Question 1

If the total cost curve gets steeper as output increases, the firm is experiencing

Accepted Answer

A)  diseconomies of scale.
B)  economies of scale.
C)  diminishing marginal product.
D)  increasing marginal product.E) A) and B)
F) None of the above

Question 2

Scenario 13-9
Ellie has been working for an engineering firm and earning an annual salary of $80,000. She decides to open her own engineering business. Her annual expenses will include $15,000 for office rent, $3,000 for equipment rental, $1,000 for supplies, $1,200 for utilities, and a $35,000 salary for a secretary/bookkeeper. Ellie will cover her start-up expenses by cashing in a $20,000 certificate of deposit on which she was earning annual interest of $500.
-Refer to Scenario 13-9. Ellie's annual economic costs will equal

Accepted Answer

A)  $55,200.
B)  $75,200.
C)  $80,500.
D)  $135,700.E) A) and D)
F) B) and D)

Question 3

Table 13-1 
-Refer to Table 13-1. What is total output when 5 workers are hired?

Accepted Answer

A)  -10
B)  90
C)  185
D)  225E) C) and D)
F) All of the above

Question 4

Table 13-17
Consider the following table of long-run total cost for four different firms: 
-Refer to Table 13-17. Which firm has diseconomies of scale over the entire range of output?

Accepted Answer

A)  Firm 1 only
B)  Firm 2 only
C)  Firms 1 and 2 only
D)  Firm 3 onlyE) A) and D)
F) B) and D)

Question 5

The long-run average total cost curve is always

Accepted Answer

A)  flatter than the short-run average total cost curve, but not necessarily horizontal.
B)  horizontal.
C)  falling as output increases.
D)  rising as output increases.E) A) and D)
F) All of the above

Question 6

Economies of 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)  marginal costs are equal to average total costs for all levels of output.E) B) and D)
F) B) and C)

Question 7

Frank owns a dog-grooming business. Which of the following costs would be implicit costs? (i) 
Dog shampoo
(ii) 
Rent on the storefront
(iii) 
Wages Frank could earn as a substitute elementary-school teacher
(iv) 
Interest that Frank's money was earning before he spent his savings to set up the dog-grooming business

Accepted Answer

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

Question 8

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

Accepted Answer

A)  $25
B)  $50
C)  $110
D)  $220E) B) and C)
F) None of the above

Question 9

Bubba is a shrimp fisherman who catches 4,000 pounds of shrimp per year. He can sell the shrimp for $5 per pound. His average total cost of catching shrimp is $3 per pound. Bubba's annual total revenue is

Accepted Answer

A)  $8,000.
B)  $12,000.
C)  $20,000.
D)  $32,000.E) A) and C)
F) A) and D)

Question 10

Explicit costs

Accepted Answer

A)  require an outlay of money by the firm.
B)  include all of the firm's opportunity costs.
C)  include the value of the business owner's time.
D)  Both b and c are correct.E) A) and B)
F) A) and C)

Question 11

Figure 13-7 
-Refer to Figure 13-7. Which of the figures represents the total cost curve for a typical firm?

Accepted Answer

A)   Figure 1
B)   Figure 2
C)   Figure 3
D)   Figure 4E) B) and D)
F) None of the above

Question 12

The shape of the marginal cost curve tells a producer something about the marginal product of her workers.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following statements is not correct?

Accepted Answer

A)  In the long run, there are no fixed costs.
B)  Marginal cost is independent of fixed costs.
C)  Economies of scale is a short-run concept.
D)  Diminishing marginal product explains increasing marginal cost.E) None of the above
F) A) and B)

Question 14

The amount by which total cost rises when the firm produces one additional unit of output is called

Accepted Answer

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

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A)  $25
B)  $50
C)  $100
D)  $200E) All of the above
F) C) and D)

Question 18

Which of the following statements is correct?

Accepted Answer

A)  Assuming that explicit costs are positive, economic profit is greater than accounting profit.
B)  Assuming that implicit costs are positive, accounting profit is greater than economic profit.
C)  Assuming that explicit costs are positive, accounting profit is equal to economic profit.
D)  Assuming that implicit costs are positive, economic profit is positive.E) A) and B)
F) A) and C)

Question 19

Scenario 13-9
Ellie has been working for an engineering firm and earning an annual salary of $80,000. She decides to open her own engineering business. Her annual expenses will include $15,000 for office rent, $3,000 for equipment rental, $1,000 for supplies, $1,200 for utilities, and a $35,000 salary for a secretary/bookkeeper. Ellie will cover her start-up expenses by cashing in a $20,000 certificate of deposit on which she was earning annual interest of $500.
-Refer to Scenario 13-9. According to an economist, which of the following revenue totals will yield Ellie's business $50,000 in economic profits?

Accepted Answer

A)  $55,200
B)  $100,200
C)  $132,500
D)  $185,700E) All of the above
F) A) and D)

Question 20

Briefly describe why measuring a firm's costs is more complicated than measuring its revenues.

Accepted Answer

A firm's revenues can be calculated by m...

Exam 13: The Costs of Production

Bubba is a shrimp fisherman who catches 4,000 pounds of shrimp per year. He can sell the shrimp for $5 per pound. His average total cost of catching shrimp is $3 per pound. Bubba's annual total revenue is

Correct Answer
verified

Table 13-17 Consider the following table of long-run total cost for four different firms: -Refer to Table 13-17. Which firm has diseconomies of scale over the entire range of output?

Correct Answer
verified

The amount by which total cost rises when the firm produces one additional unit of output is called

Correct Answer
verified

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
verified

Figure 13-7 -Refer to Figure 13-7. Which of the figures represents the total cost curve for a typical firm?

Correct Answer
verified

Economies of scale occur when a firm's

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Table 13-1 -Refer to Table 13-1. What is total output when 5 workers are hired?

Correct Answer
verified

Which of the following statements is not correct?

Correct Answer
verified

The long-run average total cost curve is always

Correct Answer
verified

The shape of the marginal cost curve tells a producer something about the marginal product of her workers.

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

If the total cost curve gets steeper as output increases, the firm is experiencing

Correct Answer
verified

Explicit costs

Correct Answer
verified

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

Correct Answer
verified

Briefly describe why measuring a firm's costs is more complicated than measuring its revenues.

Correct Answer
verified
A firm's revenues can be calculated by m...
View Answer

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

Correct Answer
verified

Exam 13: The Costs of Production

Bubba is a shrimp fisherman who catches 4,000 pounds of shrimp per year. He can sell the shrimp for $5 per pound. His average total cost of catching shrimp is $3 per pound. Bubba's annual total revenue is

Correct AnswerverifiedShow Answer

Table 13-17 Consider the following table of long-run total cost for four different firms: -Refer to Table 13-17. Which firm has diseconomies of scale over the entire range of output?

Correct AnswerverifiedShow Answer

The amount by which total cost rises when the firm produces one additional unit of output is called

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Figure 13-7 -Refer to Figure 13-7. Which of the figures represents the total cost curve for a typical firm?

Correct AnswerverifiedShow Answer

Economies of scale occur when a firm's

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Table 13-1 -Refer to Table 13-1. What is total output when 5 workers are hired?

Correct AnswerverifiedShow Answer

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

The long-run average total cost curve is always

Correct AnswerverifiedShow Answer

The shape of the marginal cost curve tells a producer something about the marginal product of her workers.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If the total cost curve gets steeper as output increases, the firm is experiencing

Correct AnswerverifiedShow Answer

Explicit costs

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Briefly describe why measuring a firm's costs is more complicated than measuring its revenues.

Correct AnswerverifiedA firm's revenues can be calculated by m...View AnswerShow Answer

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

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
A firm's revenues can be calculated by m...
View Answer

Correct Answer
verified