Question 1

Suppose a firm is producing 500 units of output,incurring a total cost of $700 000 and total fixed cost of $100 000.It can be concluded that average variable cost is

Accepted Answer

A) $200. 
B) $600. 
C) $1200. 
D) $1400. 
E) $1600. 
A) $200. 
B) $600. 
C) $1200. 
D) $1400. 
E) $1600.

Question 2

A firm's short-run cost curves,as conventionally drawn,show that

Accepted Answer

A) AFC increases as output increases. 
B) ATC = TFC + TVC. 
C) AVC decreases as long as MC > AVC. 
D) the MC curve intersects the AVC and ATC curves at their maximum points. 
E) ATC decreases and then increases as output increases. 
A) AFC increases as output increases. 
B) ATC = TFC + TVC. 
C) AVC decreases as long as MC > AVC. 
D) the MC curve intersects the AVC and ATC curves at their maximum points. 
E) ATC decreases and then increases as output increases.

Question 3

Consider a basket-producing firm with fixed capital.If the firm can produce 24 baskets per day with 3 workers and then increases production to 36 baskets per day with 4 workers,then which of the following statements is definitely true?

Accepted Answer

A) The firm has passed the point of diminishing marginal productivity. 
B) The marginal productivity of the fourth worker is 9. 
C) The firm has passed the point of diminishing average productivity. 
D) With 4 workers,the average product is greater than the marginal product. 
E) With 4 workers,the marginal product is greater than the average product. 
A) The firm has passed the point of diminishing marginal productivity. 
B) The marginal productivity of the fourth worker is 9. 
C) The firm has passed the point of diminishing average productivity. 
D) With 4 workers,the average product is greater than the marginal product. 
E) With 4 workers,the marginal product is greater than the average product.

Question 4

Suppose a firm with the usual U-shaped cost curves is producing a level of output such that its short run costs are as follows: ATC = $0.37 per unit
AVC = $0.32 per unit
AFC = $0.05 per unit
MC = $0.43 per unit
Given these short run costs,which of the following statements is true?

Accepted Answer

A) The firm is operating with excess capacity. 
B) The firm is operating at capacity. 
C) The firm is operating above capacity. 
D) The firm has no capacity constraints. 
E) The firm is producing a level of output where capacity is increasing. 
A) The firm is operating with excess capacity. 
B) The firm is operating at capacity. 
C) The firm is operating above capacity. 
D) The firm has no capacity constraints. 
E) The firm is producing a level of output where capacity is increasing.

Suppose a firm is producing 500 units of output,incurring a total cost of $700 000 and total fixed cost of $100 000.It can be concluded that average variable cost is

A firm's short-run cost curves,as conventionally drawn,show that

Consider a basket-producing firm with fixed capital.If the firm can produce 24 baskets per day with 3 workers and then increases production to 36 baskets per day with 4 workers,then which of the following statements is definitely true?

Suppose a firm with the usual U-shaped cost curves is producing a level of output such that its short run costs are as follows: ATC = $0.37 per unit AVC = $0.32 per unit AFC = $0.05 per unit MC = $0.43 per unit Given these short run costs,which of the following statements is true?

Economic Issues and Concepts

Economic Theories,Data,and Graphs

Demand, Supply, and Price

Elasticity

Price Controls and Market Efficiency

Consumer Behaviour

Producers in the Long Run

Competitive Markets

Monopoly, cartels, and Price Discrimination

Imperfect Competition and Strategic Behaviour

Economic Efficiency and Public Policy

How Factor Markets Work

Labour Markets and Income Inequality

Interest Rates and the Capital Market

Market Failures and Government Intervention

The Economics of Environmental Protection

Taxation and Public Expenditure

What Macroeconomics Is All About

The Measurement of National Income

The Simplest Short-Run Macro Model

Adding Government and Trade to the Simple Macro Model

Output and Prices in the Short Run

From the Short Run to the Long Run: The Adjustment of Factor Prices

Long-Run Economic Growth

Money and Banking

Money, Interest Rates, and Economic Activity

Monetary Policy in Canada

Inflation and Disinflation

Unemployment Fluctuations and the Nairu

Government Debt and Deficits

The Gains From International Trade

Trade Policy

Exchange Rates and the Balance of Payments

Filters

Exam 7: Producers in the Short Run

Suppose a firm is producing 500 units of output,incurring a total cost of $700 000 and total fixed cost of $100 000.It can be concluded that average variable cost is

A firm's short-run cost curves,as conventionally drawn,show that

Consider a basket-producing firm with fixed capital.If the firm can produce 24 baskets per day with 3 workers and then increases production to 36 baskets per day with 4 workers,then which of the following statements is definitely true?

Suppose a firm with the usual U-shaped cost curves is producing a level of output such that its short run costs are as follows: ATC = $0.37 per unit AVC = $0.32 per unit AFC = $0.05 per unit MC = $0.43 per unit Given these short run costs,which of the following statements is true?

Economic Issues and Concepts

Economic Theories,Data,and Graphs

Demand, Supply, and Price

Elasticity

Price Controls and Market Efficiency

Consumer Behaviour

Producers in the Long Run

Competitive Markets

Monopoly, cartels, and Price Discrimination

Imperfect Competition and Strategic Behaviour

Economic Efficiency and Public Policy

How Factor Markets Work

Labour Markets and Income Inequality

Interest Rates and the Capital Market

Market Failures and Government Intervention

The Economics of Environmental Protection

Taxation and Public Expenditure

What Macroeconomics Is All About

The Measurement of National Income

The Simplest Short-Run Macro Model

Adding Government and Trade to the Simple Macro Model

Output and Prices in the Short Run

From the Short Run to the Long Run: The Adjustment of Factor Prices

Long-Run Economic Growth

Money and Banking

Money, Interest Rates, and Economic Activity

Monetary Policy in Canada

Inflation and Disinflation

Unemployment Fluctuations and the Nairu

Government Debt and Deficits

The Gains From International Trade

Trade Policy

Exchange Rates and the Balance of Payments

Filters