Question 1

Use the following to answer question: 
-(Table: Cost Data)Use Table: Cost Data.The average total cost of producing 5 purses is:

Accepted Answer

A) $10. 
B) $38. 
C) $48. 
D) $240.

Question 2

Scale is the size of a firm's operations.

Accepted Answer

A) True 
 B)False

Question 3

Use the following to answer question: 
-(Figure: Long-Run Average Cost)Use Figure: Long-Run Average Cost.This firm has _____ in the output region from B to C.

Accepted Answer

A) constant returns to scale 
B) diseconomies of scale 
C) economies of scale 
D) falling marginal cost

Question 4

The level of inputs a firm employs will determine a firm's:

Accepted Answer

A) ability to produce output. 
B) elasticity of demand. 
C) stock price. 
D) location of production.

Question 5

Variable cost divided by the quantity of output produced is _____ cost.

Accepted Answer

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

Question 6

Use the following to answer question: 
-(Table: Costs of Birthday Cakes)Use Table: Costs of Birthday Cakes.Assume that fixed costs are $10.What is the average fixed cost of 5 cakes?

Accepted Answer

A) $1 
B) $2 
C) $5 
D) $10

Question 7

An input whose quantity CANNOT be changed in the short run is:

Accepted Answer

A) marginal. 
B) fixed. 
C) incremental. 
D) variable.

Question 8

Use the following to answer question: 
-(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 3 mixers and bakes 100 cakes per day,what is her average total cost?

Accepted Answer

A) $4 
B) $25 
C) $29 
D) $625

Question 9

Use the following to answer question: 
-(Figure: Long-Run Average Cost)Use Figure: Long-Run Average Cost.This firm has _____ in the output region from B to C.

Accepted Answer

A) constant returns to scale 
B) decreasing returns to scale 
C) increasing returns to scale 
D) falling marginal cost

Question 10

A business produces 10 pairs of eyeglasses.It incurs $30 in average variable cost and $35 in average total cost.The total fixed cost of producing 10 pairs of eyeglasses is:

Accepted Answer

A) $3. 
B) $35. 
C) $50. 
D) $300.

Question 11

If two firms are identical in all respects except that one has more of the fixed input capital than another,the total product curve for the firm with more capital:

Accepted Answer

A) must equal the total product curve for the firm with less capital. 
B) will lie above the total product curve for the firm with less capital. 
C) will lie below the total product curve for the firm with less capital. 
D) will show no diminishing marginal returns.

Question 12

Use the following to answer question: 
-(Table: Costs of Producing Bagels)Use Table: Cost of Producing Bagels.The marginal cost of producing the sixth bagel is:

Accepted Answer

A) $0.10. 
B) $0.15. 
C) $0.20. 
D) $0.80.

Question 13

Suppose the marginal cost curve in the short run first decreases and then increases.If marginal cost is increasing,_____ must be _____.

Accepted Answer

A) marginal product;increasing 
B) average variable cost;increasing 
C) average total cost;increasing 
D) marginal product;decreasing

Question 14

Use the following to answer question: 
-(Figure: The Average Total Cost Curve)Use Figure: The Average Total Cost Curve.The total cost of producing 10 pairs of boots is approximately:

Accepted Answer

A) $13. 
B) $54. 
C) $131. 
D) $1,308.

Question 15

The marginal product of labor is the:

Accepted Answer

A) change in labor divided by the change in total product. 
B) slope of the total product of labor curve. 
C) change in average product divided by the change in the quantity of labor. 
D) change in output that occurs when capital increases by one unit.

Question 16

Farmers in the United States grow about three times as much wheat per acre as do farmers in Western Europe.

Accepted Answer

A) True 
 B)False

Question 17

Janet's poodle grooming salon has a total cost curve expressed by the equation TC = 100 + 3Q2,where Q is the quantity of dogs groomed.Janet notices that,as she grooms more dogs,her total cost curve:

Accepted Answer

A) becomes steeper. 
B) becomes flatter. 
C) stays constant. 
D) becomes steeper and then becomes horizontal.

Question 18

When a firm adds capital,in the short run variable costs for any level of output will:

Accepted Answer

A) increase. 
B) decrease. 
C) remain the same. 
D) increase at first and then decrease.

Question 19

Use the following to answer question: 
-(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 3 mixers,her average total cost _____ in the range of output between 100 and 400 cakes.

Accepted Answer

A) increases 
B) decreases 
C) remains the same 
D) can't be calculated

Question 20

When returns are diminishing,the marginal cost curve is upward-sloping.

Accepted Answer

A) True 
 B)False

Exam 11: Behind the Supply Curve: Inputs and Costs

Use the following to answer question: -(Table: Cost Data) Use Table: Cost Data.The average total cost of producing 5 purses is:

Scale is the size of a firm's operations.

Use the following to answer question: -(Figure: Long-Run Average Cost) Use Figure: Long-Run Average Cost.This firm has _____ in the output region from B to C.

The level of inputs a firm employs will determine a firm's:

Variable cost divided by the quantity of output produced is _____ cost.

Use the following to answer question: -(Table: Costs of Birthday Cakes) Use Table: Costs of Birthday Cakes.Assume that fixed costs are $10.What is the average fixed cost of 5 cakes?

An input whose quantity CANNOT be changed in the short run is:

Use the following to answer question: -(Figure: Long-Run Average Cost) Use Figure: Long-Run Average Cost.This firm has _____ in the output region from B to C.

A business produces 10 pairs of eyeglasses.It incurs $30 in average variable cost and $35 in average total cost.The total fixed cost of producing 10 pairs of eyeglasses is:

If two firms are identical in all respects except that one has more of the fixed input capital than another,the total product curve for the firm with more capital:

Use the following to answer question: -(Table: Costs of Producing Bagels) Use Table: Cost of Producing Bagels.The marginal cost of producing the sixth bagel is:

Suppose the marginal cost curve in the short run first decreases and then increases.If marginal cost is increasing,_ must be _.

Use the following to answer question: -(Figure: The Average Total Cost Curve) Use Figure: The Average Total Cost Curve.The total cost of producing 10 pairs of boots is approximately:

The marginal product of labor is the:

Farmers in the United States grow about three times as much wheat per acre as do farmers in Western Europe.

Janet's poodle grooming salon has a total cost curve expressed by the equation TC = 100 + 3Q²,where Q is the quantity of dogs groomed.Janet notices that,as she grooms more dogs,her total cost curve:

When a firm adds capital,in the short run variable costs for any level of output will:

When returns are diminishing,the marginal cost curve is upward-sloping.