Question 1

Jefferson's Cleaners
  
-Using the above table, when Jefferson's Cleaners hires three workers

Accepted Answer

A)  the average product of labor is greater than the marginal product. 
B)  the marginal product of labor is greater than the average product. 
C)  it has already experienced diminishing marginal returns. 
D)  Both answers A and C are correct. 
A)  the average product of labor is greater than the marginal product. 
B)  the marginal product of labor is greater than the average product. 
C)  it has already experienced diminishing marginal returns. 
D)  Both answers A and C are correct.

Question 2

-The table above gives the cost of producing T-shirts. The total fixed cost is ________ and the marginal cost of increasing production from 5 to 6 T shirts is ________.

Accepted Answer

A)  $20; $6 
B)  $20; $10 
C)  $10.40; $8 
D)  unable to be determined; $8 
A)  $20; $6 
B)  $20; $10 
C)  $10.40; $8 
D)  unable to be determined; $8

Question 3

-The first table above has the total product schedule for an imaginary good called a widget. Each unit of labor costs $25 and the total cost of capital is $100.
a) Use this information to complete the remaining two tables. In the tables, TFC is the total fixed cost, TVC is the total variable cost, TC is the total cost, AFC is the average fixed cost, AVC is the average variable cost, ATC is the average total cost, and MC is the marginal cost.
     b) Suppose that labor becomes twice as expensive (so that one unit of labor now costs $50) but nothing else changes. Complete the above tables with the new cost schedules. If you plotted the cost curves, how would the increased wage rate affect the cost curves?

Accepted Answer

@#IMG-DLM& @#IMG-DLM& a) The completed tables are above. All

Question 4

If marginal cost is less than average total cost, then ________ is ________.

Accepted Answer

A)  average total cost; falling 
B)  average variable cost; falling 
C)  marginal cost; falling 
D)  marginal cost; rising 
A)  average total cost; falling 
B)  average variable cost; falling 
C)  marginal cost; falling 
D)  marginal cost; rising

Question 5

The term "fixed cost" refers to the cost a firm incurs to produce a specific fixed quantity of output.

Accepted Answer

A) True 
 B)False

Question 6

Angel Rodriguez pulls up in his 24-foot panel truck in front of Sezz Medi Brick Oven Pizza in Upper Manhattan. Even though it's the middle of the summer, he's delivering- firewood. He says even though fuel costs have doubled in the past year, it's still worth the premium he gets delivering ash and cherry to the captive and growing market in NYC. How would a decrease in gasoline prices affect Angel's short run costs?

Accepted Answer

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

Question 7

-In the above table, between what two levels of output does one first observe the law of diminishing returns?

Accepted Answer

A)  0 and 1000 
B)  1000 and 3000 
C)  3000 and 4000 
D)  4000 and 4500 
A)  0 and 1000 
B)  1000 and 3000 
C)  3000 and 4000 
D)  4000 and 4500

Question 8

-In the above figure, the total fixed cost curve is curve

Accepted Answer

A)  A. 
B)  B. 
C)  C. 
D)  none of the curves in the figure. 
A)  A. 
B)  B. 
C)  C. 
D)  none of the curves in the figure.

Question 9

Ernie's Earmuffs produces 200 earmuffs per year at a total cost of $2,000 and $400 of this cost is fixed. If he increases output to 220 earmuffs, his total cost increases to $2100, and his fixed cost remains $400. What is Ernie's marginal cost per earmuff?

Accepted Answer

A)  $105 
B)  $35 
C)  $9.55 
D)  $5 
A)  $105 
B)  $35 
C)  $9.55 
D)  $5

Question 10

-In the figure above, when 40 units are produced the average fixed cost is

Accepted Answer

A)  $4. 
B)  $8. 
C)  $12. 
D)  $20. 
A)  $4. 
B)  $8. 
C)  $12. 
D)  $20.

Question 11

-Based on the production data for Pat's Pizza Parlor in the above table, the marginal product of the 4th worker is ________ pizzas.

Accepted Answer

A)  5 
B)  8 
C)  10 
D)  45 
A)  5 
B)  8 
C)  10 
D)  45

Question 12

The average product of labor exceeds the marginal product of labor

Accepted Answer

A)  when the average product of labor is falling. 
B)  when the average product of labor is rising. 
C)  when the marginal product of labor is at its maximum. 
D)  when the average product of labor is at its maximum. 
A)  when the average product of labor is falling. 
B)  when the average product of labor is rising. 
C)  when the marginal product of labor is at its maximum. 
D)  when the average product of labor is at its maximum.

Question 13

-The table above gives a firm's total product schedule. Suppose labor is the only variable factor of production. The price of labor is $500 per week and total fixed costs are $600 per week. What is the total cost of producing 70 units?

Accepted Answer

A)  $1,700 
B)  $1,900 
C)  $2,100 
D)  $2,300 
A)  $1,700 
B)  $1,900 
C)  $2,100 
D)  $2,300

Question 14

If marginal cost is less than average variable cost and output increases, average total cost ________ and average variable cost ________.

Accepted Answer

A)  increases; increases 
B)  decreases; decreases 
C)  decreases; increases 
D)  increases; decreases 
A)  increases; increases 
B)  decreases; decreases 
C)  decreases; increases 
D)  increases; decreases

Question 15

-In the above table, what is marginal product of labor for the 2nd worker?

Accepted Answer

A)  20 
B)  8 
C)  10 
D)  12 
A)  20 
B)  8 
C)  10 
D)  12

Question 16

Which of the following shifts the AVC curve upward at Barney's Bagel Bakery?

Accepted Answer

A)  an increase in the hourly wage that Barney pays his workers 
B)  a decrease in the hourly wage that Barney pays his workers 
C)  an increase in the fixed amount of liability insurance premiums that Barney pays for his business 
D)  Both answers A and C are correct. 
A)  an increase in the hourly wage that Barney pays his workers 
B)  a decrease in the hourly wage that Barney pays his workers 
C)  an increase in the fixed amount of liability insurance premiums that Barney pays for his business 
D)  Both answers A and C are correct.

Question 17

-This month, the local widget factory produced 100 widgets. The total variable cost of production was $500 and the average total cost of production was $8.
a) What is the total cost?
b) What is the total fixed cost?
c) What is the average fixed cost?
d) What is the average variable cost?

Accepted Answer

a) Total cost can be calculated as avera

Question 18

Angel Rodriguez pulls up in his 24-foot panel truck in front of Sezz Medi Brick Oven Pizza in Upper Manhattan. Even though it's the middle of the summer, he's delivering- firewood. He says even though fuel costs have doubled in the past year, it's still worth the premium he gets delivering ash and cherry to the captive and growing market in NYC. How does the doubling of fuel costs affect Angel's short run costs?

Accepted Answer

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

Question 19

Angel Rodriguez pulls up in his 24-foot panel truck in front of Sezz Medi Brick Oven Pizza in Upper Manhattan. Even though it's the middle of the summer, he's delivering- firewood. He says even though fuel costs have doubled in the past year, it's still worth the premium he gets delivering ash and cherry to the captive and growing market in NYC. How would an increase in Angel's salary affect short run costs?

Accepted Answer

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

Question 20

-Dustin's copy shop can use four alternative plants. The figure above shows the average total cost curves for Plant 1 (ATC1), Plant 2 (ATC2), Plant 3 (ATC3), and Plant 4 (ATC4). Dustin's Plant 2 will be economically efficient if the firm produces

Accepted Answer

A)  2,000 copies per day. 
B)  4,800 copies per day. 
C)  5,300 copies per day. 
D)  6,000 copies per day. 
A)  2,000 copies per day. 
B)  4,800 copies per day. 
C)  5,300 copies per day. 
D)  6,000 copies per day.

Jefferson's Cleaners -Using the above table, when Jefferson's Cleaners hires three workers

-The table above gives the cost of producing T-shirts. The total fixed cost is and the marginal cost of increasing production from 5 to 6 T shirts is .

If marginal cost is less than average total cost, then is .

The term "fixed cost" refers to the cost a firm incurs to produce a specific fixed quantity of output.

-In the above table, between what two levels of output does one first observe the law of diminishing returns?

-In the above figure, the total fixed cost curve is curve

Ernie's Earmuffs produces 200 earmuffs per year at a total cost of $2,000 and $400 of this cost is fixed. If he increases output to 220 earmuffs, his total cost increases to $2100, and his fixed cost remains $400. What is Ernie's marginal cost per earmuff?

-In the figure above, when 40 units are produced the average fixed cost is

-Based on the production data for Pat's Pizza Parlor in the above table, the marginal product of the 4th worker is ________ pizzas.

The average product of labor exceeds the marginal product of labor

-The table above gives a firm's total product schedule. Suppose labor is the only variable factor of production. The price of labor is $500 per week and total fixed costs are $600 per week. What is the total cost of producing 70 units?

If marginal cost is less than average variable cost and output increases, average total cost and average variable cost .

-In the above table, what is marginal product of labor for the 2nd worker?

Which of the following shifts the AVC curve upward at Barney's Bagel Bakery?

-This month, the local widget factory produced 100 widgets. The total variable cost of production was $500 and the average total cost of production was $8. a) What is the total cost? b) What is the total fixed cost? c) What is the average fixed cost? d) What is the average variable cost?

-Dustin's copy shop can use four alternative plants. The figure above shows the average total cost curves for Plant 1 (ATC₁), Plant 2 (ATC₂), Plant 3 (ATC₃), and Plant 4 (ATC₄). Dustin's Plant 2 will be economically efficient if the firm produces

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Organizing Production

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Exam 11: Output and Costs

Jefferson's Cleaners -Using the above table, when Jefferson's Cleaners hires three workers

-The table above gives the cost of producing T-shirts. The total fixed cost is ________ and the marginal cost of increasing production from 5 to 6 T shirts is ________.

If marginal cost is less than average total cost, then ________ is ________.

The term "fixed cost" refers to the cost a firm incurs to produce a specific fixed quantity of output.

-In the above table, between what two levels of output does one first observe the law of diminishing returns?

-In the above figure, the total fixed cost curve is curve

Ernie's Earmuffs produces 200 earmuffs per year at a total cost of $2,000 and $400 of this cost is fixed. If he increases output to 220 earmuffs, his total cost increases to $2100, and his fixed cost remains $400. What is Ernie's marginal cost per earmuff?

-In the figure above, when 40 units are produced the average fixed cost is

-Based on the production data for Pat's Pizza Parlor in the above table, the marginal product of the 4th worker is ________ pizzas.

The average product of labor exceeds the marginal product of labor

-The table above gives a firm's total product schedule. Suppose labor is the only variable factor of production. The price of labor is $500 per week and total fixed costs are $600 per week. What is the total cost of producing 70 units?

If marginal cost is less than average variable cost and output increases, average total cost ________ and average variable cost ________.

-In the above table, what is marginal product of labor for the 2nd worker?

Which of the following shifts the AVC curve upward at Barney's Bagel Bakery?

-This month, the local widget factory produced 100 widgets. The total variable cost of production was $500 and the average total cost of production was $8. a) What is the total cost? b) What is the total fixed cost? c) What is the average fixed cost? d) What is the average variable cost?

-Dustin's copy shop can use four alternative plants. The figure above shows the average total cost curves for Plant 1 (ATC1), Plant 2 (ATC2), Plant 3 (ATC3), and Plant 4 (ATC4). Dustin's Plant 2 will be economically efficient if the firm produces

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Organizing Production

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

-The table above gives the cost of producing T-shirts. The total fixed cost is and the marginal cost of increasing production from 5 to 6 T shirts is .

If marginal cost is less than average total cost, then is .

If marginal cost is less than average variable cost and output increases, average total cost and average variable cost .

-Dustin's copy shop can use four alternative plants. The figure above shows the average total cost curves for Plant 1 (ATC₁), Plant 2 (ATC₂), Plant 3 (ATC₃), and Plant 4 (ATC₄). Dustin's Plant 2 will be economically efficient if the firm produces