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Exam 13: The Costs of Production

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Question 241

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

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MC = change in TC / change in Q,so altho...

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Question 242

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At Bert's Bootery,the total cost of producing twenty pairs of boots is $400.The marginal cost of producing the twenty-first pair of boots is $83.We can conclude that the

A) average variable cost of 21 pairs of boots is $23.
B) average total cost of 21 pairs of boots is $23.
C) average total cost of 21 pairs of boots is $15.09.
D) marginal cost of the 20th pair of boots is $20.

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

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Question 243

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Jennifer is a junior in college.Her current cumulative grade point average (GPA) is 3.5 out of a 4.0 scale.Jennifer is hoping that by the time she graduates,she can raise her cumulative GPA to a 3.7.Which of the following statements is correct?

Diseconomies of scale often arise because higher production levels allow specialization among workers.

Figure 13-9 The figure below depicts average total cost functions for a firm that produces automobiles. -Refer to Figure 13-9.Which curve represents the long-run average total cost?

Implicit costs are costs that do not require an outlay of money by the firm.

Total revenue equals

When economists speak of a firm's costs,they are usually excluding the opportunity costs.

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

When a firm's long-run average total costs do not vary as output increases,the firm exhibits

Which of the following is the best example of a variable cost?

Figure 13-5 -Refer to Figure 13-5.Curve D is increasing because

When a firm is operating at an efficient scale,

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?

The marginal-cost curve intersects the average-fixed-cost curve at the minimum of marginal cost.

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 constant returns to scale?

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.How many instructional modules are produced when marginal cost is $1,300?

Industrial organization is the study of how

Pete owns a shoe-shine business.Which of the following costs would be implicit costs? (i) Shoe polish (ii) Rent on the shoe stand (iii) Wages Pete could earn delivering newspapers (iv) Interest that Pete's money was earning before he spent his savings to set up the shoe-shine business

A firm has a fixed cost of $500 in its first year of operation.When the firm produces 100 units of output,its total costs are $4,500.The marginal cost of producing the 101st unit of output is $300.What is the total cost of producing 101 units?