Question 1

Table 13-12
Betty's Bakery
 
-Refer to Table 13-12.What is the average variable cost of producing 6 cakes at Betty's Bakery?

Accepted Answer

A)   $16
B)   $17
C)   $18
D)   $19E) A) and C)
F) B) and C)

Question 2

Scenario 13-9
Jessica makes photo frames. She spends $5 on the materials for each photo frame. She can create one photo frame in an hour. She earns $10 per hour at a part-time job at the local coffee shop. She can sell a photo frame for $30 each.
-Refer to Scenario 13-9.An accountant would calculate the total cost for one photo frame to be

Accepted Answer

A)   $5.
B)   $10.
C)   $15.
D)   $25.E) All of the above
F) None of the above

Question 3

Variable costs usually change as the firm alters the quantity of output produced.

Accepted Answer

A) True 
 B)False

Question 4

If Franco's Pizza Parlor knows that the marginal cost of the 500ᵗʰ pizza is $3.50 and that the average total cost of making 499 pizzas is $3.30,then

Accepted Answer

A)   average total costs are rising at Q = 500.
B)   average total costs are falling at Q = 500.
C)   total costs are falling at Q = 500.
D)   average variable costs must be falling.E) C) and D)
F) B) and D)

Question 5

Figure 13-8
 
-Refer to Figure 13-8.Quantity B represents the output level where the firm

Accepted Answer

A)   maximizes profits.
B)   minimizes average variable costs.
C)   produces at the efficient scale.
D)   minimizes marginal costs.E) A) and D)
F) All of the above

Question 6

Table 13-14
Listed in the table are the long-run total costs for three different firms.
 
-Refer to Table 13-14.Which firm is experiencing diseconomies of scale?

Accepted Answer

A)   Firm A only
B)   Firm B only
C)   Firm C only
D)   Firm A and Firm B onlyE) All of the above
F) B) and D)

Question 7

Figure 13-2
 
-Refer to Figure 13-2.If the figure represented production at a cookie factory,the factory would be experiencing

Accepted Answer

A)   diminishing marginal product of workers.
B)   diminishing marginal cost of cookie production.
C)   decreasing cost of cookie production.
D)   decreasing output of cookies.E) A) and B)
F) None of the above

Question 8

Table 13-4
Charles's Math Tutoring
 
-Refer to Table 13-4.Suppose that Charles's math tutoring company has a fixed cost of $50 per month for his cell phone.Each worker costs Charles $60 per day.As output increases from 0 to 45 students,Charles's total cost curve

Accepted Answer

A)   increases but gets flatter.
B)   increases and gets steeper.
C)   decreases and gets flatter.
D)   decreases but gets steeper.E) A) and D)
F) C) and D)

Question 9

Scenario 13-3
Gary is a senior majoring in computer network development at Smart State University. While he has been attending college, Gary started a computer consulting business to help senior citizens set up their network connections and teach them how to use e-mail. Gary charges $25 per hour for his consulting services. Gary also works 5 hours a week for the Economics Department to maintain that department's Web page. The Economics Department pays Gary $20 per hour.
-Refer to Scenario 13-3.If Gary can work additional hours at either job,what is the opportunity cost if Gary spends one hour reading a novel?

Accepted Answer

A)   $20
B)   $25
C)   $100
D)   $125E) A) and B)
F) All of the above

Question 10

Assume a certain firm regards the number of workers it employs as variable but regards the size of its factory as fixed.This assumption is often realistic

Accepted Answer

A)   in the short run but not in the long run.
B)   in the long run but not in the short run.
C)   both in the short run and in the long run.
D)   neither in the short run nor in the long run.E) A) and C)
F) None of the above

Question 11

Figure 13-9
The figure below depicts average total cost functions for a firm that produces automobiles.
 
-Refer to Figure 13-9.This firm experiences diseconomies of scale at what output levels?

Accepted Answer

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

Question 12

Diminishing marginal product suggests that

Accepted Answer

A)   additional units of output become less costly as more output is produced.
B)   marginal cost is upward sloping.
C)   the firm is at full capacity.
D)   adding additional workers will lower total cost.E) All of the above
F) A) and D)

Question 13

Table 13-3
 
-Refer to Table 13-3.If the firm can sell its output for $1 per unit,what is the profit-maximizing level of output?

Accepted Answer

A)   240 units
B)   230 units
C)   190 units
D)   170 unitsE) B) and C)
F) B) and D)

Question 14

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

Accepted Answer

The opportunity cost of an ite...

Question 15

Economists normally assume that the goal of a firm is to
(i) sell as much of its product as possible.
(ii) set the price of the product as high as possible.
(iii) maximize profit.

Accepted Answer

A)   (i)  and (ii)  only
B)   (ii)  and (iii)  only
C)   (iii)  only
D)   (i) , (ii) , and (iii) E) B) and D)
F) B) and C)

Question 16

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

Accepted Answer

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

Question 17

Average total cost equals

Accepted Answer

A)   change in total costs divided by quantity produced.
B)   change in total costs divided by change in quantity produced.
C)   (fixed costs + variable costs)  divided by quantity produced.
D)   (fixed costs + variable costs)  divided by change in quantity produced.E) B) and C)
F) A) and D)

Question 18

The shape of the total-cost curve is inversely related to the shape of the production function.

Accepted Answer

A) True 
 B)False

Question 19

Gloria has decided to start her own snow removal business.To purchase the necessary equipment,Gloria withdrew $2,000 from her savings account,which was earning 3% interest,and borrowed an additional $4,000 from the bank at an interest rate of 7%.What is Gloria's annual opportunity cost of the financial capital that has been invested in the business?

Accepted Answer

A)   $60
B)   $280
C)   $340
D)   $660E) All of the above
F) A) and B)

Question 20

Constant returns to scale occur when a firm's

Accepted Answer

A)   marginal costs are constant as output increases.
B)   long-run average total costs are decreasing as output increases.
C)   long-run average total costs are increasing as output increases.
D)   long-run average total costs do not vary as output increases.E) A) and B)
F) A) and C)

Exam 13: The Costs of Production.

Table 13-12 Betty's Bakery -Refer to Table 13-12.What is the average variable cost of producing 6 cakes at Betty's Bakery?

Correct Answer
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Correct Answer
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Economists normally assume that the goal of a firm is to (i) sell as much of its product as possible. (ii) set the price of the product as high as possible. (iii) maximize profit.

Correct Answer
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Correct Answer
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Assume a certain firm regards the number of workers it employs as variable but regards the size of its factory as fixed.This assumption is often realistic

Correct Answer
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Table 13-3 -Refer to Table 13-3.If the firm can sell its output for $1 per unit,what is the profit-maximizing level of output?

Correct Answer
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Correct Answer
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Average total cost equals

Correct Answer
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Figure 13-8 -Refer to Figure 13-8.Quantity B represents the output level where the firm

Correct Answer
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If Franco's Pizza Parlor knows that the marginal cost of the 500ᵗʰ pizza is $3.50 and that the average total cost of making 499 pizzas is $3.30,then

Correct Answer
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Constant returns to scale occur when a firm's

Correct Answer
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Figure 13-9 The figure below depicts average total cost functions for a firm that produces automobiles. -Refer to Figure 13-9.This firm experiences diseconomies of scale at what output levels?

Correct Answer
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Table 13-4 Charles's Math Tutoring -Refer to Table 13-4.Suppose that Charles's math tutoring company has a fixed cost of $50 per month for his cell phone.Each worker costs Charles $60 per day.As output increases from 0 to 45 students,Charles's total cost curve

Correct Answer
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Figure 13-2 -Refer to Figure 13-2.If the figure represented production at a cookie factory,the factory would be experiencing

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

Correct Answer
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Table 13-14 Listed in the table are the long-run total costs for three different firms. -Refer to Table 13-14.Which firm is experiencing diseconomies of scale?

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

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

The shape of the total-cost curve is inversely related to the shape of the production function.

Correct Answer
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Diminishing marginal product suggests that

Correct Answer
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Variable costs usually change as the firm alters the quantity of output produced.

Correct Answer
verified

Exam 13: The Costs of Production.

Table 13-12 Betty's Bakery -Refer to Table 13-12.What is the average variable cost of producing 6 cakes at Betty's Bakery?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Economists normally assume that the goal of a firm is to (i) sell as much of its product as possible. (ii) set the price of the product as high as possible. (iii) maximize profit.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Assume a certain firm regards the number of workers it employs as variable but regards the size of its factory as fixed.This assumption is often realistic

Correct AnswerverifiedShow Answer

Table 13-3 -Refer to Table 13-3.If the firm can sell its output for $1 per unit,what is the profit-maximizing level of output?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Average total cost equals

Correct AnswerverifiedShow Answer

Figure 13-8 -Refer to Figure 13-8.Quantity B represents the output level where the firm

Correct AnswerverifiedShow Answer

If Franco's Pizza Parlor knows that the marginal cost of the 500ᵗʰ pizza is $3.50 and that the average total cost of making 499 pizzas is $3.30,then

Correct AnswerverifiedShow Answer

Constant returns to scale occur when a firm's

Correct AnswerverifiedShow Answer

Figure 13-9 The figure below depicts average total cost functions for a firm that produces automobiles. -Refer to Figure 13-9.This firm experiences diseconomies of scale at what output levels?

Correct AnswerverifiedShow Answer

Table 13-4 Charles's Math Tutoring -Refer to Table 13-4.Suppose that Charles's math tutoring company has a fixed cost of $50 per month for his cell phone.Each worker costs Charles $60 per day.As output increases from 0 to 45 students,Charles's total cost curve

Correct AnswerverifiedShow Answer

Figure 13-2 -Refer to Figure 13-2.If the figure represented production at a cookie factory,the factory would be experiencing

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Table 13-14 Listed in the table are the long-run total costs for three different firms. -Refer to Table 13-14.Which firm is experiencing diseconomies of scale?

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

The shape of the total-cost curve is inversely related to the shape of the production function.

Correct AnswerverifiedShow Answer

Diminishing marginal product suggests that

Correct AnswerverifiedShow Answer

Variable costs usually change as the firm alters the quantity of output produced.

Correct AnswerverifiedShow Answer

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The opportunity cost of an ite...
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