Question 1

Use the following to answer questions:  
-(Table: Cost Data) Look at the table Cost Data. The average variable cost of producing 5 purses is:

Accepted Answer

A)  $10. 
B)  $38. 
C)  $48. 
D)  $190. 
A)  $10. 
B)  $38. 
C)  $48. 
D)  $190.

Question 2

The shape of the marginal cost curve is the mirror image of the shape of the _____ curve.

Accepted Answer

A)  total product 
B)  average product 
C)  marginal product 
D)  average total cost 
A)  total product 
B)  average product 
C)  marginal product 
D)  average total cost

Question 3

Use the following to answer questions:  
-(Table: Cakes) Look at the table Cakes. Pat is opening a bakery to make and sell special birthday cakes. She is trying to decide how many mixers to purchase. Her estimated fixed and average variable costs if she purchases one, two, or three mixers are shown in the table. Assume that average variable costs do not vary with the quantity of output. If Pat purchases one mixer and bakes 200 cakes per day, what is her average fixed cost?

Accepted Answer

A)  $5 
B)  $10 
C)  $200 
D)  $1,000 
A)  $5 
B)  $10 
C)  $200 
D)  $1,000

Question 4

In the short run, why is it believed that the total product curve increases at a decreasing rate when more labor is added to the production function?

Accepted Answer

The principle of diminishing marginal re

Question 5

Use the following to answer questions:
Figure: The Total Product  
-(Figure: The Total Product) Look at the figure The Total Product. For hiring labor between zero and L1:

Accepted Answer

A)  the marginal product of labor is increasing. 
B)  the marginal product of labor is decreasing. 
C)  the total product is increasing at a diminishing rate. 
D)  the total product is decreasing. 
A)  the marginal product of labor is increasing. 
B)  the marginal product of labor is decreasing. 
C)  the total product is increasing at a diminishing rate. 
D)  the total product is decreasing.

Question 6

Consider the statement, "When the marginal cost is rising, the average total cost must also be rising." Is this statement true or false? Explain your reasoning.

Accepted Answer

This statement is sometimes true and som

Question 7

Buford Bus Manufacturing installs a new assembly line. As a result, the output per worker increases. The marginal cost of output at Buford:

Accepted Answer

A)  will increase (the MC curve will shift up). 
B)  will decrease (the MC curve will shift down). 
C)  will be unchanged. 
D)  is at its maximum. 
A)  will increase (the MC curve will shift up). 
B)  will decrease (the MC curve will shift down). 
C)  will be unchanged. 
D)  is at its maximum.

Question 8

In the long run, when a firm adds physical capital, workers become more productive, so variable costs increase.

Accepted Answer

A) True 
 B)False

Question 9

The total product curve for the Wallmark Greeting Card Company shows how the quantity of output depends on the quantity of the variable input for a given amount of the fixed inputs.

Accepted Answer

A) True 
 B)False

Question 10

Use the following to answer questions:
Figure: The Average Total Cost Curve  
-(Figure: The Average Total Cost Curve) Look at the figure The Average Total Cost Curve. The total cost of producing five pairs of boots is approximately:

Accepted Answer

A)  $408. 
B)  $82. 
C)  $108. 
D)  $17. 
A)  $408. 
B)  $82. 
C)  $108. 
D)  $17.

Question 11

Use the following to answer questions:  
-(Table: Workers and Output) Look at the table Workers and Output. After graduation you achieve your dream of opening an art shop that specializes in selling mud statues. You pay $10 per day on a loan from your uncle, and regardless of how much you produce, you pay $10 per day to each of the workers who make the mud statues. The variable cost of producing 25 statues is:

Accepted Answer

A)  $10. 
B)  $20. 
C)  $25. 
D)  $35. 
A)  $10. 
B)  $20. 
C)  $25. 
D)  $35.

Question 12

A firm always operates at some point on its long-run average total cost curve in both the long run and the short run.

Accepted Answer

A) True 
 B)False

Question 13

Use the following to answer questions:  
-(Table: Costs of Birthday Cakes) Look at the table Costs of Birthday Cakes. Assume that fixed costs are $10. What is the average total cost of 4 cakes?

Accepted Answer

A)  $35.00 
B)  $25.00 
C)  $9.50 
D)  $12.00 
A)  $35.00 
B)  $25.00 
C)  $9.50 
D)  $12.00

Question 14

In the long run, all costs are:

Accepted Answer

A)  fixed. 
B)  constant. 
C)  variable. 
D)  marginal. 
A)  fixed. 
B)  constant. 
C)  variable. 
D)  marginal.

Question 15

Use the following to answer questions:
Figure: A Firm's Cost Curves  
-(Figure: A Firm's Cost Curves) Look at the figure A Firm's Cost Curves. The curve labeled W represents the firm's _____ cost curve.

Accepted Answer

A)  average fixed 
B)  average total 
C)  average variable 
D)  total variable 
A)  average fixed 
B)  average total 
C)  average variable 
D)  total variable

Question 16

As more labor is added to a fixed amount of capital, eventually the marginal product of labor decreases.

Accepted Answer

A) True 
 B)False

Question 17

At the long-run quantity of output, where the long-run average total cost curve is at its lowest point, it is tangent to the _____ of the corresponding short-run average total cost curve.

Accepted Answer

A)  minimum 
B)  maximum 
C)  right of the minimum 
D)  left of the minimum 
A)  minimum 
B)  maximum 
C)  right of the minimum 
D)  left of the minimum

Question 18

Use the following to answer questions:  
-(Table: Production of Cabinets) Look at the table The Production of Cabinets. After the _____ worker the firm begins to have diminishing returns to labor.

Accepted Answer

A)  first 
B)  second 
C)  third 
D)  fourth 
A)  first 
B)  second 
C)  third 
D)  fourth

Question 19

Use the following to answer questions:  
-(Table: Workers and Output) Look at the table Workers and Output. After graduation you achieve your dream of opening an art shop that specializes in selling mud statues. You pay $10 per day on a loan from your uncle, and regardless of how much you produce, you pay $10 per day to each of the workers who make the mud statues. 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 20

Use the following to answer questions:  
-(Table: Cost Data) Look at the table Cost Data. The average total cost of producing 6 purses is:

Accepted Answer

A)  $190. 
B)  $70. 
C)  $50. 
D)  $35. 
A)  $190. 
B)  $70. 
C)  $50. 
D)  $35.

Use the following to answer questions: -(Table: Cost Data) Look at the table Cost Data. The average variable cost of producing 5 purses is:

The shape of the marginal cost curve is the mirror image of the shape of the _____ curve.

In the short run, why is it believed that the total product curve increases at a decreasing rate when more labor is added to the production function?

Use the following to answer questions: Figure: The Total Product -(Figure: The Total Product) Look at the figure The Total Product. For hiring labor between zero and L₁:

Consider the statement, "When the marginal cost is rising, the average total cost must also be rising." Is this statement true or false? Explain your reasoning.

Buford Bus Manufacturing installs a new assembly line. As a result, the output per worker increases. The marginal cost of output at Buford:

In the long run, when a firm adds physical capital, workers become more productive, so variable costs increase.

The total product curve for the Wallmark Greeting Card Company shows how the quantity of output depends on the quantity of the variable input for a given amount of the fixed inputs.

Use the following to answer questions: Figure: The Average Total Cost Curve -(Figure: The Average Total Cost Curve) Look at the figure The Average Total Cost Curve. The total cost of producing five pairs of boots is approximately:

A firm always operates at some point on its long-run average total cost curve in both the long run and the short run.

Use the following to answer questions: -(Table: Costs of Birthday Cakes) Look at the table Costs of Birthday Cakes. Assume that fixed costs are $10. What is the average total cost of 4 cakes?

In the long run, all costs are:

Use the following to answer questions: Figure: A Firm's Cost Curves -(Figure: A Firm's Cost Curves) Look at the figure A Firm's Cost Curves. The curve labeled W represents the firm's _____ cost curve.

As more labor is added to a fixed amount of capital, eventually the marginal product of labor decreases.

At the long-run quantity of output, where the long-run average total cost curve is at its lowest point, it is tangent to the _____ of the corresponding short-run average total cost curve.

Use the following to answer questions: -(Table: Production of Cabinets) Look at the table The Production of Cabinets. After the _____ worker the firm begins to have diminishing returns to labor.

Use the following to answer questions: -(Table: Cost Data) Look at the table Cost Data. The average total cost of producing 6 purses is:

First Principles

Economic Models: Trade-Offs and Trade 25

Supply and Demand

Consumer and Producer Surplus

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals Firms

The Rational Consumer

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods Common Resources

The Economics of the Welfare

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Filters

Exam 11: Behind the Supply Curve: Inputs and Costs

Use the following to answer questions: -(Table: Cost Data) Look at the table Cost Data. The average variable cost of producing 5 purses is:

The shape of the marginal cost curve is the mirror image of the shape of the _____ curve.

In the short run, why is it believed that the total product curve increases at a decreasing rate when more labor is added to the production function?

Use the following to answer questions: Figure: The Total Product -(Figure: The Total Product) Look at the figure The Total Product. For hiring labor between zero and L1:

Consider the statement, "When the marginal cost is rising, the average total cost must also be rising." Is this statement true or false? Explain your reasoning.

Buford Bus Manufacturing installs a new assembly line. As a result, the output per worker increases. The marginal cost of output at Buford:

In the long run, when a firm adds physical capital, workers become more productive, so variable costs increase.

The total product curve for the Wallmark Greeting Card Company shows how the quantity of output depends on the quantity of the variable input for a given amount of the fixed inputs.

Use the following to answer questions: Figure: The Average Total Cost Curve -(Figure: The Average Total Cost Curve) Look at the figure The Average Total Cost Curve. The total cost of producing five pairs of boots is approximately:

A firm always operates at some point on its long-run average total cost curve in both the long run and the short run.

Use the following to answer questions: -(Table: Costs of Birthday Cakes) Look at the table Costs of Birthday Cakes. Assume that fixed costs are $10. What is the average total cost of 4 cakes?

In the long run, all costs are:

Use the following to answer questions: Figure: A Firm's Cost Curves -(Figure: A Firm's Cost Curves) Look at the figure A Firm's Cost Curves. The curve labeled W represents the firm's _____ cost curve.

As more labor is added to a fixed amount of capital, eventually the marginal product of labor decreases.

At the long-run quantity of output, where the long-run average total cost curve is at its lowest point, it is tangent to the _____ of the corresponding short-run average total cost curve.

Use the following to answer questions: -(Table: Production of Cabinets) Look at the table The Production of Cabinets. After the _____ worker the firm begins to have diminishing returns to labor.

Use the following to answer questions: -(Table: Cost Data) Look at the table Cost Data. The average total cost of producing 6 purses is:

First Principles

Economic Models: Trade-Offs and Trade 25

Supply and Demand

Consumer and Producer Surplus

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals Firms

The Rational Consumer

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods Common Resources

The Economics of the Welfare

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Filters

Use the following to answer questions: Figure: The Total Product -(Figure: The Total Product) Look at the figure The Total Product. For hiring labor between zero and L₁: