Question 1

Harry's Hotdogs is a small street vendor business owned by Harry Huggins.Harry is trying to get a better understanding of his costs by categorizing them as fixed or variable.Which of the following costs are most likely to be considered fixed costs?

Accepted Answer

A)   the cost of mustard
B)   the cost of hotdog buns
C)   wages paid to workers who sell hot dogs
D)   the cost of bookkeeping servicesE) A) and C)
F) All of the above

Question 2

Consider a small family wheat farm.List some examples of implicit costs of farming.

Accepted Answer

the lost earnings of any famil...

Question 3

Table 13-6
Wooden Chair Factory
 
-Refer to Table 13-6.The Wooden Chair Factory experiences diminishing marginal product of labor with the addition of which worker?

Accepted Answer

A)   the third worker
B)   the fourth worker
C)   the fifth worker
D)   the sixth workerE) B) and D)
F) All of the above

Question 4

Diminishing marginal product exists when the production function becomes flatter as inputs increase.

Accepted Answer

A) True 
 B)False

Question 5

An example of an explicit cost of production would be the

Accepted Answer

A)   cost of forgone labor earnings for an entrepreneur.
B)   lost opportunity to invest in capital markets when the money is invested in one's business.
C)   lease payments for the land on which a firm's factory stands.
D)   Both a and c are correct.E) B) and C)
F) None of the above

Question 6

When comparing short-run average total cost with long-run average total cost at a given level of output,

Accepted Answer

A)   short-run average total cost is typically above long-run average total cost.
B)   short-run average total cost is typically the same as long-run average total cost.
C)   short-run average total cost is typically below long-run average total cost.
D)   the relationship between short-run and long-run average total cost follows no clear pattern.E) None of the above
F) A) and B)

Question 7

Table 13-15
Consider the following table of long-run total cost for four different firms:
 
-Refer to Table 13-13.Which firm has diseconomies of scale over the entire range of output?

Accepted Answer

A)   Firm 1 only
B)   Firms 1 and 2 only
C)   Firm 3 only
D)   Firm 4 onlyE) A) and D)
F) None of the above

Question 8

Diseconomies of scale occur when

Accepted Answer

A)   average fixed costs are falling.
B)   average fixed costs are constant.
C)   long-run average total costs rise as output increases.
D)   long-run average total costs fall as output increases.E) A) and B)
F) B) and D)

Question 9

Table 13-7
The Flying Elvis Copter Rides
 
-Refer to Table 13-7.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

Economists assume that the goal of the firm is to maximize total

Accepted Answer

A)   revenue.
B)   profits.
C)   costs.
D)   satisfaction.E) A) and B)
F) A) and C)

Question 11

If the total cost curve gets steeper as output increases,the firm is experiencing

Accepted Answer

A)   diseconomies of scale.
B)   economies of scale.
C)   diminishing marginal product.
D)   increasing marginal product.E) B) and C)
F) A) and D)

Question 12

Foregone investment opportunities are an example of

Accepted Answer

A)   an explicit cost.
B)   an implicit cost.
C)   revenues.
D)   profits.E) A) and B)
F) A) and D)

Question 13

Table 13-11
Teacher's Helper is a small company that has a subcontract to produce instructional materials for disabled children in public school districts.The owner rents several small rooms in an office building in the suburbs for $600 a month and has leased computer equipment that costs $480 a month.
 
-Refer to Table 13-11.What is the average variable cost for the month if 6 instructional modules are produced?

Accepted Answer

A)   $180.00
B)   $533.33
C)   $700.00
D)   $713.33E) A) and C)
F) A) and D)

Question 14

Table 13-12
Betty's Bakery
 
-Refer to Table 13-12.What is the total cost of producing 2 cakes at Betty's Bakery?

Accepted Answer

A)   $48
B)   $53
C)   $58
D)   $62E) All of the above
F) A) and B)

Question 15

Which of the following costs do not vary with the amount of output a firm produces?

Accepted Answer

A)   average fixed costs
B)   fixed costs and average fixed costs
C)   marginal costs and average fixed costs
D)   fixed costsE) A) and B)
F) All of the above

Question 16

Figure 13-5 
-Refer to Figure 13-5.Which curve is most likely to represent average total cost?

Accepted Answer

A)   A
B)   B
C)   C
D)   DE) A) and B)
F) A) and C)

Question 17

Table 13-13
 
-Refer to Table 13-13.What is average variable cost when output is 50 units?

Accepted Answer

A)   $3.60
B)   $4.00
C)   $4.40
D)   $4.80E) A) and B)
F) B) and C)

Question 18

The length of the short run

Accepted Answer

A)   is different for different types of firms.
B)   can never exceed 3 years.
C)   can never exceed 1 year.
D)   is always less than 6 months.E) A) and C)
F) A) and B)

Question 19

Brady Industries has average variable costs of $1 and average total costs of $3 when it produces 500 units of output.The firm's total fixed costs equal

Accepted Answer

A)   $2.
B)   $4.
C)   $1,000.
D)   $2,000.E) All of the above
F) A) and C)

Question 20

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 C)
F) A) and B)

Exam 13: The Costs of Production

Which of the following costs do not vary with the amount of output a firm produces?

Correct Answer
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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
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Table 13-15 Consider the following table of long-run total cost for four different firms: -Refer to Table 13-13.Which firm has diseconomies of scale over the entire range of output?

Correct Answer
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Diseconomies of scale occur when

Correct Answer
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Diminishing marginal product exists when the production function becomes flatter as inputs increase.

Correct Answer
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Table 13-7 The Flying Elvis Copter Rides -Refer to Table 13-7.What is the value of A?

Correct Answer
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When comparing short-run average total cost with long-run average total cost at a given level of output,

Correct Answer
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An example of an explicit cost of production would be the

Correct Answer
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Consider a small family wheat farm.List some examples of implicit costs of farming.

Correct Answer
verified
the lost earnings of any famil...
View Answer

Harry's Hotdogs is a small street vendor business owned by Harry Huggins.Harry is trying to get a better understanding of his costs by categorizing them as fixed or variable.Which of the following costs are most likely to be considered fixed costs?

Correct Answer
verified

Economists assume that the goal of the firm is to maximize total

Correct Answer
verified

Figure 13-5 -Refer to Figure 13-5.Which curve is most likely to represent average total cost?

Correct Answer
verified

Table 13-13 -Refer to Table 13-13.What is average variable cost when output is 50 units?

Correct Answer
verified

Table 13-12 Betty's Bakery -Refer to Table 13-12.What is the total cost of producing 2 cakes at Betty's Bakery?

Correct Answer
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The length of the short run

Correct Answer
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Correct Answer
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Table 13-6 Wooden Chair Factory -Refer to Table 13-6.The Wooden Chair Factory experiences diminishing marginal product of labor with the addition of which worker?

Correct Answer
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If the total cost curve gets steeper as output increases,the firm is experiencing

Correct Answer
verified

Foregone investment opportunities are an example of

Correct Answer
verified

Brady Industries has average variable costs of $1 and average total costs of $3 when it produces 500 units of output.The firm's total fixed costs equal

Correct Answer
verified

Exam 13: The Costs of Production

Which of the following costs do not vary with the amount of output a firm produces?

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 13-15 Consider the following table of long-run total cost for four different firms: -Refer to Table 13-13.Which firm has diseconomies of scale over the entire range of output?

Correct AnswerverifiedShow Answer

Diseconomies of scale occur when

Correct AnswerverifiedShow Answer

Diminishing marginal product exists when the production function becomes flatter as inputs increase.

Correct AnswerverifiedShow Answer

Table 13-7 The Flying Elvis Copter Rides -Refer to Table 13-7.What is the value of A?

Correct AnswerverifiedShow Answer

When comparing short-run average total cost with long-run average total cost at a given level of output,

Correct AnswerverifiedShow Answer

An example of an explicit cost of production would be the

Correct AnswerverifiedShow Answer

Consider a small family wheat farm.List some examples of implicit costs of farming.

Correct Answerverifiedthe lost earnings of any famil...View AnswerShow Answer

Harry's Hotdogs is a small street vendor business owned by Harry Huggins.Harry is trying to get a better understanding of his costs by categorizing them as fixed or variable.Which of the following costs are most likely to be considered fixed costs?

Correct AnswerverifiedShow Answer

Economists assume that the goal of the firm is to maximize total

Correct AnswerverifiedShow Answer

Figure 13-5 -Refer to Figure 13-5.Which curve is most likely to represent average total cost?

Correct AnswerverifiedShow Answer

Table 13-13 -Refer to Table 13-13.What is average variable cost when output is 50 units?

Correct AnswerverifiedShow Answer

Table 13-12 Betty's Bakery -Refer to Table 13-12.What is the total cost of producing 2 cakes at Betty's Bakery?

Correct AnswerverifiedShow Answer

The length of the short run

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 13-6 Wooden Chair Factory -Refer to Table 13-6.The Wooden Chair Factory experiences diminishing marginal product of labor with the addition of which worker?

Correct AnswerverifiedShow Answer

If the total cost curve gets steeper as output increases,the firm is experiencing

Correct AnswerverifiedShow Answer

Foregone investment opportunities are an example of

Correct AnswerverifiedShow Answer

Brady Industries has average variable costs of $1 and average total costs of $3 when it produces 500 units of output.The firm's total fixed costs equal

Correct AnswerverifiedShow Answer

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the lost earnings of any famil...
View Answer

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