Question 1

Table 13-20
Listed in the table are the long-run total costs for three different firms.
 
-Refer to Table 13-20. Firm A is experiencing constant returns to scale.

Accepted Answer

A) True 
 B)False

Question 2

The Carolina Christmas Tree Corporation grows and sells 500 Christmas trees. The average cost of production per tree is $50. Each tree sells for a price of $65. The Carolina Christmas Tree Corporation's total revenues are

Accepted Answer

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

Question 3

A total-cost curve shows the relationship between the

Accepted Answer

A)   quantity of an input used and the total cost of production.
B)   quantity of output produced and the total cost of production.
C)   total cost of production and profit.
D)   total cost of production and total revenue.E) All of the above
F) B) and D)

Question 4

Economists normally assume that the goal of a firm is to earn (i)  profits as large as possible, even if it means reducing output.
(ii)  profits as large as possible, even if it means incurring a higher total cost.
(iii)  revenues as large as possible, even if it reduces profits.

Accepted Answer

A)   (i)  and (ii)  only
B)   (i)  and (iii)  only
C)   (ii)  and (iii)  only
D)   (i) , (ii) , and (iii) E) A) and B)
F) None of the above

Question 5

Table 13-4
Charles's Math Tutoring
 
-Refer to Table 13-4. Charles's math tutoring company experiences diminishing marginal productivity with the addition of the

Accepted Answer

A)   first worker.
B)   second worker.
C)   third worker.
D)   fourth worker.E) A) and D)
F) B) and C)

Question 6

Table 13-18
 
-Refer to Table 13-18. What is the average total cost of producing 525 units of output?

Accepted Answer

ATC = TC/Q...

Question 7

In his book, An Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith credits economies of scale to

Accepted Answer

A)   competition.
B)   opportunity costs.
C)   specialization.
D)   incentives.E) A) and C)
F) A) and B)

Question 8

Table 13-19
 
-Refer to Table 13-19. What is the marginal product of the sixth worker?

Accepted Answer

Total output of four workers =...

Question 9

A difference between explicit and implicit costs is that

Accepted Answer

A)   explicit costs must be greater than implicit costs.
B)   explicit costs do not require a direct monetary outlay by the firm, whereas implicit costs do.
C)   implicit costs do not require a direct monetary outlay by the firm, whereas explicit costs do.
D)   implicit costs must be greater than explicit costs.E) A) and B)
F) A) and C)

Question 10

Table 13-3
 
-Refer to Table 13-3. At which number of workers does diminishing marginal product begin?

Accepted Answer

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

Question 11

When calculating a firm's profit, an economist will subtract only

Accepted Answer

A)   explicit costs from total revenue because these are the only costs that can be measured explicitly.
B)   implicit costs from total revenue because these include both the costs that can be directly measured as well as the costs that can be indirectly measured.
C)   the opportunity costs from total revenue because these include both the implicit and explicit costs of the firm.
D)   the marginal cost because the cost of the next unit is the only relevant cost.E) None of the above
F) A) and D)

Question 12

Figure 13-1 
-Refer to Figure 13-1. Which of the following could explain why the total product curve would shift from TP1 to TP2?

Accepted Answer

A)   There is less capital equipment available to the firm.
B)   Labor skills have become rusty and outdated in the firm.
C)   The firm has developed improved production technology.
D)   The firm is now receiving a higher price for its product.E) B) and D)
F) B) and C)

Question 13

Consider a small hair styling salon. List some examples of implicit costs of this business.

Accepted Answer

the lost earnings of the owner...

Question 14

Scenario 13-3
Kachina is a senior majoring in graphic design at Awesome University (AU) . While she has been attending college, Kachina started a computer consulting business to help senior citizens learn how to use their iPads. Kachina charges $25 per hour for her consulting services. She also works 5 hours a week for the Economics Department to maintain that department's Web page. The Economics Department pays Kachina $20 per hour.
-Refer to Scenario 13-3. If Kachina can work additional hours at either job, what is the opportunity cost if she spends one hour reading a novel?

Accepted Answer

A)   $20
B)   $25
C)   $100
D)   $125E) A) and B)
F) C) and D)

Question 15

When average total cost rises if a producer either increases or decreases production, then the firm is said to be operating at efficient scale.

Accepted Answer

A) True 
 B)False

Question 16

Scenario 13-2
Chelsea wants to start her own Christmas ornament business. She can purchase a suitable factory that costs $100,000. Chelsea currently has $150,000 in the bank earning 3 percent interest per year.
-Refer to Scenario 13-2. Suppose Chelsea purchases the factory using $50,000 of her own money and $50,000 borrowed from a bank at an interest rate of 6 percent. What is Chelsea's annual opportunity cost of purchasing the factory?

Accepted Answer

A)   $2,000
B)   $3,000
C)   $4,500
D)   $5,000E) A) and C)
F) A) and B)

Question 17

Marcus sells 300 candy bars at $0.50 each. His total costs are $125. His profits are

Accepted Answer

A)   $25.
B)   $124.50.
C)   $125.
D)   $150.E) A) and B)
F) A) and C)

Question 18

Scenario 13-15
Joan grows pumpkins. If Joan plants no seeds on her farm, she gets no harvest. If she plants 1 bag of seeds, she gets 500 pumpkins. If she plants 2 bags, she gets 800 pumpkins. If she plants 3 bags, she gets 900 pumpkins. A bag of seeds costs $100, and seeds are her only cost.
-Refer to Scenario 13-15. Joan's production function exhibits

Accepted Answer

A)   increasing marginal product.
B)   decreasing marginal product.
C)   constant marginal product.
D)   Any of the above could be correct.E) B) and D)
F) All of the above

Question 19

Table 13-19
 
-Refer to Table 13-19. What is the average variable cost of producing 400 units of output?

Accepted Answer

AVC = VC/Q...

Question 20

Suppose that for a particular business there are no implicit costs. Then

Accepted Answer

A)   accounting profit will be greater than economic profit.
B)   accounting profit will be the same as economic profit.
C)   accounting profit will be less than economic profit.
D)   the relationship between accounting profit and economic profit cannot be determined without more information.E) B) and C)
F) B) and D)

Exam 13: The Costs of Production

Figure 13-1 -Refer to Figure 13-1. Which of the following could explain why the total product curve would shift from TP1 to TP2?

Correct Answer
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Economists normally assume that the goal of a firm is to earn (i) profits as large as possible, even if it means reducing output. (ii) profits as large as possible, even if it means incurring a higher total cost. (iii) revenues as large as possible, even if it reduces profits.

Correct Answer
verified

Suppose that for a particular business there are no implicit costs. Then

Correct Answer
verified

In his book, An Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith credits economies of scale to

Correct Answer
verified

A total-cost curve shows the relationship between the

Correct Answer
verified

When calculating a firm's profit, an economist will subtract only

Correct Answer
verified

Correct Answer
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Table 13-20 Listed in the table are the long-run total costs for three different firms. -Refer to Table 13-20. Firm A is experiencing constant returns to scale.

Correct Answer
verified

Table 13-4 Charles's Math Tutoring -Refer to Table 13-4. Charles's math tutoring company experiences diminishing marginal productivity with the addition of the

Correct Answer
verified

Table 13-19 -Refer to Table 13-19. What is the average variable cost of producing 400 units of output?

Correct Answer
verified
AVC = VC/Q...
View Answer

Correct Answer
verified

Correct Answer
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Table 13-3 -Refer to Table 13-3. At which number of workers does diminishing marginal product begin?

Correct Answer
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Table 13-18 -Refer to Table 13-18. What is the average total cost of producing 525 units of output?

Correct Answer
verified
ATC = TC/Q...
View Answer

A difference between explicit and implicit costs is that

Correct Answer
verified

The Carolina Christmas Tree Corporation grows and sells 500 Christmas trees. The average cost of production per tree is $50. Each tree sells for a price of $65. The Carolina Christmas Tree Corporation's total revenues are

Correct Answer
verified

Table 13-19 -Refer to Table 13-19. What is the marginal product of the sixth worker?

Correct Answer
verified
Total output of four workers =...
View Answer

Marcus sells 300 candy bars at $0.50 each. His total costs are $125. His profits are

Correct Answer
verified

When average total cost rises if a producer either increases or decreases production, then the firm is said to be operating at efficient scale.

Correct Answer
verified

Consider a small hair styling salon. List some examples of implicit costs of this business.

Correct Answer
verified
the lost earnings of the owner...
View Answer

Exam 13: The Costs of Production

Figure 13-1 -Refer to Figure 13-1. Which of the following could explain why the total product curve would shift from TP1 to TP2?

Correct AnswerverifiedShow Answer

Economists normally assume that the goal of a firm is to earn (i) profits as large as possible, even if it means reducing output. (ii) profits as large as possible, even if it means incurring a higher total cost. (iii) revenues as large as possible, even if it reduces profits.

Correct AnswerverifiedShow Answer

Suppose that for a particular business there are no implicit costs. Then

Correct AnswerverifiedShow Answer

In his book, An Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith credits economies of scale to

Correct AnswerverifiedShow Answer

A total-cost curve shows the relationship between the

Correct AnswerverifiedShow Answer

When calculating a firm's profit, an economist will subtract only

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 13-20 Listed in the table are the long-run total costs for three different firms. -Refer to Table 13-20. Firm A is experiencing constant returns to scale.

Correct AnswerverifiedShow Answer

Table 13-4 Charles's Math Tutoring -Refer to Table 13-4. Charles's math tutoring company experiences diminishing marginal productivity with the addition of the

Correct AnswerverifiedShow Answer

Table 13-19 -Refer to Table 13-19. What is the average variable cost of producing 400 units of output?

Correct AnswerverifiedAVC = VC/Q...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 13-3 -Refer to Table 13-3. At which number of workers does diminishing marginal product begin?

Correct AnswerverifiedShow Answer

Table 13-18 -Refer to Table 13-18. What is the average total cost of producing 525 units of output?

Correct AnswerverifiedATC = TC/Q...View AnswerShow Answer

A difference between explicit and implicit costs is that

Correct AnswerverifiedShow Answer

The Carolina Christmas Tree Corporation grows and sells 500 Christmas trees. The average cost of production per tree is $50. Each tree sells for a price of $65. The Carolina Christmas Tree Corporation's total revenues are

Correct AnswerverifiedShow Answer

Table 13-19 -Refer to Table 13-19. What is the marginal product of the sixth worker?

Correct AnswerverifiedTotal output of four workers =...View AnswerShow Answer

Marcus sells 300 candy bars at $0.50 each. His total costs are $125. His profits are

Correct AnswerverifiedShow Answer

When average total cost rises if a producer either increases or decreases production, then the firm is said to be operating at efficient scale.

Correct AnswerverifiedShow Answer

Consider a small hair styling salon. List some examples of implicit costs of this business.

Correct Answerverifiedthe lost earnings of the owner...View AnswerShow Answer

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
verified
AVC = VC/Q...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
ATC = TC/Q...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Total output of four workers =...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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the lost earnings of the owner...
View Answer