Question 1

If a firm produces 10 units,TC=$100.When the firm increase its output to 15 units,TC= $150.The firm's AVC equal to

Accepted Answer

A) $5 
B) $10 
C) $50 
D) $100 
A) $5 
B) $10 
C) $50 
D) $100

Question 2

A firm produces 1000 units per week.It hires 10 full-time workers (40 hours/week)at an hourly wage of $20.Raw materials are ordered weekly and they costs $5 for every unit produced.The weekly cost of the rent payment for the factory is $1,500.How do the overall costs breakdown 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

Question 3

Marginal cost

Accepted Answer

A) Is the additional cost incurred by producing and selling one more unit 
B) Is the total cost incurred by producing and selling one more unit 
C) Is the additional fixed cost incurred by producing and selling one more unit 
D) None of the above 
A) Is the additional cost incurred by producing and selling one more unit 
B) Is the total cost incurred by producing and selling one more unit 
C) Is the additional fixed cost incurred by producing and selling one more unit 
D) None of the above

Question 4

The level of an economic activity should be increased to the point where the ____ is zero.

Accepted Answer

A) Marginal cost 
B) Marginal benefit 
C) Net marginal cost 
D) Net marginal benefit 
A) Marginal cost 
B) Marginal benefit 
C) Net marginal cost 
D) Net marginal benefit

Question 5

Total costs increase from $1500 to $1800 when a firm increases output from 40 to 50 units.Which of the following are true?

Accepted Answer

A) AVC rise by $300 
B) AVC rise by $1800 
C) AVC rise by $1500 
D) AVC rise by $0 
A) AVC rise by $300 
B) AVC rise by $1800 
C) AVC rise by $1500 
D) AVC rise by $0

Question 6

What is the difference between the average cost per unit for 5 units and the marginal cost of the 5th unit?

Accepted Answer

A) 196 
B) 86 
C) 40. 
D) 110. 
A) 196 
B) 86 
C) 40. 
D) 110.

Question 7

Use the following table to answer questions 38 - 41:
  
-What is the marginal cost of producing the third unit?

Accepted Answer

A) 60 
B) 70 
C) 90 
D) 110 
A) 60 
B) 70 
C) 90 
D) 110

Question 8

Marginal cost is the ____________ cost of producing one additional unit and marginal revenue is the_____________ revenue of selling an additional unit.

Accepted Answer

A) Incremental,Incremental 
B) Total,Incremental 
C) Incremental,Total 
D) Total,Total 
A) Incremental,Incremental 
B) Total,Incremental 
C) Incremental,Total 
D) Total,Total

Question 9

?If AVC=$15 and AFC=$10,then ATC=

Accepted Answer

A) $10 
B) $5 
C) $15 
D) $25 
A) $10 
B) $5 
C) $15 
D) $25

Question 10

Total costs increase from $1500 to $1800 when a firm increases output from 40 to 50 units.Which of the following are true?

Accepted Answer

A) FC = $100 
B) MC=300 
C) MC=30 
D) FC = $400 
A) FC = $100 
B) MC=300 
C) MC=30 
D) FC = $400

Question 11

A company is producing 15,000 units.At this output level,marginal revenue is $22 and the marginal cost is $18.The firm sells each unit for $48 and average total cost is $40.What can we conclude from this information?

Accepted Answer

A) The company is making a loss 
B) The company needs to cut production 
C) The company needs to increase production 
D) Not enough information is provided 
A) The company is making a loss 
B) The company needs to cut production 
C) The company needs to increase production 
D) Not enough information is provided

Question 12

Jim' burger produces 500 burgers per week.Each burger is priced at $3.A business ordered 750 burgers for an upcoming event.Jim decided to offer a discount by reducing the price of the burgers to $2.50 for the party.What is the marginal revenue of selling the 50th burger for the party?

Accepted Answer

A) $3 
B) $2.50 
C) $0.50 
D) It cannot be determined with the information given 
A) $3 
B) $2.50 
C) $0.50 
D) It cannot be determined with the information given

Question 13

A firm currently has 5 workers each paid $15 per hour.If it decides to hire a 6th worker,the hourly wage increases to $18 for all workers.The 6th worker is expected to contribute to around $40 worth of output.Based on this information,the firm should

Accepted Answer

A) Hire the 6th worker since MR>MC B) Not hire the 6th worker since MR>MC C) Not hire the workers since MRMC B) Not hire the 6th worker since MR>MC C) Not hire the workers since MR

Question 14

What is the average total cost of hiring the 7th worker?

Accepted Answer

A) $400 
B) $800 
C) $1200 
D) $1600 
A) $400 
B) $800 
C) $1200 
D) $1600

Question 15

A firm currently has 5 workers each paid $15 per hour.If it decides to hire a 6th worker,the hourly wage increases to $18 for all workers.What is the marginal cost of hiring the 6th worker?

Accepted Answer

A) $3 
B) $18 
C) $15 
D) $33 
A) $3 
B) $18 
C) $15 
D) $33

Question 16

Total costs increase from $1500 to $1800 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 17

Use the following to answer questions 4-8:
  
-If the firm hires 8 workers,the total amount of fixed costs equals

Accepted Answer

A) $6200 
B) $1000 
C) $600 
D) $1200 
A) $6200 
B) $1000 
C) $600 
D) $1200

Question 18

According to the law of diminishing returns,

Accepted Answer

A) Some productions factors are fixed 
B) All inputs are variable 
C) All inputs are fixed 
D) None of the above 
A) Some productions factors are fixed 
B) All inputs are variable 
C) All inputs are fixed 
D) None of the above

Question 19

Average cost is

Accepted Answer

A) Total variable cost divided by total units produced 
B) Total fixed cost divided by total units produced 
C) Total cost divided by total units produced 
D) Equal to marginal cost 
A) Total variable cost divided by total units produced 
B) Total fixed cost divided by total units produced 
C) Total cost divided by total units produced 
D) Equal to marginal cost

Question 20

Use the following table to answer questions 38 - 41:
  
-How many units should the firm produce? In other words,at what level of output does marginal cost equal marginal revenue?

Accepted Answer

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

Exam 4: Extent How Muchdecisions

If a firm produces 10 units,TC=$100.When the firm increase its output to 15 units,TC= $150.The firm's AVC equal to

A firm produces 1000 units per week.It hires 10 full-time workers (40 hours/week)at an hourly wage of $20.Raw materials are ordered weekly and they costs $5 for every unit produced.The weekly cost of the rent payment for the factory is $1,500.How do the overall costs breakdown for the week?

Marginal cost

The level of an economic activity should be increased to the point where the ____ is zero.

Total costs increase from $1500 to $1800 when a firm increases output from 40 to 50 units.Which of the following are true?

What is the difference between the average cost per unit for 5 units and the marginal cost of the 5th unit?

Use the following table to answer questions 38 - 41: -What is the marginal cost of producing the third unit?

Marginal cost is the ____________ cost of producing one additional unit and marginal revenue is the_____________ revenue of selling an additional unit.

?If AVC=$15 and AFC=$10,then ATC=

Total costs increase from $1500 to $1800 when a firm increases output from 40 to 50 units.Which of the following are true?

A company is producing 15,000 units.At this output level,marginal revenue is $22 and the marginal cost is $18.The firm sells each unit for $48 and average total cost is $40.What can we conclude from this information?

Jim' burger produces 500 burgers per week.Each burger is priced at $3.A business ordered 750 burgers for an upcoming event.Jim decided to offer a discount by reducing the price of the burgers to $2.50 for the party.What is the marginal revenue of selling the 50th burger for the party?

A firm currently has 5 workers each paid $15 per hour.If it decides to hire a 6th worker,the hourly wage increases to $18 for all workers.The 6th worker is expected to contribute to around $40 worth of output.Based on this information,the firm should

What is the average total cost of hiring the 7th worker?

A firm currently has 5 workers each paid $15 per hour.If it decides to hire a 6th worker,the hourly wage increases to $18 for all workers.What is the marginal cost of hiring the 6th worker?

Total costs increase from $1500 to $1800 when a firm increases output from 40 to 50 units.Which of the following are true?

Use the following to answer questions 4-8: -If the firm hires 8 workers,the total amount of fixed costs equals

According to the law of diminishing returns,

Average cost is

Use the following table to answer questions 38 - 41: -How many units should the firm produce? In other words,at what level of output does marginal cost equal marginal revenue?

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 Indirect 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 is the cost of producing one additional unit and marginal revenue is the_ revenue of selling an additional unit.