Question 1

Use the following to answer questions:  
-(Table: Output and Costs) Look at the table Output and Costs. When output is 3, average total cost equals:

Accepted Answer

A)  $13. 
B)  $10. 
C)  $8. 
D)  $17. 
A)  $13. 
B)  $10. 
C)  $8. 
D)  $17.

Question 2

Use the following to answer questions:  
-(Table: Tonya's Production Function for Apples) Look at the table Tonya's Production Function for Apples. 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 3

Use the following to answer questions:  
-(Table: Cost Data) Look at the table Cost Data. The marginal cost of producing the fifth purse is:

Accepted Answer

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

Question 4

A fixed input is one:

Accepted Answer

A)  that exists in nature, and there is only so much of it. 
B)  that can be used for one thing only. 
C)  that can never produce more or less in any period. 
D)  whose quantity cannot be changed in the short run. 
A)  that exists in nature, and there is only so much of it. 
B)  that can be used for one thing only. 
C)  that can never produce more or less in any period. 
D)  whose quantity cannot be changed in the short run.

Question 5

If the marginal cost of producing the seventh sports jersey is $21, then the total cost of seven sports jerseys is:

Accepted Answer

A)  $21. 
B)  $60. 
C)  $147. 
D)  The answer cannot be determined from the information provided. 
A)  $21. 
B)  $60. 
C)  $147. 
D)  The answer cannot be determined from the information provided.

Question 6

When a fine caterer produces 30 catered meals, its marginal cost and average variable cost each equal $10. Therefore, assuming normally shaped cost curves, at 29 meals its marginal cost is _____ $10 and its average variable cost is _____ $10.

Accepted Answer

A)  more than; less than 
B)  less than; more than 
C)  more than; more than 
D)  equal to; equal to 
A)  more than; less than 
B)  less than; more than 
C)  more than; more than 
D)  equal to; equal to

Question 7

Use the following to answer questions:
Figure: Short-Run Costs II  
-(Figure: Short-Run Costs II) Look at the figure Short-Run Costs II. At 6 units of output, average variable cost is approximately:

Accepted Answer

A)  $100. 
B)  $120. 
C)  $200. 
D)  $250. 
A)  $100. 
B)  $120. 
C)  $200. 
D)  $250.

Question 8

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 two mixers and bakes 100 cakes per day, what is her average total cost?

Accepted Answer

A)  $8 
B)  $10 
C)  $15 
D)  $22 
A)  $8 
B)  $10 
C)  $15 
D)  $22

Question 9

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 three mixers and bakes 100 cakes per day, what is her average total cost?

Accepted Answer

A)  $4 
B)  $25 
C)  $29 
D)  $625 
A)  $4 
B)  $25 
C)  $29 
D)  $625

Question 10

When a cherry orchard in Oregon adds a worker, the total cost of production increases by $24,000. Adding the worker increases total cherry output by 600 pounds. Therefore, the marginal cost of the last pound of cherries produced is:

Accepted Answer

A)  $40. 
B)  $19. 
C)  $4,000. 
D)  $24,000. 
A)  $40. 
B)  $19. 
C)  $4,000. 
D)  $24,000.

Question 11

You run a business producing picture frames. This month your total cost of production is $10,000, your variable cost of production is $6,000, and you produce 3,000 picture frames. It follows that average _____ cost is _____.

Accepted Answer

A)  variable; $2 
B)  total; $3 
C)  total; $1 
D)  fixed; $1 
A)  variable; $2 
B)  total; $3 
C)  total; $1 
D)  fixed; $1

Question 12

In some complex production processes, such as nuclear power plants, some inputs have to be treated as being fixed even in the long run.

Accepted Answer

A) True 
 B)False

Question 13

Use the following to answer questions:  
-(Table: Costs of Producing Bagels) Look at the table Cost of Producing Bagels. The marginal cost of producing the second bagel is:

Accepted Answer

A)  $0.05. 
B)  $0.10. 
C)  $0.30. 
D)  $0.40. 
A)  $0.05. 
B)  $0.10. 
C)  $0.30. 
D)  $0.40.

Question 14

Suppose Cyd knows the average total cost of producing 9 scones is $5, while the average total cost of producing 10 scones is $5.20. What is the marginal cost of the tenth scone?

Accepted Answer

A)  $7.00 
B)  $5.20 
C)  $0.20 
D)  $5.00 
A)  $7.00 
B)  $5.20 
C)  $0.20 
D)  $5.00

Question 15

Diminishing marginal returns means that:

Accepted Answer

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

Question 16

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. If the price of inputs is unchanged, 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 17

Use the following to answer questions:
Figure: Short-Run Costs II  
-(Figure: Short-Run Costs II) Look at the figure Short-Run Costs II. Curve 1 crosses the average variable cost curve at:

Accepted Answer

A)  3 units of output. 
B)  approximately 5.3 units of output. 
C)  the minimum value of curve 2. 
D)  the level of output at which diminishing marginal returns begin. 
A)  3 units of output. 
B)  approximately 5.3 units of output. 
C)  the minimum value of curve 2. 
D)  the level of output at which diminishing marginal returns begin.

Question 18

The marginal cost curve intersects the average variable cost curve at:

Accepted Answer

A)  its lowest point. 
B)  its maximum. 
C)  its end point. 
D)  no point; the curves don't intersect. 
A)  its lowest point. 
B)  its maximum. 
C)  its end point. 
D)  no point; the curves don't intersect.

Question 19

Some people say, "There are too many cooks in the kitchen," to describe any chaotic scene where nothing gets done. Relate this phrase to short-run production functions.

Accepted Answer

The idea is that for a while you can add

Question 20

Use the following to answer questions:
Figure: Short-Run Costs II  
-(Figure: Short-Run Costs II) Look at the figure Short-Run Costs II. Curve 2 is the _____ cost curve.

Accepted Answer

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

Use the following to answer questions: -(Table: Output and Costs) Look at the table Output and Costs. When output is 3, average total cost equals:

Use the following to answer questions: -(Table: Tonya's Production Function for Apples) Look at the table Tonya's Production Function for Apples. Tonya is operating:

Use the following to answer questions: -(Table: Cost Data) Look at the table Cost Data. The marginal cost of producing the fifth purse is:

A fixed input is one:

If the marginal cost of producing the seventh sports jersey is $21, then the total cost of seven sports jerseys is:

When a fine caterer produces 30 catered meals, its marginal cost and average variable cost each equal $10. Therefore, assuming normally shaped cost curves, at 29 meals its marginal cost is _ $10 and its average variable cost is _ $10.

Use the following to answer questions: Figure: Short-Run Costs II -(Figure: Short-Run Costs II) Look at the figure Short-Run Costs II. At 6 units of output, average variable cost is approximately:

When a cherry orchard in Oregon adds a worker, the total cost of production increases by $24,000. Adding the worker increases total cherry output by 600 pounds. Therefore, the marginal cost of the last pound of cherries produced is:

You run a business producing picture frames. This month your total cost of production is $10,000, your variable cost of production is $6,000, and you produce 3,000 picture frames. It follows that average _ cost is _.

In some complex production processes, such as nuclear power plants, some inputs have to be treated as being fixed even in the long run.

Use the following to answer questions: -(Table: Costs of Producing Bagels) Look at the table Cost of Producing Bagels. The marginal cost of producing the second bagel is:

Suppose Cyd knows the average total cost of producing 9 scones is $5, while the average total cost of producing 10 scones is $5.20. What is the marginal cost of the tenth scone?

Diminishing marginal returns means that:

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. If the price of inputs is unchanged, this means that Buffalo Aircraft is operating with:

Use the following to answer questions: Figure: Short-Run Costs II -(Figure: Short-Run Costs II) Look at the figure Short-Run Costs II. Curve 1 crosses the average variable cost curve at:

The marginal cost curve intersects the average variable cost curve at:

Some people say, "There are too many cooks in the kitchen," to describe any chaotic scene where nothing gets done. Relate this phrase to short-run production functions.

Use the following to answer questions: Figure: Short-Run Costs II -(Figure: Short-Run Costs II) Look at the figure Short-Run Costs II. Curve 2 is the _____ cost curve.

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: Output and Costs) Look at the table Output and Costs. When output is 3, average total cost equals:

Use the following to answer questions: -(Table: Tonya's Production Function for Apples) Look at the table Tonya's Production Function for Apples. Tonya is operating:

Use the following to answer questions: -(Table: Cost Data) Look at the table Cost Data. The marginal cost of producing the fifth purse is:

A fixed input is one:

If the marginal cost of producing the seventh sports jersey is $21, then the total cost of seven sports jerseys is:

When a fine caterer produces 30 catered meals, its marginal cost and average variable cost each equal $10. Therefore, assuming normally shaped cost curves, at 29 meals its marginal cost is _____ $10 and its average variable cost is _____ $10.

Use the following to answer questions: Figure: Short-Run Costs II -(Figure: Short-Run Costs II) Look at the figure Short-Run Costs II. At 6 units of output, average variable cost is approximately:

When a cherry orchard in Oregon adds a worker, the total cost of production increases by $24,000. Adding the worker increases total cherry output by 600 pounds. Therefore, the marginal cost of the last pound of cherries produced is:

You run a business producing picture frames. This month your total cost of production is $10,000, your variable cost of production is $6,000, and you produce 3,000 picture frames. It follows that average _____ cost is _____.

In some complex production processes, such as nuclear power plants, some inputs have to be treated as being fixed even in the long run.

Use the following to answer questions: -(Table: Costs of Producing Bagels) Look at the table Cost of Producing Bagels. The marginal cost of producing the second bagel is:

Suppose Cyd knows the average total cost of producing 9 scones is $5, while the average total cost of producing 10 scones is $5.20. What is the marginal cost of the tenth scone?

Diminishing marginal returns means that:

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. If the price of inputs is unchanged, this means that Buffalo Aircraft is operating with:

Use the following to answer questions: Figure: Short-Run Costs II -(Figure: Short-Run Costs II) Look at the figure Short-Run Costs II. Curve 1 crosses the average variable cost curve at:

The marginal cost curve intersects the average variable cost curve at:

Some people say, "There are too many cooks in the kitchen," to describe any chaotic scene where nothing gets done. Relate this phrase to short-run production functions.

Use the following to answer questions: Figure: Short-Run Costs II -(Figure: Short-Run Costs II) Look at the figure Short-Run Costs II. Curve 2 is the _____ cost curve.

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

When a fine caterer produces 30 catered meals, its marginal cost and average variable cost each equal $10. Therefore, assuming normally shaped cost curves, at 29 meals its marginal cost is _ $10 and its average variable cost is _ $10.

You run a business producing picture frames. This month your total cost of production is $10,000, your variable cost of production is $6,000, and you produce 3,000 picture frames. It follows that average _ cost is _.