Question 1

When a firm experiences economies of scale,long-run average total cost falls as the quantity of output increases.

Accepted Answer

A) True 
 B)False

Question 2

Table 12-3
 
-Refer to Table 12-3.At which number of workers does diminishing marginal product begin?

Accepted Answer

A)   1
B)   2
C)   3
D)   4E) A) and D)
F) C) and D)

Question 3

Figure 12-5 
-Refer to Figure 12-5.Curve A is always declining because

Accepted Answer

A)   of diminishing marginal product.
B)   we are dividing fixed costs by higher and higher levels of output.
C)   marginal product first increases,then decreases.
D)   marginal product first decreases,then increases.E) A) and B)
F) None of the above

Question 4

Suppose that for a particular firm the only variable input into the production process is labor and that output equals zero when no workers are hired.In addition,suppose that when the firm hires 2 workers,the total cost of production is $100.When the firm hires 3 workers,the total cost of production is $120.In addition,assume that the variable cost per unit of labor is the same regardless of the number of units of labor that are hired.What is the firm's fixed cost?

Accepted Answer

A)   $40
B)   $60
C)   $80
D)   $100E) A) and B)
F) A) and C)

Question 5

Table 12-9
 
-Refer to Table 12-9.The total cost of producing 1 poster is

Accepted Answer

A)   $1.00.
B)   $10.00.
C)   $11.00.
D)   $22.00.E) C) and D)
F) None of the above

Question 6

Trevor's Tire Company produced and sold 500 tires.The average cost of production per tire was $50.Each tire sold for a price of $65.Trevor's Tire Company's total profits are

Accepted Answer

A)   $7,500.
B)   $25,000.
C)   $32,500.
D)   $67,500.E) A) and C)
F) B) and D)

Question 7

Figure 12-9
The figure below depicts average total cost functions for a firm that produces automobiles. 
-Refer to Figure 12-9.The firm experiences constant returns to scale at which output levels?

Accepted Answer

A)   output levels less than M
B)   output levels between M and N
C)   output levels greater than N
D)   All of the above are correct as long as the firm is operating in the long run.E) A) and B)
F) A) and C)

Question 8

Profit is defined as

Accepted Answer

A)   net revenue minus depreciation.
B)   total revenue minus total cost.
C)   average revenue minus average total cost.
D)   marginal revenue minus marginal cost.E) C) and D)
F) A) and B)

Question 9

Table 12-7
The Flying Elvis Copter Rides
 
-Refer to Table 12-7.What is the value of A?

Accepted Answer

A)   $25
B)   $50
C)   $100
D)   $200E) A) and B)
F) A) and C)

Question 10

What are opportunity costs? How do explicit and implicit costs relate to opportunity costs?

Accepted Answer

The opportunity cost of an ite...

Question 11

A local potato chip company plans to operate out of its current factory,which is estimated to last 25 years.All cost decisions it makes during the 25-year period

Accepted Answer

A)   are short-run decisions.
B)   are long-run decisions.
C)   involve only maintenance of the factory.
D)   are zero because the cost decisions were made at the beginning of the business.E) B) and C)
F) A) and C)

Question 12

Marginal cost tells us the

Accepted Answer

A)   value of all resources used in a production process.
B)   marginal increment to profitability when price is constant.
C)   amount by which total cost rises when output is increased by one unit.
D)   amount by which output rises when labor is increased by one unit.E) None of the above
F) B) and C)

Question 13

The amount of money that a wheat farmer could have earned if he had planted barley instead of wheat is

Accepted Answer

A)   an explicit cost.
B)   an accounting cost
C)   an implicit cost.
D)   forgone accounting profit.E) None of the above
F) A) and D)

Exam 12: The Costs of Production

Table 12-9 -Refer to Table 12-9.The total cost of producing 1 poster is

Correct Answer
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What are opportunity costs? How do explicit and implicit costs relate to opportunity costs?

Correct Answer
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The opportunity cost of an ite...
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Trevor's Tire Company produced and sold 500 tires.The average cost of production per tire was $50.Each tire sold for a price of $65.Trevor's Tire Company's total profits are

Correct Answer
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Table 12-3 -Refer to Table 12-3.At which number of workers does diminishing marginal product begin?

Correct Answer
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Correct Answer
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Marginal cost tells us the

Correct Answer
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The amount of money that a wheat farmer could have earned if he had planted barley instead of wheat is

Correct Answer
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Table 12-7 The Flying Elvis Copter Rides -Refer to Table 12-7.What is the value of A?

Correct Answer
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Profit is defined as

Correct Answer
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Figure 12-5 -Refer to Figure 12-5.Curve A is always declining because

Correct Answer
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Figure 12-9 The figure below depicts average total cost functions for a firm that produces automobiles. -Refer to Figure 12-9.The firm experiences constant returns to scale at which output levels?

Correct Answer
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A local potato chip company plans to operate out of its current factory,which is estimated to last 25 years.All cost decisions it makes during the 25-year period

Correct Answer
verified

When a firm experiences economies of scale,long-run average total cost falls as the quantity of output increases.

Correct Answer
verified

Exam 12: The Costs of Production

Table 12-9 -Refer to Table 12-9.The total cost of producing 1 poster is

Correct AnswerverifiedShow Answer

What are opportunity costs? How do explicit and implicit costs relate to opportunity costs?

Correct AnswerverifiedThe opportunity cost of an ite...View AnswerShow Answer

Trevor's Tire Company produced and sold 500 tires.The average cost of production per tire was $50.Each tire sold for a price of $65.Trevor's Tire Company's total profits are

Correct AnswerverifiedShow Answer

Table 12-3 -Refer to Table 12-3.At which number of workers does diminishing marginal product begin?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Marginal cost tells us the

Correct AnswerverifiedShow Answer

The amount of money that a wheat farmer could have earned if he had planted barley instead of wheat is

Correct AnswerverifiedShow Answer

Table 12-7 The Flying Elvis Copter Rides -Refer to Table 12-7.What is the value of A?

Correct AnswerverifiedShow Answer

Profit is defined as

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Figure 12-5 -Refer to Figure 12-5.Curve A is always declining because

Correct AnswerverifiedShow Answer

Figure 12-9 The figure below depicts average total cost functions for a firm that produces automobiles. -Refer to Figure 12-9.The firm experiences constant returns to scale at which output levels?

Correct AnswerverifiedShow Answer

A local potato chip company plans to operate out of its current factory,which is estimated to last 25 years.All cost decisions it makes during the 25-year period

Correct AnswerverifiedShow Answer

When a firm experiences economies of scale,long-run average total cost falls as the quantity of output increases.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
The opportunity cost of an ite...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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