Question 1

​Marginal cost

Accepted Answer

A) ​Is the incremental cost incurred by producing an additional unit of output. 
B) Is the total cost of production. 
C) Is the total fixed cost of production. 
D) ​None of the above 
A) ​Is the incremental cost incurred by producing an additional unit of output. 
B) Is the total cost of production. 
C) Is the total fixed cost of production. 
D) ​None of the above A

Question 2

​Food Fanatics caters meals where their cost of producing an extra meal is $25.Each of their meals is standard and sells for $20.At this rate what should the company do?

Accepted Answer

A) ​Produce more meals and increase their profit 
B) Produce fewer meals and increase their profit 
C) Not change production 
D) ​None of the above 
A) ​Produce more meals and increase their profit 
B) Produce fewer meals and increase their profit 
C) Not change production 
D) ​None of the above B

Question 3

A firm produces 1000 units per week.It hires 10 full-time workers (40 hours/week each)at an hourly wage of $20.Raw materials costs $5 per unit. Rent for the factory is $1,500 per week.What are the overall costs for the week?

Accepted Answer

A) ​total variable cost is $5,000;total fixed cost is $1,500;total cost is $6,500 
B) total variable cost is $5,000;total fixed cost is $9,500;total cost is $14,500 
C) total variable cost is $13,000;total fixed cost is $1,500;total cost is $14,500 
D) ​total variable cost is $13,000;total fixed cost is $9,500;total cost is $22,500 
A) ​total variable cost is $5,000;total fixed cost is $1,500;total cost is $6,500 
B) total variable cost is $5,000;total fixed cost is $9,500;total cost is $14,500 
C) total variable cost is $13,000;total fixed cost is $1,500;total cost is $14,500 
D) ​total variable cost is $13,000;total fixed cost is $9,500;total cost is $22,500 C

Question 4

Use the following to answer question
  
-​If hiring the 6th worker increases total product by 7 units and the price of each unit is $2,

Accepted Answer

A) the firm should not hire the 6th worker as MRMC D) the firm should not hire the 6th worker as MRMC D) the firm should not hire the 6th worker as MR

Question 5

​According to the law of diminishing returns

Accepted Answer

A) ​Production increases at a decreasing rate 
B) Production increases at a increasing rate 
C) Production decreases at a decreasing rate 
D) ​Production decreases at an increasing rate 
A) ​Production increases at a decreasing rate 
B) Production increases at a increasing rate 
C) Production decreases at a decreasing rate 
D) ​Production decreases at an increasing rate

Question 6

​Cruise liners offer last minute deals because

Accepted Answer

A) ​The marginal cost is higher than the marginal revenue since fixed costs are sunk 
B) The marginal costs of an additional passenger are very low at that point and companies gain by lowering prices 
C) The average cost of an additional passenger is very low at that point and companies gain by lowering prices 
D) ​All of the above 
A) ​The marginal cost is higher than the marginal revenue since fixed costs are sunk 
B) The marginal costs of an additional passenger are very low at that point and companies gain by lowering prices 
C) The average cost of an additional passenger is very low at that point and companies gain by lowering prices 
D) ​All of the above

Question 7

​Jim's Burgers produces 500 burgers per week.He can sell as many burgers as he can cook for $3.What is the marginal revenue from selling the 50th burger?

Accepted Answer

A) ​$3 
B) $150 
C) $147 
D) ​It cannot be determined with the information given 
A) ​$3 
B) $150 
C) $147 
D) ​It cannot be determined with the information given

Question 8

Use the following table to answer question
  
-How many units should the profit maximizing firm produce?​

Accepted Answer

A) ​1 
B) 2 
C) 3 
D) ​4 
A) ​1 
B) 2 
C) 3 
D) ​4

Question 9

​If Marginal cost is lower than Average Cost (AC),average cost is

Accepted Answer

A) ​falling 
B) rising 
C) constant 
D) ​none of the above 
A) ​falling 
B) rising 
C) constant 
D) ​none of the above

Question 10

​Marginal revenue is_____________.

Accepted Answer

A) ​The cost of producing an additional unit of output 
B) The total revenue gained from production 
C) The revenue from selling an additional unit of output 
D) ​none of the above 
A) ​The cost of producing an additional unit of output 
B) The total revenue gained from production 
C) The revenue from selling an additional unit of output 
D) ​none of the above

Question 11

A widget producer is deciding whether to compensate widget makers on a salary basis or a per unit basis.Given that it is difficult to monitor shirking,which of these pay schedules would provide stronger performance incentives?​

Accepted Answer

A) ​Per piece compensation 
B) Salary 
C) Both of them 
D) ​Neither of them 
A) ​Per piece compensation 
B) Salary 
C) Both of them 
D) ​Neither of them

Question 12

Use the following to answer question
  
-The marginal cost of hiring the 4th worker is​

Accepted Answer

A) ​$40 
B) $100 
C) $20 
D) ​$0 
A) ​$40 
B) $100 
C) $20 
D) ​$0

Question 13

​Food Fanatics caters meals where their cost for producing an extra meal is $20.Each of their meals is standard and sells for $25.At this rate what should the company do?

Accepted Answer

A) ​Produce more meals and increase their profit 
B) Produce fewer meals and increase their profit 
C) Not change production 
D) ​None of the above 
A) ​Produce more meals and increase their profit 
B) Produce fewer meals and increase their profit 
C) Not change production 
D) ​None of the above

Question 14

Harvey's Hardware is thinking about starting a line of lawnmowers to serve its customer base in the summer.The lawnmowers would be priced at $100 and Harvey the manager believes that they would sell 3 units.They have the following estimated costs.Use this information for question
  
-​What is the average cost of producing three units?

Accepted Answer

A) ​$200 
B) $100 
C) $50 
D) ​$70 
A) ​$200 
B) $100 
C) $50 
D) ​$70

Question 15

​Lemonade anyone? II
Raymond decides to set up a lemonade stand every weekend for the next four weeks to save up for the latest x-men comic.He has to pay his brother Robert $10 as a one time payment for him to not bully Raymond or drive his customers away.The lemons and sugar cost him $10 (the water is free)and his dad offers to set up his stall for him.He ends up making $15 his first weekend.Frank,his father notices this and advises Raymond to shutdown the stall,while Marie his mother advises him not only to set up the stall next weekend but to increase production even more.Raymond is extremely confused.Who do you think he should listen to?

Accepted Answer

In this case,his mother is right,he is a

Question 16

Use the following to answer question
  
-​If the firm hires 5 workers,and produces 10 units,the average cost equals

Accepted Answer

A) ​$250 
B) $25 
C) $5 
D) ​Need more information 
A) ​$250 
B) $25 
C) $5 
D) ​Need more information

Question 17

​Marginal cost is ____________.

Accepted Answer

A) The cost of producing an additional unit of output 
B)  
The total cost of production 
C)  
The revenue from selling an additional unit of output 
D) none of the above 
A) The cost of producing an additional unit of output 
B)  
The total cost of production 
C)  
The revenue from selling an additional unit of output 
D) none of the above

Question 18

Total costs increase from $1,500 to $1,800 when a firm increases output from 40 to 50 units..Which of the following are true?​

Accepted Answer

A) ​AC rise by $1.50 
B) AC rise by $1.00 
C) AC fall by $1.50 
D) ​AC fall by $1.00 
A) ​AC rise by $1.50 
B) AC rise by $1.00 
C) AC fall by $1.50 
D) ​AC fall by $1.00

Question 19

Marginal cost typically ________ and marginal revenue typically _________ with increasing output.​

Accepted Answer

A) ​rises;falls 
B) falls;rises 
C) rises;rises 
D) ​falls;falls 
A) ​rises;falls 
B) falls;rises 
C) rises;rises 
D) ​falls;falls

Question 20

Harvey's Hardware is thinking about starting a line of lawnmowers to serve its customer base in the summer.The lawnmowers would be priced at $100 and Harvey the manager believes that they would sell 3 units.They have the following estimated costs.Use this information for question
  
-What is the marginal cost of producing the third unit?​

Accepted Answer

A) ​$100 
B) $200 
C) $300 
D) ​$400 
A) ​$100 
B) $200 
C) $300 
D) ​$400

Marginal cost

Food Fanatics caters meals where their cost of producing an extra meal is $25.Each of their meals is standard and sells for $20.At this rate what should the company do?

A firm produces 1000 units per week.It hires 10 full-time workers (40 hours/week each)at an hourly wage of $20.Raw materials costs $5 per unit. Rent for the factory is $1,500 per week.What are the overall costs for the week?

Use the following to answer question -If hiring the 6th worker increases total product by 7 units and the price of each unit is $2,

According to the law of diminishing returns

Cruise liners offer last minute deals because

Jim's Burgers produces 500 burgers per week.He can sell as many burgers as he can cook for $3.What is the marginal revenue from selling the 50th burger?

Use the following table to answer question -How many units should the profit maximizing firm produce?

If Marginal cost is lower than Average Cost (AC),average cost is

Marginal revenue is_____________.

A widget producer is deciding whether to compensate widget makers on a salary basis or a per unit basis.Given that it is difficult to monitor shirking,which of these pay schedules would provide stronger performance incentives?

Use the following to answer question -The marginal cost of hiring the 4th worker is

Food Fanatics caters meals where their cost for producing an extra meal is $20.Each of their meals is standard and sells for $25.At this rate what should the company do?

Use the following to answer question -If the firm hires 5 workers,and produces 10 units,the average cost equals

Marginal cost is ____________.

Total costs increase from $1,500 to $1,800 when a firm increases output from 40 to 50 units..Which of the following are true?

Marginal cost typically and marginal revenue typically _ with increasing output.

The One Lessor of Business

Benefits, Costs, and Decisions

Investment Decisions: Look Ahead and Reason Back

Simple Pricing

Economies of Scale and Scope

Understanding Markets and Industry Changes

Market Structure and Long Run Equilibrium

Strategy: the Quest to Keep Profit From Eroding

Foreign Exchange, Trade, and Bubbles

More Realistic and Complex Pricing

Direct Price Discrimination

Strategic Games

Bargaining

Making Decisions With Uncertainty

Auctions

The Problem of Adverse Selection

The Problem of Moral Hazard

Getting Employees to Work in the Firms Best Interest

Getting Divisions to Work in the Firms Best Interest

Managing Vertical Relationships

Filters

Exam 3: Extent How Much Decisions

​Marginal cost

​Food Fanatics caters meals where their cost of producing an extra meal is $25.Each of their meals is standard and sells for $20.At this rate what should the company do?

A firm produces 1000 units per week.It hires 10 full-time workers (40 hours/week each)at an hourly wage of $20.Raw materials costs $5 per unit. Rent for the factory is $1,500 per week.What are the overall costs for the week?

Use the following to answer question -​If hiring the 6th worker increases total product by 7 units and the price of each unit is $2,

​According to the law of diminishing returns

​Cruise liners offer last minute deals because

​Jim's Burgers produces 500 burgers per week.He can sell as many burgers as he can cook for $3.What is the marginal revenue from selling the 50th burger?

Use the following table to answer question -How many units should the profit maximizing firm produce?​

​If Marginal cost is lower than Average Cost (AC),average cost is

​Marginal revenue is_____________.

A widget producer is deciding whether to compensate widget makers on a salary basis or a per unit basis.Given that it is difficult to monitor shirking,which of these pay schedules would provide stronger performance incentives?​

Use the following to answer question -The marginal cost of hiring the 4th worker is​

​Food Fanatics caters meals where their cost for producing an extra meal is $20.Each of their meals is standard and sells for $25.At this rate what should the company do?

Use the following to answer question -​If the firm hires 5 workers,and produces 10 units,the average cost equals

​Marginal cost is ____________.

Total costs increase from $1,500 to $1,800 when a firm increases output from 40 to 50 units..Which of the following are true?​

Marginal cost typically ________ and marginal revenue typically _________ with increasing output.​

The One Lessor of Business

Benefits, Costs, and Decisions

Investment Decisions: Look Ahead and Reason Back

Simple Pricing

Economies of Scale and Scope

Understanding Markets and Industry Changes

Market Structure and Long Run Equilibrium

Strategy: the Quest to Keep Profit From Eroding

Foreign Exchange, Trade, and Bubbles

More Realistic and Complex Pricing

Direct Price Discrimination

Strategic Games

Bargaining

Making Decisions With Uncertainty

Auctions

The Problem of Adverse Selection

The Problem of Moral Hazard

Getting Employees to Work in the Firms Best Interest

Getting Divisions to Work in the Firms Best Interest

Managing Vertical Relationships

Filters

Marginal cost

Food Fanatics caters meals where their cost of producing an extra meal is $25.Each of their meals is standard and sells for $20.At this rate what should the company do?

Use the following to answer question -If hiring the 6th worker increases total product by 7 units and the price of each unit is $2,

According to the law of diminishing returns

Cruise liners offer last minute deals because

Jim's Burgers produces 500 burgers per week.He can sell as many burgers as he can cook for $3.What is the marginal revenue from selling the 50th burger?

Use the following table to answer question -How many units should the profit maximizing firm produce?

If Marginal cost is lower than Average Cost (AC),average cost is

Marginal revenue is_____________.

A widget producer is deciding whether to compensate widget makers on a salary basis or a per unit basis.Given that it is difficult to monitor shirking,which of these pay schedules would provide stronger performance incentives?

Use the following to answer question -The marginal cost of hiring the 4th worker is

Food Fanatics caters meals where their cost for producing an extra meal is $20.Each of their meals is standard and sells for $25.At this rate what should the company do?

Use the following to answer question -If the firm hires 5 workers,and produces 10 units,the average cost equals

Marginal cost is ____________.

Total costs increase from $1,500 to $1,800 when a firm increases output from 40 to 50 units..Which of the following are true?

Marginal cost typically and marginal revenue typically _ with increasing output.