Question 1

(Table: Cost Data) Look at the table Cost Data, which shows data for a designer purse factory.The average fixed cost of producing 4 purses is:

Accepted Answer

A) $12.50 
B) $47.50 
C) $50 
D) $82.50 
A) $12.50 
B) $47.50 
C) $50 
D) $82.50

Question 2

Diminishing marginal returns means that:

Accepted Answer

A) each additional unit of an input used will decrease output. 
B) each additional unit of an input used will increase output, but by smaller and smaller amounts. 
C) each additional unit of an input used will increase output by larger and larger amounts. 
D) the firm is maximizing profit. 
A) each additional unit of an input used will decrease output. 
B) each additional unit of an input used will increase output, but by smaller and smaller amounts. 
C) each additional unit of an input used will increase output by larger and larger amounts. 
D) the firm is maximizing profit.

Question 3

The total cost curve is:

Accepted Answer

A) positively sloped. 
B) negatively sloped. 
C) vertical. 
D) horizontal. 
A) positively sloped. 
B) negatively sloped. 
C) vertical. 
D) horizontal.

Question 4

Variable cost divided by the quantity of output produced is:

Accepted Answer

A) marginal cost. 
B) average total cost. 
C) average fixed cost. 
D) average variable cost. 
A) marginal cost. 
B) average total cost. 
C) average fixed cost. 
D) average variable cost.

Question 5

Rebecca knows that Becca Furniture's marginal cost curve is above the average total cost curve.This means Becca Furniture's average total cost curve:

Accepted Answer

A) must be rising. 
B) must be flat. 
C) must be falling. 
D) may be rising, falling, or flat depending on other things. 
A) must be rising. 
B) must be flat. 
C) must be falling. 
D) may be rising, falling, or flat depending on other things.

Question 6

When AVC eventually increases as output increases, this is referred to as the effect.

Accepted Answer

A) diminishing returns 
B) spreading 
C) constant cost 
D) increasing returns 
A) diminishing returns 
B) spreading 
C) constant cost 
D) increasing returns

Question 7

The total product curve:

Accepted Answer

A) shows the relation between output and the quantity of a variable input for varying levels of the fixed input. 
B) will become flatter as output increases if there are diminishing returns to the variable input. 
C) will be downward sloping if there are diminishing returns to the variable input. 
D) will become horizontal when the marginal product of the variable input is constant. 
A) shows the relation between output and the quantity of a variable input for varying levels of the fixed input. 
B) will become flatter as output increases if there are diminishing returns to the variable input. 
C) will be downward sloping if there are diminishing returns to the variable input. 
D) will become horizontal when the marginal product of the variable input is constant.

Question 8

Economies and diseconomies of scale are associated with the:

Accepted Answer

A) long-run average total cost curve and the long run. 
B) short-run average total cost curve and the short run. 
C) marginal cost curve and both the long and short run. 
D) average fixed cost curve and the short run. 
A) long-run average total cost curve and the long run. 
B) short-run average total cost curve and the short run. 
C) marginal cost curve and both the long and short run. 
D) average fixed cost curve and the short run.

Question 9

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.Given this expression, Janet is operating in the:

Accepted Answer

A) long run. 
B) short run, and her fixed costs are equal to $100. 
C) long run, and her fixed costs are equal to $100. 
D) short run, and there are no fixed costs. 
A) long run. 
B) short run, and her fixed costs are equal to $100. 
C) long run, and her fixed costs are equal to $100. 
D) short run, and there are no fixed costs.

Question 10

A factor of production whose quantity can 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 11

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

Accepted Answer

A) $0.05. 
B) $0.10. 
C) $0.20. 
D) $0.40. 
A) $0.05. 
B) $0.10. 
C) $0.20. 
D) $0.40.

Question 12

(Table: Tonya's Production Function for Apples) Look at the table Tonya's Production Function for Apples.The information provided tells you that Tonya is operating:

Accepted Answer

A) in the long run. 
B) in the short run. 
C) in a very expensive location.D.at a loss. 
A) in the long run. 
B) in the short run. 
C) in a very expensive location.D.at a loss.

Question 13

(Table: Production Function for Soybeans) The table shows a production function for soybeans.Assume that the fixed input, capital, is 10 acres of land and a tractor, which have a combined cost of $150 per day.The cost of labor is $100 per worker per day.The variable cost of producing 60 bushels of soybeans is:

Accepted Answer

A) $5 
B) $100 
C) $150 
D) $300 
A) $5 
B) $100 
C) $150 
D) $300

Question 14

In the long run:

Accepted Answer

A) all inputs are fixed. 
B) inputs are neither variable nor fixed. 
C) at least one input is variable and one input is fixed. 
D) all inputs are variable. 
A) all inputs are fixed. 
B) inputs are neither variable nor fixed. 
C) at least one input is variable and one input is fixed. 
D) all inputs are variable.

Question 15

Figure: The Total Product     (Figure: The Total Product) Look at the figure The Total Product.When L2 labor is hired, the total product is at a ________and the marginal product of labor is _.

Accepted Answer

A) minimum; zero 
B) maximum; zero 
C) maximum; positive 
D) minimum; falling but still positive 
A) minimum; zero 
B) maximum; zero 
C) maximum; positive 
D) minimum; falling but still positive

Question 16

You own a small deli that produces sandwiches, soups, and other items for customers in your town.Which of the following is a decision most likely to be made in the long run at your deli?

Accepted Answer

A) You order more breadsticks from the local bakery. 
B) You ask your beverage distributor to deliver more soft drinks next week. 
C) You renovate the second floor of your building to increase the size of the dining room. 
D) You place a newspaper advertisement to attract part-time workers from the local college. 
A) You order more breadsticks from the local bakery. 
B) You ask your beverage distributor to deliver more soft drinks next week. 
C) You renovate the second floor of your building to increase the size of the dining room. 
D) You place a newspaper advertisement to attract part-time workers from the local college.

Question 17

The costs associated with variable inputs are ________ costs and the costs associated with ________ inputs are costs.

Accepted Answer

A) variable; fixed; fixed 
B) fixed; fixed; variable 
C) variable; fixed; variableD.fixed; fixed; fixed 
A) variable; fixed; fixed 
B) fixed; fixed; variable 
C) variable; fixed; variableD.fixed; fixed; fixed

Question 18

Figure: Short-Run Costs II     (Figure: Short-Run Costs II) Look at the figure Short-Run Costs II.At six units of output, average total cost is approximately:

Accepted Answer

A) $100. 
B) $120. 
C) $170. 
D) $250. 
A) $100. 
B) $120. 
C) $170. 
D) $250.

Question 19

(Table: Total Cost Data) Look at the table Total Cost Data.The table shows cost data for a bicycle firm operating in the short run.What is the total variable cost for this firm when the firm produces five bicycles?

Accepted Answer

A) $50 
B) $240 
C) $60 
D) $190 
A) $50 
B) $240 
C) $60 
D) $190

Question 20

If the average total cost curve and the average variable cost curveare both U-shaped, then the minimum point of the average total cost curve must lie above the minimum point of the average variable cost curve.True

Accepted Answer

A) True 
 B)False

(Table: Cost Data) Look at the table Cost Data, which shows data for a designer purse factory.The average fixed cost of producing 4 purses is:

Diminishing marginal returns means that:

The total cost curve is:

Variable cost divided by the quantity of output produced is:

Rebecca knows that Becca Furniture's marginal cost curve is above the average total cost curve.This means Becca Furniture's average total cost curve:

When AVC eventually increases as output increases, this is referred to as the effect.

The total product curve:

Economies and diseconomies of scale are associated with the:

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.Given this expression, Janet is operating in the:

A factor of production whose quantity can be changed during the short run is:

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

(Table: Tonya's Production Function for Apples) Look at the table Tonya's Production Function for Apples.The information provided tells you that Tonya is operating:

In the long run:

Figure: The Total Product (Figure: The Total Product) Look at the figure The Total Product.When L2 labor is hired, the total product is at a ________and the marginal product of labor is _.

You own a small deli that produces sandwiches, soups, and other items for customers in your town.Which of the following is a decision most likely to be made in the long run at your deli?

The costs associated with variable inputs are costs and the costs associated with inputs are costs.

Figure: Short-Run Costs II (Figure: Short-Run Costs II) Look at the figure Short-Run Costs II.At six units of output, average total cost is approximately:

(Table: Total Cost Data) Look at the table Total Cost Data.The table shows cost data for a bicycle firm operating in the short run.What is the total variable cost for this firm when the firm produces five bicycles?

If the average total cost curve and the average variable cost curveare both U-shaped, then the minimum point of the average total cost curve must lie above the minimum point of the average variable cost curve.True

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 fixed cost of producing 4 purses is:

Diminishing marginal returns means that:

The total cost curve is:

Variable cost divided by the quantity of output produced is:

Rebecca knows that Becca Furniture's marginal cost curve is above the average total cost curve.This means Becca Furniture's average total cost curve:

When AVC eventually increases as output increases, this is referred to as the effect.

The total product curve:

Economies and diseconomies of scale are associated with the:

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.Given this expression, Janet is operating in the:

A factor of production whose quantity can be changed during the short run is:

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

(Table: Tonya's Production Function for Apples) Look at the table Tonya's Production Function for Apples.The information provided tells you that Tonya is operating:

In the long run:

Figure: The Total Product (Figure: The Total Product) Look at the figure The Total Product.When L2 labor is hired, the total product is at a ________and the marginal product of labor is _.

You own a small deli that produces sandwiches, soups, and other items for customers in your town.Which of the following is a decision most likely to be made in the long run at your deli?

The costs associated with variable inputs are ________ costs and the costs associated with ________ inputs are costs.

Figure: Short-Run Costs II (Figure: Short-Run Costs II) Look at the figure Short-Run Costs II.At six units of output, average total cost is approximately:

(Table: Total Cost Data) Look at the table Total Cost Data.The table shows cost data for a bicycle firm operating in the short run.What is the total variable cost for this firm when the firm produces five bicycles?

If the average total cost curve and the average variable cost curveare both U-shaped, then the minimum point of the average total cost curve must lie above the minimum point of the average variable cost curve.True

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

The costs associated with variable inputs are costs and the costs associated with inputs are costs.