm must be experiencing:

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

The long-run average cost curve will be upward sloping when the firm is experiencing:

Figure: The Marginal Product of Labor (Figure: The Marginal Product of Labor) Look at the figure The Marginal Product of Labor.The total product of labor for five workers is:

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

Austin's total fixed cost is $3,600 a month at his cupcake bakery.Austin employs 20 workers and pays each worker $600 a month.If labor is his only variable cost, what is Austin's total cost?

Average total cost is the ratio of:

An input whose quantity can be changed in the short run is:

(Table: Output and Costs) Look at the table Output and Costs.Using the information in the table, when output equals four, total variable cost equals:

It is common in large beer breweries for the long-run average total cost to decline as output increases.This indicates that many breweries operate under:

When Caroline's dress factory hires two workers, the total product is 50 dresses.When she hires three workers, total product is 48, and when she hires four workers, total product is 46.The marginal product of the third and fourth workers is

The total cost curve for a snowmobile dealership shows how cost depends on the quantity of ________.

(Table: Bonnie's Production Function for Good Z) Look at the table Bonnie's Production Function for good Z.The costs that vary with Bonnie's level of production are her:

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

Figure: Short-Run Costs II (Figure: Short-Run Costs II) Look at the figure Short-Run Costs II.Curve 1 crosses the average total cost curve at:

(Table: Cost Data) Look at the table Cost Data, which shows data for a designer purse factory.The average fixed cost of producing 5 purses is:

Janet's poodle grooming salon has a total cost curve expressed by the equation TC = 100 + 3Q₂, where Q is the quantity of dogs groomed.Janet notices that as she grooms more dogs, her total cost curve:

Darren runs a barbershop with average fixed costs equal to $60 per day and a total output of 50 haircuts per day.What is his weekly total fixed cost if he is open six days per week?

The long-run average total cost of producing 100 units of output is $4, while the long-run average cost of producing 110 units of output is $4.These numbers suggest that the firm producing this output has:

When an additional unit of a variable input adds less to total product than the previous unit, the firm must be experiencing:

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