Question 1

The survival technique

Accepted Answer

A)  can be used to estimate short-run total variable cost functions. 
B)  is based on a technical knowledge of a firm's production function. 
C)  uses regression analysis in combination with time-series or cross-sectional data. 
D)  None of the above is correct. 
A)  can be used to estimate short-run total variable cost functions. 
B)  is based on a technical knowledge of a firm's production function. 
C)  uses regression analysis in combination with time-series or cross-sectional data. 
D)  None of the above is correct.

Question 2

Your firm has estimated the total variable cost and total fixed cost functions to be
TVC=-10Q+2Q^²,TFC=200.
 If your firm is selling the product for $300, what is the break-even output?
 At what output does the firm maximize its profits?

Accepted Answer

The answer of Your firm has estimated the total variable...

Question 3

A manager of a firm was given the following table. Compute the average fixed costs (AFC), average variable costs (AVC), average total costs (ATC) and marginal costs (MC) for indicated levels of output.
 $$\begin{array} { | l | l | l | l | l | l | l | } 
\hline \text { Output } & \begin{array} { l } 
\text { Total } \
\text { Variable } \
\text { Cost }
\end{array} & \begin{array} { l } 
\text { Total } \
\text { Cost }
\end{array} & \text { AFC } & \text { AVC } & \text { ATC } & \text { MC } \
\hline 0 & 0 & 20 & & & & \
\hline 1 & 40 & 60 & & & & \
\hline 2 & 60 & 80 & & & & \
\hline 3 & 90 & 110 & & & & \
\hline
\end{array}$$

Accepted Answer

The answer of A manager of a firm was given...

Question 4

If TC=50+10Q-12Q^²+Q^³, find total variable cost, average variable cost and marginal cost functions.
 At what level of output is the average variable cost the lowest?
 At what level of output is the marginal cost the lowest?

Accepted Answer

The answer of If TC=50+10Q-12Q^²+Q^³, find total variable cost, average...

Question 5

Oceanview Construction, Inc., has the following short-run total cost schedule:
 $$\begin{array} { l r r r r r r r r r r r } 
Q & 0 & 1 & 2 & 3 & 4 & 5 & 6 & 7 & 8 & 9 & 10 \
T C & 75 & 85 & 91 & 94 & 95 & 98 & 104 & 114 & 129 & 151 & 181
\end{array}$$ (i)What is the firm's average fixed cost when Q = 5?
(ii)What is the firm's average variable cost when Q = 4?
(iii)What is the firm's average total cost when Q = 10?
(iv)
What is the firm's marginal cost when Q = 8?
(v)
At what level of output does the firm begin to experience diminishing returns?

Accepted Answer

The answer of Oceanview Construction, Inc., has the following short-run...

Question 6

If the firm's total costs are $2,200,000 and total variable costs are $1,300,000, what are the total fixed costs?

Accepted Answer

A)  900,000 
B)  1,200,000 
C)  4,500,000 
D)  None of the above. 
A)  900,000 
B)  1,200,000 
C)  4,500,000 
D)  None of the above.

Question 7

If the output levels at which short-run marginal and average cost curves reach a minimum are listed in order from smallest to greatest, then the order would be:

Accepted Answer

A)  AVC, MC, ATC 
B)  ATC, AVC, MC 
C)  MC, AVC, ATC 
D)  AVC, ATC, MC 
A)  AVC, MC, ATC 
B)  ATC, AVC, MC 
C)  MC, AVC, ATC 
D)  AVC, ATC, MC

Question 8

The firm increased production from 200,000 to 400,000 units and the total costs increased from $5,000,000 to $7,000,000. What is the marginal cost associated with this increase in production?

Accepted Answer

A)  $1 
B)  $10 
C)  $10,000 
D)  $100,000 
A)  $1 
B)  $10 
C)  $10,000 
D)  $100,000

Question 9

What percent of corporations currently have expertise in logistics?

Accepted Answer

A)  Less than 25 percent 
B)  Between 25 percent and 50 percent 
C)  Between 50 percent and 75 percent 
D)  More than 75 percent 
A)  Less than 25 percent 
B)  Between 25 percent and 50 percent 
C)  Between 50 percent and 75 percent 
D)  More than 75 percent

Question 10

Use the following to answer questions below:
  
-Refer to the short-run per-unit cost curves graph. Which of the four curves represents average total cost?

Accepted Answer

A)  Curve A 
B)  Curve B 
C)  Curve C 
D)  Curve D 
A)  Curve A 
B)  Curve B 
C)  Curve C 
D)  Curve D

Question 11

Use the following to answer questions below:
  
-Refer to the graph of the short-run total cost and total variable cost curves. At what level of output is marginal cost increasing?

Accepted Answer

A)  1 
B)  4 
C)  8 
D)  None of the above is correct. 
A)  1 
B)  4 
C)  8 
D)  None of the above is correct.

Question 12

Firms that produce more than one type of product cannot benefit from economies of scope.

Accepted Answer

A) True 
 B)False

Question 13

If the firm's average total costs are $200 per unit and average fixed costs are $70 per unit, what are the average variable costs?

Accepted Answer

A)  $70 per unit 
B)  $90 per unit 
C)  $110 per unit 
D)  $130 per unit 
A)  $70 per unit 
B)  $90 per unit 
C)  $110 per unit 
D)  $130 per unit

Question 14

If the long-run average cost curve slopes upward over some range of output, then the firm is experiencing increasing returns to scale over that range of output.

Accepted Answer

A) True 
 B)False

Question 15

The centralized management of all functions involved in a firm's relationships with suppliers and customers is called

Accepted Answer

A)  chief executive management. 
B)  logistics. 
C)  cost-revenue control. 
D)  elasticity. 
A)  chief executive management. 
B)  logistics. 
C)  cost-revenue control. 
D)  elasticity.

Question 16

Breakeven analysis identifies the

Accepted Answer

A)  profit-maximizing level of output. 
B)  level of output where economic profit is equal to zero. 
C)  level of output where marginal revenue is equal to marginal cost. 
D)  All of the above are correct. 
A)  profit-maximizing level of output. 
B)  level of output where economic profit is equal to zero. 
C)  level of output where marginal revenue is equal to marginal cost. 
D)  All of the above are correct.

Question 17

International outsourcing can potentially expose a firm to increased risks of delay in production and quality issues.

Accepted Answer

A) True 
 B)False

Question 18

The long-run average cost curve is at a minimum at a level of output where

Accepted Answer

A)  the firm is experiencing constant returns to scale. 
B)  it is equal to long-run marginal cost. 
C)  the long-run average cost curve is tangent to the lowest point on a short-run average total cost curve. 
D)  all of the above occur. 
A)  the firm is experiencing constant returns to scale. 
B)  it is equal to long-run marginal cost. 
C)  the long-run average cost curve is tangent to the lowest point on a short-run average total cost curve. 
D)  all of the above occur.

Question 19

Sunk costs are not relevant to managerial decisions.

Accepted Answer

A) True 
 B)False

Question 20

A manager of a firm was given the following table. Compute the average fixed costs (AFC), average variable costs (AVC), average total costs (ATC) and marginal costs (MC) for indicated levels of output.
 $$\begin{array} { | l | l | l | l | l | l | l | } 
\hline \text { Output } & \begin{array} { l } 
\text { Total } \
\text { Variable } \
\text { Cost }
\end{array} & \begin{array} { l } 
\text { Total } \
\text { Cost }
\end{array} & \text { AFC } & \text { AVC } & \text { ATC } & \text { MC } \
\hline 0 & 0 & 30 & & & & \
\hline 1 & 20 & 50 & & & & \
\hline 2 & 30 & 60 & & & & \
\hline 3 & 48 & 78 & & & & \
\hline
\end{array}$$

Accepted Answer

The answer of A manager of a firm was given...

The survival technique

Your firm has estimated the total variable cost and total fixed cost functions to be TVC=-10Q+2Q^²,TFC=200. If your firm is selling the product for $300, what is the break-even output? At what output does the firm maximize its profits?

A manager of a firm was given the following table. Compute the average fixed costs (AFC), average variable costs (AVC), average total costs (ATC) and marginal costs (MC) for indicated levels of output. Output Total Variable Cost Total Cost AFC AVC ATC MC 0 0 20 1 40 60 2 60 80 3 90 110

If TC=50+10Q-12Q^²+Q^³, find total variable cost, average variable cost and marginal cost functions. At what level of output is the average variable cost the lowest? At what level of output is the marginal cost the lowest?

If the firm's total costs are $2,200,000 and total variable costs are $1,300,000, what are the total fixed costs?

If the output levels at which short-run marginal and average cost curves reach a minimum are listed in order from smallest to greatest, then the order would be:

The firm increased production from 200,000 to 400,000 units and the total costs increased from $5,000,000 to $7,000,000. What is the marginal cost associated with this increase in production?

What percent of corporations currently have expertise in logistics?

Use the following to answer questions below: -Refer to the short-run per-unit cost curves graph. Which of the four curves represents average total cost?

Use the following to answer questions below: -Refer to the graph of the short-run total cost and total variable cost curves. At what level of output is marginal cost increasing?

Firms that produce more than one type of product cannot benefit from economies of scope.

If the firm's average total costs are $200 per unit and average fixed costs are $70 per unit, what are the average variable costs?

If the long-run average cost curve slopes upward over some range of output, then the firm is experiencing increasing returns to scale over that range of output.

The centralized management of all functions involved in a firm's relationships with suppliers and customers is called

Breakeven analysis identifies the

International outsourcing can potentially expose a firm to increased risks of delay in production and quality issues.

The long-run average cost curve is at a minimum at a level of output where

Sunk costs are not relevant to managerial decisions.

A manager of a firm was given the following table. Compute the average fixed costs (AFC), average variable costs (AVC), average total costs (ATC) and marginal costs (MC) for indicated levels of output. Output Total Variable Cost Total Cost AFC AVC ATC MC 0 0 30 1 20 50 2 30 60 3 48 78

The Nature and Scope of Managerial Economics

Demand, Supply, and Equilibrium Analysis

Optimization Techniques and New Management Tools

Demand Theory

Demand Estimation

Demand Forecasting

Production Theory and Estimation

Market Structure: Perfect Competition, Monopoly, and Monopolistic Competition

Oligopoly and Firm Architecture

Game Theory and Strategic Behavior

Pricing Practices

Regulation and Antitrust: The Role of Government in the Economy

Risk Analysis

Long-Run Investment Decisions: Capital Budgeting

Filters

Exam 8: Cost Theory and Estimation

The survival technique

Your firm has estimated the total variable cost and total fixed cost functions to be TVC=-10Q+2Q^²,TFC=200. If your firm is selling the product for $300, what is the break-even output? At what output does the firm maximize its profits?

A manager of a firm was given the following table. Compute the average fixed costs (AFC), average variable costs (AVC), average total costs (ATC) and marginal costs (MC) for indicated levels of output. Output Total Variable Cost Total Cost AFC AVC ATC MC 0 0 20 1 40 60 2 60 80 3 90 110

If TC=50+10Q-12Q^²+Q^³, find total variable cost, average variable cost and marginal cost functions. At what level of output is the average variable cost the lowest? At what level of output is the marginal cost the lowest?

If the firm's total costs are $2,200,000 and total variable costs are $1,300,000, what are the total fixed costs?

If the output levels at which short-run marginal and average cost curves reach a minimum are listed in order from smallest to greatest, then the order would be:

The firm increased production from 200,000 to 400,000 units and the total costs increased from $5,000,000 to $7,000,000. What is the marginal cost associated with this increase in production?

What percent of corporations currently have expertise in logistics?

Use the following to answer questions below: -Refer to the short-run per-unit cost curves graph. Which of the four curves represents average total cost?

Use the following to answer questions below: -Refer to the graph of the short-run total cost and total variable cost curves. At what level of output is marginal cost increasing?

Firms that produce more than one type of product cannot benefit from economies of scope.

If the firm's average total costs are $200 per unit and average fixed costs are $70 per unit, what are the average variable costs?

If the long-run average cost curve slopes upward over some range of output, then the firm is experiencing increasing returns to scale over that range of output.

The centralized management of all functions involved in a firm's relationships with suppliers and customers is called

Breakeven analysis identifies the

International outsourcing can potentially expose a firm to increased risks of delay in production and quality issues.

The long-run average cost curve is at a minimum at a level of output where

Sunk costs are not relevant to managerial decisions.

A manager of a firm was given the following table. Compute the average fixed costs (AFC), average variable costs (AVC), average total costs (ATC) and marginal costs (MC) for indicated levels of output. Output Total Variable Cost Total Cost AFC AVC ATC MC 0 0 30 1 20 50 2 30 60 3 48 78

The Nature and Scope of Managerial Economics

Demand, Supply, and Equilibrium Analysis

Optimization Techniques and New Management Tools

Demand Theory

Demand Estimation

Demand Forecasting

Production Theory and Estimation

Market Structure: Perfect Competition, Monopoly, and Monopolistic Competition

Oligopoly and Firm Architecture

Game Theory and Strategic Behavior

Pricing Practices

Regulation and Antitrust: The Role of Government in the Economy

Risk Analysis

Long-Run Investment Decisions: Capital Budgeting

Filters