Question 1

The short run is a time period during which

Accepted Answer

A)  a firm can earn a normal profit. 
B)  all factors of production are variable. 
C)  at least one factor of production is fixed. 
D)  all factors of production are fixed. 
A)  a firm can earn a normal profit. 
B)  all factors of production are variable. 
C)  at least one factor of production is fixed. 
D)  all factors of production are fixed.

Question 2

-The above table shows the short-run total product schedule for the campus book store. When the book store hires the 3rd employee

Accepted Answer

A)  the bookstore is still experiencing increasing marginal returns. 
B)  the book store has already begun to experience diminishing marginal returns, but average product is still rising. 
C)  both marginal and average product have already begun to decline. 
D)  marginal product is at its maximum. 
A)  the bookstore is still experiencing increasing marginal returns. 
B)  the book store has already begun to experience diminishing marginal returns, but average product is still rising. 
C)  both marginal and average product have already begun to decline. 
D)  marginal product is at its maximum.

Question 3

-Based on the above figure, at which level of output does diminishing marginal returns first occur at Ike's Ice Cream Kitchen?

Accepted Answer

A)  at 0 gallons 
B)  at 10 gallons 
C)  at 40 gallons 
D)  at 60 gallons 
A)  at 0 gallons 
B)  at 10 gallons 
C)  at 40 gallons 
D)  at 60 gallons

Question 4

A firm's average total cost is $80, its average variable cost is $75, and its output is 50 units. Its total fixed cost is

Accepted Answer

A)  less than $100. 
B)  between $100 and $200. 
C)  between $200 and $300. 
D)  more than $300. 
A)  less than $100. 
B)  between $100 and $200. 
C)  between $200 and $300. 
D)  more than $300.

Question 5

-The above table shows the total product of producing baseball hats. The marginal product of the 4th worker is equal to

Accepted Answer

A)  25 baseball hats. 
B)  21 baseball hats. 
C)  7 baseball hats. 
D)  6.25 baseball hats. 
A)  25 baseball hats. 
B)  21 baseball hats. 
C)  7 baseball hats. 
D)  6.25 baseball hats.

Question 6

Health care costs rose more than 10 percent in 2011, according to a survey of insurers by Aon Consulting Worldwide. If the increase in costs solely comes from increased prices for MRI and X-ray machines, then for the health care industry

Accepted Answer

A)  fixed costs are increasing. 
B)  long run average total cost is decreasing. 
C)  productivity is increasing. 
D)  variable costs are increasing. 
A)  fixed costs are increasing. 
B)  long run average total cost is decreasing. 
C)  productivity is increasing. 
D)  variable costs are increasing.

Question 7

-Based on the above figure of the costs at Barney's Bagel Bakery, at which of the following levels of output does the marginal product of labor equal the average product of labor?

Accepted Answer

A)  at 500 bagels 
B)  at 2000 bagels 
C)  at 3000 bagels 
D)  None of the above because the marginal and average products of labor can never be equal. 
A)  at 500 bagels 
B)  at 2000 bagels 
C)  at 3000 bagels 
D)  None of the above because the marginal and average products of labor can never be equal.

Question 8

How do we calculate average fixed cost and why does average fixed cost fall as output increases?

Accepted Answer

Average fixed cost is calculated by divi

Question 9

-The above table shows some cost data for Tracey's Tents. What is the marginal cost of the 3rd tent?

Accepted Answer

A)  $25 
B)  $20 
C)  $70 
D)  $120 
A)  $25 
B)  $20 
C)  $70 
D)  $120

Question 10

-Based on the production data for Pat's Pizza Parlor in the above table, the average product of labor when 4 workers are hired is ________ pizzas.

Accepted Answer

A)  8 
B)  10 
C)  11.25 
D)  45 
A)  8 
B)  10 
C)  11.25 
D)  45

Question 11

-Based on the above figure, up to which level of output will Ike's Ice Cream Kitchen have increasing marginal returns?

Accepted Answer

A)  only at 0 gallons 
B)  up to 10 gallons 
C)  up to 40 gallons 
D)  up to 60 gallons 
A)  only at 0 gallons 
B)  up to 10 gallons 
C)  up to 40 gallons 
D)  up to 60 gallons

Question 12

The vertical distance between a firm's total cost (TC) and its total variable cost (TVC) curves

Accepted Answer

A)  decreases as output decreases. 
B)  is equal to the average variable cost, AVC. 
C)  is equal to the total fixed cost, TFC. 
D)  is equal to the marginal cost, MC. 
A)  decreases as output decreases. 
B)  is equal to the average variable cost, AVC. 
C)  is equal to the total fixed cost, TFC. 
D)  is equal to the marginal cost, MC.

Question 13

A firm's average variable cost is $90, its total fixed cost is $10,000, and its output is 1,000 units. Its total cost is

Accepted Answer

A)  less than $85,000. 
B)  between $85,000 and $95,000. 
C)  between $95,000 and $105,000. 
D)  more than $105,000. 
A)  less than $85,000. 
B)  between $85,000 and $95,000. 
C)  between $95,000 and $105,000. 
D)  more than $105,000.

Question 14

Minneapolis business Rogue Chocolatier sells specialty chocolate bars with a high cocoa content. The price of cocoa beans shot up 44 percent in 2008. How did this affect Rogue'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 15

-In the above table, diminishing marginal returns start to occur when the

Accepted Answer

A)  3rd worker is employed. 
B)  4th worker is employed. 
C)  5th worker is employed. 
D)  6th worker is employed. 
A)  3rd worker is employed. 
B)  4th worker is employed. 
C)  5th worker is employed. 
D)  6th worker is employed.

Question 16

The short run is a time frame in which

Accepted Answer

A)  the quantities of some factors of production are fixed and the quantities of other factors of production can be varied. 
B)  the quantities of all factors of production can be varied. 
C)  the quantities of all factors of production are fixed. 
D)  all costs are sunk costs. 
A)  the quantities of some factors of production are fixed and the quantities of other factors of production can be varied. 
B)  the quantities of all factors of production can be varied. 
C)  the quantities of all factors of production are fixed. 
D)  all costs are sunk costs.

Question 17

Jake is a corn farmer in Nebraska. He rents his land on a long-term lease for $250,000 a year. He pays his farm hands $28,000 a year. Is his rent a fixed cost or a variable cost? Are the wages he pays his workers a fixed cost or a variable cost? Briefly explain your answers.

Accepted Answer

Jake's rent is a fixed cost. He is renti

Question 18

-In the above figure, the average product of labor at point c is

Accepted Answer

A)  10. 
B)  5. 
C)  2. 
D)  None of the above answers is correct. 
A)  10. 
B)  5. 
C)  2. 
D)  None of the above answers is correct.

Question 19

The long-run average cost curve is the relationship between the highest attainable average total cost and output when both the plant size and labor are varied.

Accepted Answer

A) True 
 B)False

Question 20

-The above table gives the total cost schedule for oil changes at the local Jiffy Lube.
a) What is Jiffy Lube's total fixed cost?
b) What is the total variable cost of 2 oil changes?
c) What is the average variable cost of 4 oil changes?
d) What is the average fixed cost of 2 oil changes?
e) What is the marginal cost of the 3rd oil change?

Accepted Answer

a) The total fixed cost is $10. At zero

The short run is a time period during which

-The above table shows the short-run total product schedule for the campus book store. When the book store hires the 3rd employee

-Based on the above figure, at which level of output does diminishing marginal returns first occur at Ike's Ice Cream Kitchen?

A firm's average total cost is $80, its average variable cost is $75, and its output is 50 units. Its total fixed cost is

-The above table shows the total product of producing baseball hats. The marginal product of the 4th worker is equal to

Health care costs rose more than 10 percent in 2011, according to a survey of insurers by Aon Consulting Worldwide. If the increase in costs solely comes from increased prices for MRI and X-ray machines, then for the health care industry

-Based on the above figure of the costs at Barney's Bagel Bakery, at which of the following levels of output does the marginal product of labor equal the average product of labor?

How do we calculate average fixed cost and why does average fixed cost fall as output increases?

-The above table shows some cost data for Tracey's Tents. What is the marginal cost of the 3rd tent?

-Based on the production data for Pat's Pizza Parlor in the above table, the average product of labor when 4 workers are hired is ________ pizzas.

-Based on the above figure, up to which level of output will Ike's Ice Cream Kitchen have increasing marginal returns?

The vertical distance between a firm's total cost (TC) and its total variable cost (TVC) curves

A firm's average variable cost is $90, its total fixed cost is $10,000, and its output is 1,000 units. Its total cost is

Minneapolis business Rogue Chocolatier sells specialty chocolate bars with a high cocoa content. The price of cocoa beans shot up 44 percent in 2008. How did this affect Rogue's short run costs?

-In the above table, diminishing marginal returns start to occur when the

The short run is a time frame in which

Jake is a corn farmer in Nebraska. He rents his land on a long-term lease for $250,000 a year. He pays his farm hands $28,000 a year. Is his rent a fixed cost or a variable cost? Are the wages he pays his workers a fixed cost or a variable cost? Briefly explain your answers.

-In the above figure, the average product of labor at point c is

The long-run average cost curve is the relationship between the highest attainable average total cost and output when both the plant size and labor are varied.

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

The short run is a time period during which

-The above table shows the short-run total product schedule for the campus book store. When the book store hires the 3rd employee

-Based on the above figure, at which level of output does diminishing marginal returns first occur at Ike's Ice Cream Kitchen?

A firm's average total cost is $80, its average variable cost is $75, and its output is 50 units. Its total fixed cost is

-The above table shows the total product of producing baseball hats. The marginal product of the 4th worker is equal to

Health care costs rose more than 10 percent in 2011, according to a survey of insurers by Aon Consulting Worldwide. If the increase in costs solely comes from increased prices for MRI and X-ray machines, then for the health care industry

-Based on the above figure of the costs at Barney's Bagel Bakery, at which of the following levels of output does the marginal product of labor equal the average product of labor?

How do we calculate average fixed cost and why does average fixed cost fall as output increases?

-The above table shows some cost data for Tracey's Tents. What is the marginal cost of the 3rd tent?

-Based on the production data for Pat's Pizza Parlor in the above table, the average product of labor when 4 workers are hired is ________ pizzas.

-Based on the above figure, up to which level of output will Ike's Ice Cream Kitchen have increasing marginal returns?

The vertical distance between a firm's total cost (TC) and its total variable cost (TVC) curves

A firm's average variable cost is $90, its total fixed cost is $10,000, and its output is 1,000 units. Its total cost is

Minneapolis business Rogue Chocolatier sells specialty chocolate bars with a high cocoa content. The price of cocoa beans shot up 44 percent in 2008. How did this affect Rogue's short run costs?

-In the above table, diminishing marginal returns start to occur when the

The short run is a time frame in which

Jake is a corn farmer in Nebraska. He rents his land on a long-term lease for $250,000 a year. He pays his farm hands $28,000 a year. Is his rent a fixed cost or a variable cost? Are the wages he pays his workers a fixed cost or a variable cost? Briefly explain your answers.

-In the above figure, the average product of labor at point c is

The long-run average cost curve is the relationship between the highest attainable average total cost and output when both the plant size and labor are varied.

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