Question 1

​Table 13-16 
-Refer to Table 13-16. What is the fixed cost of producing 0 units of output?​

Accepted Answer

A)  ​$0
B)  ​$12
C)  ​$24
D)  ​$16E) A) and B)
F) A) and C)

Question 2

The total cost to the firm of producing zero units of output is

Accepted Answer

A)  zero in both the short run and the long run.
B)  its fixed cost in the short run and zero in the long run.
C)  its fixed cost in both the short run and the long run.
D)  its variable cost in both the short run and the long run.E) A) and B)
F) A) and C)

Question 3

Table 13-6
Wooden Chair Factory 
-Refer to Table 13-6. Each worker at the Wooden Chair Factory costs $12 per hour. The cost of each machine is $20 per day regardless of the number of chairs produced. If the factory produces at a rate of 70 chairs per hour and operates 8 hours per day, what is the factory's total labor cost per day?

Accepted Answer

A)  $72
B)  $112
C)  $576
D)  $616E) B) and D)
F) A) and B)

Question 4

Table 13-14 
-Refer to Table 13-14. What is the total cost of producing 2 units of output?

Accepted Answer

A)  $10
B)  $15
C)  $38
D)  $48E) A) and C)
F) B) and C)

Question 5

Table 13-18 
-Refer to Table 13-18. What is the shape of the average-variable-cost curve?

Accepted Answer

AVC = VC/Q, where VC is graphed on the v...

Question 6

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) A) and B)
F) A) and C)

Question 7

In the long run a company that produces and sells covers for cell phones incurs total costs of $2,500 when output is 1,250 covers and $4,000 when output is 1,500 covers. For this range of output, the cell phone cover company exhibits

Accepted Answer

A)  economies of scale.
B)  constant returns to scale.
C)  diseconomies of scale.
D)  efficient scale.E) A) and B)
F) A) and C)

Question 8

The production function depicts a relationship between which two variables? Also, draw a production function that exhibits diminishing marginal product.

Accepted Answer

The production function depict...

Question 9

Implicit costs

Accepted Answer

A)  do not require an outlay of money by the firm.
B)  do not enter into the economist's measurement of a firm's profit.
C)  are also known as variable costs.
D)  are not part of an economist's measurement of opportunity cost.E) None of the above
F) A) and B)

Question 10

Average total cost tells us the

Accepted Answer

A)  total cost of the first unit of output, if total cost is divided evenly over all the units produced.
B)  cost of a typical unit of output, if total cost is divided evenly over all the units produced.
C)  cost of the last unit of output, if total cost does not include a fixed cost component.
D)  variable cost of a firm that is producing at least one unit of output.E) B) and C)
F) A) and D)

Question 11

A firm produces 60 units of output with 5 workers, 65 units with 6 workers, and 68 units with 7 workers. The firm's production function exhibits diminishing marginal productivity between 5 and 7 workers.
​

Accepted Answer

A) True 
 B)False

Question 12

How long does it take a firm to go from the short run to the long run?

Accepted Answer

A)  six months
B)  one year
C)  two years
D)  It depends on the nature of the firm.E) B) and D)
F) C) and D)

Question 13

Average total cost is increasing whenever

Accepted Answer

A)  total cost is increasing.
B)  marginal cost is increasing.
C)  marginal cost is less than average total cost.
D)  marginal cost is greater than average total cost.E) A) and B)
F) A) and C)

Question 14

Diminishing marginal productivity implies decreasing total product.

Accepted Answer

A) True 
 B)False

Question 15

Table 13-14 
-Refer to Table 13-14. What is the variable cost of producing 8 units of output?

Accepted Answer

A)  $143
B)  $153
C)  $175
D)  $185E) A) and B)
F) C) and D)

Question 16

The average-fixed-cost curve is always declining. How does this affect the relationship between the AVC and ATC curves?

Accepted Answer

ATC = AVC + AFC, so the vertical distanc...

Question 17

Marginal cost equals
(i) change in total cost divided by change in quantity produced.
(ii) change in variable cost divided by change in quantity produced.
(iii) the average fixed cost of the current unit.

Accepted Answer

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

Question 18

Figure 13-5 
-Refer to Figure 13-5. Curve C represents which type of cost curve?

Accepted Answer

A)  marginal cost
B)  average total cost
C)  average variable cost
D)  average fixed costE) B) and C)
F) A) and B)

Question 19

Scenario 13-21
Suppose that a small family farm sold its output for $100,000 in a given year. The family spent $25,000 on fuel, $40,000 on seed, fertilizer, and pesticides, and $25,000 on equipment, including maintenance. The family members could have earned $20,000 working at other occupations.
-Refer to Scenario 13-21. What is the accounting profit for the family farm?

Accepted Answer

Accounting profit = Total reve...

Question 20

​Tony's Taco Truck has an average variable cost of $1.50 and a marginal cost of $2 when it produces 50 units of output (tacos) . We can conclude that the average variable cost of producing 51 tacos is

Accepted Answer

A)  ​higher than $1.50.
B)  ​lower than $1.50.
C)  ​equal to $1.50.
D)  ​either higher or lower than $1.50 depending on the direction of the marginal cost curve.E) A) and B)
F) C) and D)

Exam 13: The Costs of Production

Table 13-18 -Refer to Table 13-18. What is the shape of the average-variable-cost curve?

Correct Answer
verified
AVC = VC/Q, where VC is graphed on the v...
View Answer

Correct Answer
verified
Accounting profit = Total reve...
View Answer

Correct Answer
verified

The production function depicts a relationship between which two variables? Also, draw a production function that exhibits diminishing marginal product.

Correct Answer
verified
The production function depict...
View Answer

In the long run a company that produces and sells covers for cell phones incurs total costs of $2,500 when output is 1,250 covers and $4,000 when output is 1,500 covers. For this range of output, the cell phone cover company exhibits

Correct Answer
verified

Tony's Taco Truck has an average variable cost of $1.50 and a marginal cost of $2 when it produces 50 units of output (tacos) . We can conclude that the average variable cost of producing 51 tacos is

Correct Answer
verified

Table 13-14 -Refer to Table 13-14. What is the total cost of producing 2 units of output?

Correct Answer
verified

A firm produces 60 units of output with 5 workers, 65 units with 6 workers, and 68 units with 7 workers. The firm's production function exhibits diminishing marginal productivity between 5 and 7 workers.

Correct Answer
verified

How long does it take a firm to go from the short run to the long run?

Correct Answer
verified

Table 13-16 -Refer to Table 13-16. What is the fixed cost of producing 0 units of output?

Correct Answer
verified

Implicit costs

Correct Answer
verified

Figure 13-5 -Refer to Figure 13-5. Curve C represents which type of cost curve?

Correct Answer
verified

Diminishing marginal productivity implies decreasing total product.

Correct Answer
verified

The total cost to the firm of producing zero units of output is

Correct Answer
verified

Marginal cost equals (i) change in total cost divided by change in quantity produced. (ii) change in variable cost divided by change in quantity produced. (iii) the average fixed cost of the current unit.

Correct Answer
verified

Profit is defined as

Correct Answer
verified

Table 13-14 -Refer to Table 13-14. What is the variable cost of producing 8 units of output?

Correct Answer
verified

Average total cost is increasing whenever

Correct Answer
verified

Average total cost tells us the

Correct Answer
verified

The average-fixed-cost curve is always declining. How does this affect the relationship between the AVC and ATC curves?

Correct Answer
verified
ATC = AVC + AFC, so the vertical distanc...
View Answer

Exam 13: The Costs of Production

Table 13-18 -Refer to Table 13-18. What is the shape of the average-variable-cost curve?

Correct AnswerverifiedAVC = VC/Q, where VC is graphed on the v...View AnswerShow Answer

Correct AnswerverifiedAccounting profit = Total reve...View AnswerShow Answer

Correct AnswerverifiedShow Answer

The production function depicts a relationship between which two variables? Also, draw a production function that exhibits diminishing marginal product.

Correct AnswerverifiedThe production function depict...View AnswerShow Answer

In the long run a company that produces and sells covers for cell phones incurs total costs of $2,500 when output is 1,250 covers and $4,000 when output is 1,500 covers. For this range of output, the cell phone cover company exhibits

Correct AnswerverifiedShow Answer

​Tony's Taco Truck has an average variable cost of $1.50 and a marginal cost of $2 when it produces 50 units of output (tacos) . We can conclude that the average variable cost of producing 51 tacos is

Correct AnswerverifiedShow Answer

Table 13-14 -Refer to Table 13-14. What is the total cost of producing 2 units of output?

Correct AnswerverifiedShow Answer

A firm produces 60 units of output with 5 workers, 65 units with 6 workers, and 68 units with 7 workers. The firm's production function exhibits diminishing marginal productivity between 5 and 7 workers. ​

Correct AnswerverifiedShow Answer

How long does it take a firm to go from the short run to the long run?

Correct AnswerverifiedShow Answer

​Table 13-16 -Refer to Table 13-16. What is the fixed cost of producing 0 units of output?​

Correct AnswerverifiedShow Answer

Implicit costs

Correct AnswerverifiedShow Answer

Figure 13-5 -Refer to Figure 13-5. Curve C represents which type of cost curve?

Correct AnswerverifiedShow Answer

Diminishing marginal productivity implies decreasing total product.

Correct AnswerverifiedShow Answer

The total cost to the firm of producing zero units of output is

Correct AnswerverifiedShow Answer

Marginal cost equals (i) change in total cost divided by change in quantity produced. (ii) change in variable cost divided by change in quantity produced. (iii) the average fixed cost of the current unit.

Correct AnswerverifiedShow Answer

Profit is defined as

Correct AnswerverifiedShow Answer

Table 13-14 -Refer to Table 13-14. What is the variable cost of producing 8 units of output?

Correct AnswerverifiedShow Answer

Average total cost is increasing whenever

Correct AnswerverifiedShow Answer

Average total cost tells us the

Correct AnswerverifiedShow Answer

The average-fixed-cost curve is always declining. How does this affect the relationship between the AVC and ATC curves?

Correct AnswerverifiedATC = AVC + AFC, so the vertical distanc...View AnswerShow Answer

Correct Answer
verified
AVC = VC/Q, where VC is graphed on the v...
View Answer

Correct Answer
verified
Accounting profit = Total reve...
View Answer

Correct Answer
verified

Correct Answer
verified
The production function depict...
View Answer

Correct Answer
verified

Tony's Taco Truck has an average variable cost of $1.50 and a marginal cost of $2 when it produces 50 units of output (tacos) . We can conclude that the average variable cost of producing 51 tacos is

Correct Answer
verified

Correct Answer
verified

A firm produces 60 units of output with 5 workers, 65 units with 6 workers, and 68 units with 7 workers. The firm's production function exhibits diminishing marginal productivity between 5 and 7 workers.

Correct Answer
verified

Correct Answer
verified

Table 13-16 -Refer to Table 13-16. What is the fixed cost of producing 0 units of output?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
ATC = AVC + AFC, so the vertical distanc...
View Answer