Question 1

The market value of the inputs a firm uses is called

Accepted Answer

A)  total cost.
B)  variable cost.
C)  marginal cost.
D)  fixed cost.E) A) and D)
F) A) and C)

Question 2

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) All of the above
F) A) and D)

Question 3

Scenario 13-19
Doreen's Dairy produces and sells Swiss cheese. Last year, it produced 7,000 pounds and sold each pound for $6. In producing the 7,000 pounds, the dairy incurred variable costs of $28,000 and a total cost of $40,000.
-Refer to Scenario 13-19. In producing the 7,000 pounds of cheese, the firm's average total cost was

Accepted Answer

A)  $1.71.
B)  $4.00.
C)  $5.71.
D)  $6.00.E) None of the above
F) C) and D)

Question 4

DIFFICULTY:
Figure 13-8 
-Refer to Figure 13-8. Quantity C represents the output level where the firm

Accepted Answer

A)  maximizes profits.
B)  minimizes total costs.
C)  produces at the efficient scale.
D)  minimizes marginal costs.E) B) and D)
F) C) and D)

Question 5

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. Assume the number of machines does not change. If the factory produces at a rate of 78 chairs per hour, what is the total machine cost per day?

Accepted Answer

A)  $20
B)  $40
C)  $240
D)  We are unable to determine total machine costs from the information given.E) All of the above
F) B) and C)

Question 6

Profit equals total revenue minus total cost.

Accepted Answer

A) True 
 B)False

Question 7

When a firm is making a profit-maximizing production decision, which of the following principles of economics is likely to be most important to the firm's decision?

Accepted Answer

A)  The cost of something is what you give up to get it.
B)  A country's standard of living depends on its ability to produce goods and services.
C)  Prices rise when the government prints too much money.
D)  Governments can sometimes improve market outcomes.E) A) and C)
F) A) and B)

Question 8

DIFFICULTY:
Figure 13-8 
-Refer to Figure 13-8. Which of the following statements is correct?

Accepted Answer

A)  Average total cost is rising for quantities higher than D because marginal cost is higher than average total cost.
B)  Average variable cost is declining for quantities less than B because marginal cost is lower than average variable cost.
C)  Average variable cost is minimized at B because at that quantity, marginal cost equals average variable cost.
D)  All of the above are correct.E) A) and D)
F) B) and D)

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

A local playground equipment company plans to operate out of its current factory, which is estimated to last 30 years. All cost decisions it makes during the 30-year period

Accepted Answer

A)  are long-run decisions.
B)  are short-run decisions.
C)  involve only maintenance of the factory.
D)  are zero because the cost decisions were made at the beginning of the business.E) None of the above
F) A) and B)

Question 12

Scenario 13-6
Ziva is an organic lettuce farmer, but she also spends part of her day as a professional organizing consultant. As a consultant, Ziva helps people organize their houses. Due to the popularity of her home-organization services, Farmer Ziva has more clients requesting her services than she has time to help if she maintains her farming business. Farmer Ziva charges $25 an hour for her home-organization services. One spring day, Ziva spends 10 hours in her fields planting $130 worth of seeds on her farm. She expects that the seeds she planted will yield $300 worth of lettuce.
-Refer to Scenario 13-6. An economist would calculate Ziva's total cost for the day of farming to equal

Accepted Answer

A)  $130.
B)  $250.
C)  $300.
D)  $380.E) A) and B)
F) A) and C)

Question 13

Chloe's Café sells gourmet cinnamon rolls. In the long run, the café incurs a total cost of $500 to produce 1,000 cinnamon rolls. If Chloe's Café exhibits constant returns to scale between 1,000 and 1,500 cinnamon rolls, the long-run average total cost for 1,250 cinnamon rolls is

Accepted Answer

A)  ​higher than $0.50.
B)  ​lower than $0.50.
C)  ​equal to $0.50.
D)  ​equal to $500.E) A) and B)
F) A) and C)

Question 14

Marginal cost increases as the quantity of output increases. This reflects the property of

Accepted Answer

A)  increasing total cost.
B)  diminishing total cost.
C)  increasing marginal product.
D)  diminishing marginal product.E) A) and B)
F) None of the above

Question 15

Scenario 13-6
Ziva is an organic lettuce farmer, but she also spends part of her day as a professional organizing consultant. As a consultant, Ziva helps people organize their houses. Due to the popularity of her home-organization services, Farmer Ziva has more clients requesting her services than she has time to help if she maintains her farming business. Farmer Ziva charges $25 an hour for her home-organization services. One spring day, Ziva spends 10 hours in her fields planting $130 worth of seeds on her farm. She expects that the seeds she planted will yield $300 worth of lettuce.
-Refer to Scenario 13-6. What is the total opportunity cost of the day that Farmer Ziva spent in the field planting lettuce?

Accepted Answer

A)  $130
B)  $250
C)  $300
D)  $380E) B) and D)
F) All of the above

Question 16

The fact that many inputs are fixed in the short run but variable in the long run has little impact on the firm's cost curves.

Accepted Answer

A) True 
 B)False

Question 17

DIFFICULTY:
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) None of the above
F) B) and C)

Question 18

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) B) and C)
F) None of the above

Question 19

Table 13-13
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 13-13. 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 B)
F) None of the above

Question 20

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) All of the above
F) B) and D)

Exam 13: The Costs of Production

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

Correct Answer
verified

A local playground equipment company plans to operate out of its current factory, which is estimated to last 30 years. All cost decisions it makes during the 30-year period

Correct Answer
verified

Profit equals total revenue minus total cost.

Correct Answer
verified

DIFFICULTY: Figure 13-8 -Refer to Figure 13-8. Which of the following statements is correct?

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

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
verified

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

Correct Answer
verified

Correct Answer
verified

When a firm is making a profit-maximizing production decision, which of the following principles of economics is likely to be most important to the firm's decision?

Correct Answer
verified

The fact that many inputs are fixed in the short run but variable in the long run has little impact on the firm's cost curves.

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

The market value of the inputs a firm uses is called

Correct Answer
verified

Chloe's Café sells gourmet cinnamon rolls. In the long run, the café incurs a total cost of $500 to produce 1,000 cinnamon rolls. If Chloe's Café exhibits constant returns to scale between 1,000 and 1,500 cinnamon rolls, the long-run average total cost for 1,250 cinnamon rolls is

Correct Answer
verified

Marginal cost increases as the quantity of output increases. This reflects the property of

Correct Answer
verified

DIFFICULTY: Figure 13-8 -Refer to Figure 13-8. Quantity C represents the output level where the firm

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Exam 13: The Costs of Production

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

Correct AnswerverifiedShow Answer

A local playground equipment company plans to operate out of its current factory, which is estimated to last 30 years. All cost decisions it makes during the 30-year period

Correct AnswerverifiedShow Answer

Profit equals total revenue minus total cost.

Correct AnswerverifiedShow Answer

DIFFICULTY: Figure 13-8 -Refer to Figure 13-8. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

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

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

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When a firm is making a profit-maximizing production decision, which of the following principles of economics is likely to be most important to the firm's decision?

Correct AnswerverifiedShow Answer

The fact that many inputs are fixed in the short run but variable in the long run has little impact on the firm's cost curves.

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The market value of the inputs a firm uses is called

Correct AnswerverifiedShow Answer

Chloe's Café sells gourmet cinnamon rolls. In the long run, the café incurs a total cost of $500 to produce 1,000 cinnamon rolls. If Chloe's Café exhibits constant returns to scale between 1,000 and 1,500 cinnamon rolls, the long-run average total cost for 1,250 cinnamon rolls is

Correct AnswerverifiedShow Answer

Marginal cost increases as the quantity of output increases. This reflects the property of

Correct AnswerverifiedShow Answer

DIFFICULTY: Figure 13-8 -Refer to Figure 13-8. Quantity C represents the output level where the firm

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

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