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Exam 13: The Costs of Production

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Question 171

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A student might describe information about the costs of production as

A) dry and technical.
B) boring.
C) crucial to understanding firms and market structures.
D) All of the above could be correct.

E) C) and D)
F) A) and C)

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Question 172

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In the short run,if a firm produces nothing,total costs are zero.

A) True
B) False

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Question 173

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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 four units of output are produced,the total cost is $175,and the average variable cost is $33.75.What would the average fixed cost be if ten units were produced?

If a firm produces nothing,it still incurs its fixed costs.

Table 13-16 Listed in the table are the long-run total costs for three different firms. -Refer to Table 13-16.Firm B is experiencing diseconomies of scale.

Figure 13-3 -Refer to Figure 13-3.Assuming that the firm depicted produces cookies,which of the statements below is most consistent with the shape of the total cost curve?

Table 13-16 Listed in the table are the long-run total costs for three different firms. -Refer to Table 13-16.Firm A is experiencing constant returns to scale.

Table 13-2 -Refer to Table 13-2.What is the shape of the average-fixed-cost curve?

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

Economic profit is equal to total revenue minus the

If Darren sells 300 glasses of iced tea at $0.50 each,his total revenues are

Table 13-2 -Refer to Table 13-2.At which number of workers does diminishing marginal product begin?

Average variable cost is equal to total variable cost divided by quantity of output.

Anna borrows $5,000 from a bank and withdraws $1,000 from her personal savings to start a coffee shop.The interest rate is 5 percent for both the bank loan and her personal savings.Her opportunity cost of capital is $250.

Figure 13-2 -Refer to Figure 13-2.As the number of workers increases,

Figure 13-10 -Refer to Figure 13-10.The three average total cost curves on the diagram labeled ATC₁,ATC₂,and ATC₃ most likely correspond to three different

A firm produces 400 units of output at a total cost of $1,200.If fixed costs are $200,

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 35 chairs per hour,what is the total labor cost per hour?

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.

On a 100-acre farm,a farmer is able to produce 3,000 bushels of wheat when he hires 2 workers.He is able to produce 4,400 bushels of wheat when he hires 3 workers.Which of the following possibilities is consistent with the property of diminishing marginal product?