Question 1

After constructing a new factory, the cost of building the factory is a

Accepted Answer

A)  past cost. 
B)  sunk cost. 
C)  variable cost. 
D)  None of the above answers are correct. 
A)  past cost. 
B)  sunk cost. 
C)  variable cost. 
D)  None of the above answers are correct.

Question 2

-The above table shows some cost data for Tracey's Tents. What is the average fixed cost when 4 tents are produced?

Accepted Answer

A)  $50.00 
B)  $12.50 
C)  $25.00 
D)  $37.50 
A)  $50.00 
B)  $12.50 
C)  $25.00 
D)  $37.50

Question 3

When the average product of labor is greater than the marginal product of labor

Accepted Answer

A)  the marginal product of labor must be increasing as labor increases. 
B)  there must be increasing marginal returns. 
C)  the average product of labor is decreasing as labor increases. 
D)  None of the above answers is correct 
A)  the marginal product of labor must be increasing as labor increases. 
B)  there must be increasing marginal returns. 
C)  the average product of labor is decreasing as labor increases. 
D)  None of the above answers is correct

Question 4

Cost schedule  
-Using the data in the above table, the average total cost of producing 16 units per day is

Accepted Answer

A)  $1.25. 
B)  $6.25. 
C)  $7.00 
D)  $7.50. 
A)  $1.25. 
B)  $6.25. 
C)  $7.00 
D)  $7.50.

Question 5

If the average total cost of producing 20 sweaters an hour falls when the firm doubles all its inputs, then the

Accepted Answer

A)  short-run average total cost curve shifts upward because all inputs have increased. 
B)  firm moves along its short-run average total cost curve. 
C)  firm experiences economies of scale. 
D)  long-run average cost curve shifts downward. 
A)  short-run average total cost curve shifts upward because all inputs have increased. 
B)  firm moves along its short-run average total cost curve. 
C)  firm experiences economies of scale. 
D)  long-run average cost curve shifts downward.

Question 6

The output at which average variable cost is a minimum is ________ than the output at which ________ is a minimum.

Accepted Answer

A)  the same as; average total cost 
B)  the same as; marginal cost 
C)  less than; average total cost 
D)  less than; marginal cost 
A)  the same as; average total cost 
B)  the same as; marginal cost 
C)  less than; average total cost 
D)  less than; marginal cost

Question 7

-Silvio's Pizza is a small pizzeria. The firm's production function is shown in the table above. Suppose that Silvio's costs include only the cost of renting ovens, which is $100 per oven per week, the labor cost, $280 per worker per week, and the opportunity cost of Silvio's entrepreneurship, $1,000 per week. Suppose Silvio's uses Plant 1 and hires 2 workers. What is the firm's average variable cost?

Accepted Answer

A)  $7.00 
B)  $6.40 
C)  $19.50 
D)  $8.25 
A)  $7.00 
B)  $6.40 
C)  $19.50 
D)  $8.25

Question 8

In the long run, a firm has

Accepted Answer

A)  no factors of production that are fixed. 
B)  no factors of production that are variable. 
C)  no factors of production that are either fixed or variable. 
D)  fixed factors of production but no variable resources. 
A)  no factors of production that are fixed. 
B)  no factors of production that are variable. 
C)  no factors of production that are either fixed or variable. 
D)  fixed factors of production but no variable resources.

Question 9

If as output increases average product increases, then ________.

Accepted Answer

A)  average total cost decreases 
B)  average fixed cost decreases 
C)  marginal cost decreases 
D)  average variable cost decreases 
A)  average total cost decreases 
B)  average fixed cost decreases 
C)  marginal cost decreases 
D)  average variable cost decreases

Question 10

-As output increases, total cost ________, total fixed cost ________, and total variable cost ________.

Accepted Answer

A)  increases; increases; increases 
B)  increases; increases; does not change 
C)  increases; does not change; increases 
D)  does not change; increases; increases 
A)  increases; increases; increases 
B)  increases; increases; does not change 
C)  increases; does not change; increases 
D)  does not change; increases; increases

Question 11

Diseconomies of scale definitely means that as the firm increases its output, its

Accepted Answer

A)  long-run average total cost increases. 
B)  long-run average total cost decreases. 
C)  short-run average total cost increases. 
D)  short-run average total cost decreases. 
A)  long-run average total cost increases. 
B)  long-run average total cost decreases. 
C)  short-run average total cost increases. 
D)  short-run average total cost decreases.

Question 12

-Are the curves in the figure above drawn CORRECTLY? If not, what's wrong?

Accepted Answer

The curves are not drawn correctly. Firs

Question 13

Which of the following statements is CORRECT?

Accepted Answer

A)  As output increases, total cost and total fixed cost increase by the same amount. 
B)  As output increases, total cost and total fixed cost increase but not necessarily by the same amount. 
C)  As output increases, total cost increases and total fixed cost decreases. 
D)  Total fixed cost plus total variable cost equals total cost. 
A)  As output increases, total cost and total fixed cost increase by the same amount. 
B)  As output increases, total cost and total fixed cost increase but not necessarily by the same amount. 
C)  As output increases, total cost increases and total fixed cost decreases. 
D)  Total fixed cost plus total variable cost equals total cost.

Question 14

The a firm's short-run cost curves shifts when there is a change in

Accepted Answer

A)  technology 
B)  the prices of factors of production 
C)  the quantity of outputs 
D)  Both answers A and B are correct. 
A)  technology 
B)  the prices of factors of production 
C)  the quantity of outputs 
D)  Both answers A and B are correct.

Question 15

Ernie's Earmuffs produces 200 earmuffs per year at a total cost of $2,000 and $400 of this cost is fixed. What is Ernie's average total cost?

Accepted Answer

A)  $12 
B)  $10 
C)  $8 
D)  $2 
A)  $12 
B)  $10 
C)  $8 
D)  $2

Question 16

-Silvio's Pizza is a small pizzeria. The firm's production function is shown in the table above. Suppose that Silvio's costs include only the cost of renting ovens, which is $100 per oven per week, the labor cost, $280 per worker per week, and the opportunity cost of Silvio's entrepreneurship, $1,000 per week. When Silvio's uses 2 ovens and hires the 3rd worker, the marginal product of labor is ________ the average product of labor, and therefore the average product of labor ________.

Accepted Answer

A)  less than; decreases 
B)  less than; increases 
C)  greater than; decreases 
D)  greater than; increases 
A)  less than; decreases 
B)  less than; increases 
C)  greater than; decreases 
D)  greater than; increases

Question 17

-The above table gives some of the costs of the Delicious Pie Company. What is the average total cost of producing 200 pies?

Accepted Answer

A)  $5.00 
B)  $650 
C)  $6.50 
D)  More information is needed to calculate the average total cost. 
A)  $5.00 
B)  $650 
C)  $6.50 
D)  More information is needed to calculate the average total cost.

Question 18

Economies of scale

Accepted Answer

A)  lead to rising long-run average costs as output increases. 
B)  occur if output more than doubles when all inputs are doubled. 
C)  occur if output less than doubles when all inputs are doubled. 
D)  occur when management complexity brings rising average cost. 
A)  lead to rising long-run average costs as output increases. 
B)  occur if output more than doubles when all inputs are doubled. 
C)  occur if output less than doubles when all inputs are doubled. 
D)  occur when management complexity brings rising average cost.

Question 19

Which of the following would be classified as a variable cost for the local Texaco station?

Accepted Answer

A)  interest payments to a local bank for a 5-year loan 
B)  the total wages paid to the workers who are all paid $16.00 per hour, no matter how many hours they work each week 
C)  the premiums paid for liability insurance, which are constant throughout the life of the contract 
D)  the opportunity cost of money used to finance the installation of some new pumps 
A)  interest payments to a local bank for a 5-year loan 
B)  the total wages paid to the workers who are all paid $16.00 per hour, no matter how many hours they work each week 
C)  the premiums paid for liability insurance, which are constant throughout the life of the contract 
D)  the opportunity cost of money used to finance the installation of some new pumps

Question 20

With a technological change that increases productivity, the average product curve ________ and the marginal product curve ________.

Accepted Answer

A)  shifts upward; is unchanged 
B)  is unchanged; is unchanged 
C)  is unchanged; shifts upward 
D)  shifts upward; shifts upward 
A)  shifts upward; is unchanged 
B)  is unchanged; is unchanged 
C)  is unchanged; shifts upward 
D)  shifts upward; shifts upward

After constructing a new factory, the cost of building the factory is a

-The above table shows some cost data for Tracey's Tents. What is the average fixed cost when 4 tents are produced?

When the average product of labor is greater than the marginal product of labor

Cost schedule -Using the data in the above table, the average total cost of producing 16 units per day is

If the average total cost of producing 20 sweaters an hour falls when the firm doubles all its inputs, then the

The output at which average variable cost is a minimum is than the output at which is a minimum.

In the long run, a firm has

If as output increases average product increases, then ________.

-As output increases, total cost , total fixed cost , and total variable cost .

Diseconomies of scale definitely means that as the firm increases its output, its

-Are the curves in the figure above drawn CORRECTLY? If not, what's wrong?

Which of the following statements is CORRECT?

The a firm's short-run cost curves shifts when there is a change in

Ernie's Earmuffs produces 200 earmuffs per year at a total cost of $2,000 and $400 of this cost is fixed. What is Ernie's average total cost?

-The above table gives some of the costs of the Delicious Pie Company. What is the average total cost of producing 200 pies?

Economies of scale

Which of the following would be classified as a variable cost for the local Texaco station?

With a technological change that increases productivity, the average product curve and the marginal product curve .

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

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

After constructing a new factory, the cost of building the factory is a

-The above table shows some cost data for Tracey's Tents. What is the average fixed cost when 4 tents are produced?

When the average product of labor is greater than the marginal product of labor

Cost schedule -Using the data in the above table, the average total cost of producing 16 units per day is

If the average total cost of producing 20 sweaters an hour falls when the firm doubles all its inputs, then the

The output at which average variable cost is a minimum is ________ than the output at which ________ is a minimum.

In the long run, a firm has

If as output increases average product increases, then ________.

-As output increases, total cost ________, total fixed cost ________, and total variable cost ________.

Diseconomies of scale definitely means that as the firm increases its output, its

-Are the curves in the figure above drawn CORRECTLY? If not, what's wrong?

Which of the following statements is CORRECT?

The a firm's short-run cost curves shifts when there is a change in

Ernie's Earmuffs produces 200 earmuffs per year at a total cost of $2,000 and $400 of this cost is fixed. What is Ernie's average total cost?

-The above table gives some of the costs of the Delicious Pie Company. What is the average total cost of producing 200 pies?

Economies of scale

Which of the following would be classified as a variable cost for the local Texaco station?

With a technological change that increases productivity, the average product curve ________ and the marginal product curve ________.

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

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 output at which average variable cost is a minimum is than the output at which is a minimum.

-As output increases, total cost , total fixed cost , and total variable cost .

With a technological change that increases productivity, the average product curve and the marginal product curve .