Question 1

A potential problem with cross-section cost data is that

Accepted Answer

A) nominal cost data include the effect of inflation. 
B) different firms face different input prices. 
C) at least one input is fixed over time. 
D) both a and b 
E) none of the above 
A) nominal cost data include the effect of inflation. 
B) different firms face different input prices. 
C) at least one input is fixed over time. 
D) both a and b 
E) none of the above B

Question 2

An estimated short-run cost function

Accepted Answer

A) can be used to make price and output decisions. 
B) holds the capital stock constant. 
C) can be estimated using time-series data. 
D) both a and c 
E) all of the above 
A) can be used to make price and output decisions. 
B) holds the capital stock constant. 
C) can be estimated using time-series data. 
D) both a and c 
E) all of the above E

Question 3

Straker Industries estimated its short-run costs using a U-shaped average variable cost function of the form   and obtained the following results.Total fixed cost TFC)at Straker Industries is $1,000.   If Straker Industries produces 20 units of output,what is estimated total cost TC)?

Accepted Answer

A) $1,348 
B) $1,498 
C) $2,348 
D) $4,428 
A) $1,348 
B) $1,498 
C) $2,348 
D) $4,428 C

Question 4

A firm estimates its long-run production function to be   Suppose the firm employs 12 units of capital.Average product when 10 units of labor are employed is

Accepted Answer

A) 12,248 
B) 13,142 
C) 14,287 
D) 15,984 
E) 30,672 
A) 12,248 
B) 13,142 
C) 14,287 
D) 15,984 
E) 30,672

Question 5

A short-run production function was estimated as   What is total product when average product is at its maximum level?

Accepted Answer

A) 94 
B) 86 
C) 100 
D) 128 
E) 150 
A) 94 
B) 86 
C) 100 
D) 128 
E) 150

Question 6

A short-run production function was estimated as   At 20 units of labor,what is total product?

Accepted Answer

A) 48 
B) 96 
C) 20 
D) 62 
E) 41 
A) 48 
B) 96 
C) 20 
D) 62 
E) 41

Question 7

The opportunity cost of capital owned by the firm should reflect

Accepted Answer

A) acquisition cost. 
B) the return foregone by using the capital rather than renting it to another firm. 
C) wage rate differences. 
D) both a and b 
A) acquisition cost. 
B) the return foregone by using the capital rather than renting it to another firm. 
C) wage rate differences. 
D) both a and b

Question 8

Straker Industries estimated its short-run costs using a U-shaped average variable cost function of the form   and obtained the following results.Total fixed cost TFC)at Straker Industries is $1,000.   If Straker Industries produces 12 units of output,what is estimated average total cost ATC)?

Accepted Answer

A) $121.93 
B) $171.40 
C) $463.20 
D) $1,348 
A) $121.93 
B) $171.40 
C) $463.20 
D) $1,348

Question 9

Straker Industries estimated its short-run costs using a U-shaped average variable cost function of the form   and obtained the following results.Total fixed cost TFC)at Straker Industries is $1,000.   If Straker Industries produces 20 units of output,what is estimated total variable cost TVC)?

Accepted Answer

A) $1,348 
B) $1,498 
C) $2,348 
D) $4,428 
A) $1,348 
B) $1,498 
C) $2,348 
D) $4,428

Question 10

A firm estimates its long-run production function to be   Suppose the firm employs 12 units of capital.Marginal product when 10 units of labor are employed is

Accepted Answer

A) 12,248 
B) 13,142 
C) 14,287 
D) 15,984 
E) 30,672 
A) 12,248 
B) 13,142 
C) 14,287 
D) 15,984 
E) 30,672

Question 11

A firm estimates its long-run production function to be   Suppose the firm employs 12 units of capital.At ________ units of labor,average product of labor begins to diminish.

Accepted Answer

A) 32.21 
B) 44.44 
C) 66.67 
D) 76.66 
E) 82.27 
A) 32.21 
B) 44.44 
C) 66.67 
D) 76.66 
E) 82.27

Question 12

A short-run production function was estimated as   What is average product when it is at its maximum level?

Accepted Answer

A) 3.20 
B) 8.75 
C) 6.92 
D) 6.00 
E) 9.40 
A) 3.20 
B) 8.75 
C) 6.92 
D) 6.00 
E) 9.40

Question 13

The manager of Greene Enterprises,Inc.,recently estimated its average variable cost AVC)function to be   Greene Enterprises faces total fixed costs TFC)of $300,000.When Greene's output is 2,000 units,what is average variable cost AVC)?

Accepted Answer

A) $20 
B) $48 
C) $62 
D) $72 
E) $85 
A) $20 
B) $48 
C) $62 
D) $72 
E) $85

Question 14

Straker Industries estimated its short-run costs using a U-shaped average variable cost function of the form   and obtained the following results.Total fixed cost TFC)at Straker Industries is $1,000.   At what level of output is average variable cost AVC)at its minimum point for Straker Industries?

Accepted Answer

A) 0.14 
B) 4.7 
C) 7 
D) 14 
E) 28 
A) 0.14 
B) 4.7 
C) 7 
D) 14 
E) 28

Question 15

Straker Industries estimated its short-run costs using a U-shaped average variable cost function of the form   and obtained the following results.Total fixed cost TFC)at Straker Industries is $1,000.   At Straker Industries,average variable cost AVC)reaches its minimum value at $________.

Accepted Answer

A) $24.50 
B) $33.60 
C) $72.80 
D) $121.80 
A) $24.50 
B) $33.60 
C) $72.80 
D) $121.80

Question 16

The manager of Greene Enterprises,Inc.,recently estimated its average variable cost AVC)function to be   Greene Enterprises faces total fixed costs TFC)of $300,000.At Greene Enterprises,average variable cost AVC)reaches its minimum value at $________.

Accepted Answer

A) $28.00 
B) $31.67 
C) $39.64 
D) $43.33 
E) $82.00 
A) $28.00 
B) $31.67 
C) $39.64 
D) $43.33 
E) $82.00

Question 17

theoretical restriction on the short-run cubic cost equation,TVC = aQ + bQ + cQ2,is

Accepted Answer

A) a > 0,b > 0,c > 0 B) a > 0,b 0 C) a > 0,b > 0,c 0,b < 0,c < 0 A) a > 0,b > 0,c > 0 B) a > 0,b 0 C) a > 0,b > 0,c 0,b < 0,c < 0

Question 18

Which of the following is an estimable form of a production function?

Accepted Answer

A) Q = fL,K) 
B) Q = fL,   ) 
C)    
D) all of the above 
E) none of the above 
A) Q = fL,K) 
B) Q = fL,   ) 
C)    
D) all of the above 
E) none of the above

Question 19

Straker Industries estimated its short-run costs using a U-shaped average variable cost function of the form   and obtained the following results.Total fixed cost TFC)at Straker Industries is $1,000.   If Straker Industries produces 12 units of output,what is estimated total variable cost TVC)?

Accepted Answer

A) $171.40 
B) $463.20 
C) $1,348 
D) $2,348 
A) $171.40 
B) $463.20 
C) $1,348 
D) $2,348

Question 20

A firm estimates its long-run production function to be   Suppose the firm employs 12 units of capital.The product curves)in the short-run are

Accepted Answer

A) TP = -12.96 L3 + 1,728L2. 
B) AP = -12.96 L3 + 1,728L2. 
C) MP = -38.88 L2 + 3,456L. 
D) both a and b 
E) both a and c 
A) TP = -12.96 L3 + 1,728L2. 
B) AP = -12.96 L3 + 1,728L2. 
C) MP = -38.88 L2 + 3,456L. 
D) both a and b 
E) both a and c

A potential problem with cross-section cost data is that

An estimated short-run cost function

Straker Industries estimated its short-run costs using a U-shaped average variable cost function of the form and obtained the following results.Total fixed cost TFC)at Straker Industries is $1,000. If Straker Industries produces 20 units of output,what is estimated total cost TC)?

A firm estimates its long-run production function to be Suppose the firm employs 12 units of capital.Average product when 10 units of labor are employed is

A short-run production function was estimated as What is total product when average product is at its maximum level?

A short-run production function was estimated as At 20 units of labor,what is total product?

The opportunity cost of capital owned by the firm should reflect

Straker Industries estimated its short-run costs using a U-shaped average variable cost function of the form and obtained the following results.Total fixed cost TFC)at Straker Industries is $1,000. If Straker Industries produces 12 units of output,what is estimated average total cost ATC)?

Straker Industries estimated its short-run costs using a U-shaped average variable cost function of the form and obtained the following results.Total fixed cost TFC)at Straker Industries is $1,000. If Straker Industries produces 20 units of output,what is estimated total variable cost TVC)?

A firm estimates its long-run production function to be Suppose the firm employs 12 units of capital.Marginal product when 10 units of labor are employed is

A firm estimates its long-run production function to be Suppose the firm employs 12 units of capital.At ________ units of labor,average product of labor begins to diminish.

A short-run production function was estimated as What is average product when it is at its maximum level?

The manager of Greene Enterprises,Inc.,recently estimated its average variable cost AVC)function to be Greene Enterprises faces total fixed costs TFC)of $300,000.When Greene's output is 2,000 units,what is average variable cost AVC)?

Straker Industries estimated its short-run costs using a U-shaped average variable cost function of the form and obtained the following results.Total fixed cost TFC)at Straker Industries is $1,000. At what level of output is average variable cost AVC)at its minimum point for Straker Industries?

Straker Industries estimated its short-run costs using a U-shaped average variable cost function of the form and obtained the following results.Total fixed cost TFC)at Straker Industries is $1,000. At Straker Industries,average variable cost AVC)reaches its minimum value at $________.

The manager of Greene Enterprises,Inc.,recently estimated its average variable cost AVC)function to be Greene Enterprises faces total fixed costs TFC)of $300,000.At Greene Enterprises,average variable cost AVC)reaches its minimum value at $________.

theoretical restriction on the short-run cubic cost equation,TVC = aQ + bQ + cQ²,is

Which of the following is an estimable form of a production function?

Straker Industries estimated its short-run costs using a U-shaped average variable cost function of the form and obtained the following results.Total fixed cost TFC)at Straker Industries is $1,000. If Straker Industries produces 12 units of output,what is estimated total variable cost TVC)?

A firm estimates its long-run production function to be Suppose the firm employs 12 units of capital.The product curves)in the short-run are

Managers, profits, and Markets

Demand, supply, and Market Equilibrium

Marginal Analysis for Optimal Decision Making

Basic Estimation Techniques

Theory of Consumer Behavior

Elasticity and Demand

Demand Estimation and Forecasting

Production and Cost in the Short Run

Production and Cost in the Long Run

Managerial Decisions in Competitive Markets

Managerial Decisions for Firms With Market Power

Strategic Decision Making in Oligopoly Markets

Advanced Pricing Techniques

Decisions Under Risk and Uncertainty

Government Regulation of Business

Filters

Exam 10: Production and Cost Estimation

A potential problem with cross-section cost data is that

An estimated short-run cost function

Straker Industries estimated its short-run costs using a U-shaped average variable cost function of the form and obtained the following results.Total fixed cost TFC)at Straker Industries is $1,000. If Straker Industries produces 20 units of output,what is estimated total cost TC)?

A firm estimates its long-run production function to be Suppose the firm employs 12 units of capital.Average product when 10 units of labor are employed is

A short-run production function was estimated as What is total product when average product is at its maximum level?

A short-run production function was estimated as At 20 units of labor,what is total product?

The opportunity cost of capital owned by the firm should reflect

Straker Industries estimated its short-run costs using a U-shaped average variable cost function of the form and obtained the following results.Total fixed cost TFC)at Straker Industries is $1,000. If Straker Industries produces 12 units of output,what is estimated average total cost ATC)?

Straker Industries estimated its short-run costs using a U-shaped average variable cost function of the form and obtained the following results.Total fixed cost TFC)at Straker Industries is $1,000. If Straker Industries produces 20 units of output,what is estimated total variable cost TVC)?

A firm estimates its long-run production function to be Suppose the firm employs 12 units of capital.Marginal product when 10 units of labor are employed is

A firm estimates its long-run production function to be Suppose the firm employs 12 units of capital.At ________ units of labor,average product of labor begins to diminish.

A short-run production function was estimated as What is average product when it is at its maximum level?

The manager of Greene Enterprises,Inc.,recently estimated its average variable cost AVC)function to be Greene Enterprises faces total fixed costs TFC)of $300,000.When Greene's output is 2,000 units,what is average variable cost AVC)?

Straker Industries estimated its short-run costs using a U-shaped average variable cost function of the form and obtained the following results.Total fixed cost TFC)at Straker Industries is $1,000. At what level of output is average variable cost AVC)at its minimum point for Straker Industries?

Straker Industries estimated its short-run costs using a U-shaped average variable cost function of the form and obtained the following results.Total fixed cost TFC)at Straker Industries is $1,000. At Straker Industries,average variable cost AVC)reaches its minimum value at $________.

The manager of Greene Enterprises,Inc.,recently estimated its average variable cost AVC)function to be Greene Enterprises faces total fixed costs TFC)of $300,000.At Greene Enterprises,average variable cost AVC)reaches its minimum value at $________.

theoretical restriction on the short-run cubic cost equation,TVC = aQ + bQ + cQ2,is

Which of the following is an estimable form of a production function?

Straker Industries estimated its short-run costs using a U-shaped average variable cost function of the form and obtained the following results.Total fixed cost TFC)at Straker Industries is $1,000. If Straker Industries produces 12 units of output,what is estimated total variable cost TVC)?

A firm estimates its long-run production function to be Suppose the firm employs 12 units of capital.The product curves)in the short-run are

Managers, profits, and Markets

Demand, supply, and Market Equilibrium

Marginal Analysis for Optimal Decision Making

Basic Estimation Techniques

Theory of Consumer Behavior

Elasticity and Demand

Demand Estimation and Forecasting

Production and Cost in the Short Run

Production and Cost in the Long Run

Managerial Decisions in Competitive Markets

Managerial Decisions for Firms With Market Power

Strategic Decision Making in Oligopoly Markets

Advanced Pricing Techniques

Decisions Under Risk and Uncertainty

Government Regulation of Business

Filters

theoretical restriction on the short-run cubic cost equation,TVC = aQ + bQ + cQ²,is