Question 1

If Danielle sells 300 wrist bands for $0.50 each, her total revenues are

Accepted Answer

A)  $150.
B)  $299.50.
C)  $300.
D)  $600.E) B) and D)
F) B) and C)

Question 2

According to the mathematical laws that govern the relationship between average total cost and marginal cost, where must these two curves intersect?

Accepted Answer

The two curves will ...

Question 3

The average-total-cost curve intersects

Accepted Answer

A)  average fixed cost at the minimum of average total cost.
B)  average variable cost at the minimum of average total cost.
C)  marginal cost at the minimum of average total cost.
D)  marginal cost at the minimum of marginal cost.E) B) and C)
F) A) and D)

Question 4

Harry's Hotdogs is a small street vendor business owned by Harry Huggins. Harry is trying to get a better understanding of his costs by categorizing them as fixed or variable. Which of the following costs are most likely to be considered fixed costs?

Accepted Answer

A)  the cost of mustard
B)  the cost of hotdog buns
C)  wages paid to workers who sell hot dogs
D)  the cost of bookkeeping servicesE) A) and B)
F) All of the above

Question 5

Economists include both explicit and implicit costs while accountants include only implicit costs.
​

Accepted Answer

A) True 
 B)False

Question 6

Scenario 13-18
Farmer Jack is a watermelon farmer. If Jack plants no seeds on his farm, he gets no harvest. If he plants 1 bag of seeds, he gets 30 watermelons. If he plants 2 bags of seeds, he gets 50 watermelons. If he plants 3 bags of seeds he gets 60 watermelons. A bag of seeds costs $100, and the costs of seeds are his only costs.
-Refer to Scenario 13-18. Farmer Jack's production function will

Accepted Answer

A)  decrease at a decreasing rate.
B)  decrease at an increasing rate.
C)  increase at a decreasing rate.
D)  increase at an increasing rate.E) C) and D)
F) None of the above

Question 7

Which of the following statements is correct?

Accepted Answer

A)  If marginal cost is rising, then average total cost is rising.
B)  If marginal cost is rising, then average variable cost is rising.
C)  If average variable cost is rising, then marginal cost is minimized.
D)  If average total cost is rising, then marginal cost is greater than average total cost.E) B) and D)
F) B) and C)

Question 8

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. One month, Teacher's Helper produced 18 instructional modules. What was the average fixed cost for that month?

Accepted Answer

A)  $60
B)  $108
C)  $811
D)  It can't be determined from the information given.E) B) and D)
F) None of the above

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

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) A) and D)
F) None of the above

Question 11

In the long run a company that produces and sells laundry detergent incurs total costs of $2,500 when output is 1,250 units and $2,750 when output is 1,500 units. For this range of output, the laundry detergent company exhibits

Accepted Answer

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

Question 12

A dairy produces and sells organic milk. Last year it sold 500,000 gallons of milk at a price of $7 per gallon. For last year, the firm's

Accepted Answer

A)  total revenue was $3.5 million.
B)  economic profit was $3.5 million.
C)  accounting profit was $3.5 million.
D)  explicit costs were $3.5 million.E) All of the above
F) None of the above

Question 13

When a firm is able to put idle equipment to use by hiring another worker,

Accepted Answer

A)  variable costs will rise.
B)  variable costs will fall.
C)  fixed costs will fall.
D)  both fixed costs and variable costs will rise.E) B) and D)
F) B) and C)

Question 14

An entrepreneur's motivation to start a business arises from

Accepted Answer

A)  an innate love for the type of business that he or she starts.
B)  a desire to earn a profit.
C)  an altruistic desire to provide the world with a good product.
D)  All of the above could be correct.E) A) and B)
F) A) and C)

Question 15

Let L represent the number of workers hired by a firm, and let Q represent that firm's quantity of output. Assume two points on the firm's production function are (L = 12, Q = 122)  and (L = 13, Q = 130) . Then the marginal product of the 13th worker is

Accepted Answer

A)  8 units of output.
B)  10 units of output.
C)  122 units of output.
D)  132 units of output.E) None of the above
F) A) and B)

Question 16

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 economies of scale.

Accepted Answer

A) True 
 B)False

Question 17

What are opportunity costs? How do explicit and implicit costs relate to opportunity costs?

Accepted Answer

The opportunity cost of an ite...

Question 18

Average total cost (ATC)  is calculated as follows:

Accepted Answer

A)  ATC = (change in total cost) /(change in quantity of output) .
B)  ATC = (change in total cost) /(change in quantity of input) .
C)  ATC = (total cost) /(quantity of output) .
D)  ATC = (total cost) /(quantity of input) .E) B) and C)
F) All of the above

Question 19

Table 13-12
Eileen's Elegant Earrings produces pairs of earrings for its mail order catalogue business. Each pair is shipped in a separate box. She rents a small room for $150 a week in the downtown business district that serves as her factory. She can hire workers for $275 a week. There are no implicit costs. 
-Refer to Table 13-12. One week, Eileen earns a profit of $125. If her revenue for the week is $1100, how many boxes of earrings did she produce?

Accepted Answer

A)  140
B)  330
C)  780
D)  950E) A) and D)
F) B) and C)

Question 20

An example of an explicit cost of production would be the

Accepted Answer

A)  cost of forgone labor earnings for an entrepreneur.
B)  lost opportunity to invest in capital markets when the money is invested in one's business.
C)  lease payments for the land on which a firm's factory stands.
D)  Both a and c are correct.E) A) and D)
F) B) and C)

Exam 13: The Costs of Production

In the long run a company that produces and sells laundry detergent incurs total costs of $2,500 when output is 1,250 units and $2,750 when output is 1,500 units. For this range of output, the laundry detergent company exhibits

Correct Answer
verified

According to the mathematical laws that govern the relationship between average total cost and marginal cost, where must these two curves intersect?

Correct Answer
verified
The two curves will ...
View Answer

Correct Answer
verified

What are opportunity costs? How do explicit and implicit costs relate to opportunity costs?

Correct Answer
verified
The opportunity cost of an ite...
View 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 Answer
verified

If Danielle sells 300 wrist bands for $0.50 each, her total revenues are

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
verified

An example of an explicit cost of production would be the

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

When a firm is able to put idle equipment to use by hiring another worker,

Correct Answer
verified

A dairy produces and sells organic milk. Last year it sold 500,000 gallons of milk at a price of $7 per gallon. For last year, the firm's

Correct Answer
verified

Average total cost (ATC) is calculated as follows:

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 C is experiencing economies of scale.

Correct Answer
verified

An entrepreneur's motivation to start a business arises from

Correct Answer
verified

Harry's Hotdogs is a small street vendor business owned by Harry Huggins. Harry is trying to get a better understanding of his costs by categorizing them as fixed or variable. Which of the following costs are most likely to be considered fixed costs?

Correct Answer
verified

The average-total-cost curve intersects

Correct Answer
verified

Let L represent the number of workers hired by a firm, and let Q represent that firm's quantity of output. Assume two points on the firm's production function are (L = 12, Q = 122) and (L = 13, Q = 130) . Then the marginal product of the 13th worker is

Correct Answer
verified

Economists include both explicit and implicit costs while accountants include only implicit costs.

Correct Answer
verified

Correct Answer
verified

Exam 13: The Costs of Production

In the long run a company that produces and sells laundry detergent incurs total costs of $2,500 when output is 1,250 units and $2,750 when output is 1,500 units. For this range of output, the laundry detergent company exhibits

Correct AnswerverifiedShow Answer

According to the mathematical laws that govern the relationship between average total cost and marginal cost, where must these two curves intersect?

Correct AnswerverifiedThe two curves will ...View AnswerShow Answer

Correct AnswerverifiedShow Answer

What are opportunity costs? How do explicit and implicit costs relate to opportunity costs?

Correct AnswerverifiedThe opportunity cost of an ite...View AnswerShow 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

If Danielle sells 300 wrist bands for $0.50 each, her total revenues are

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

An example of an explicit cost of production would be the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When a firm is able to put idle equipment to use by hiring another worker,

Correct AnswerverifiedShow Answer

A dairy produces and sells organic milk. Last year it sold 500,000 gallons of milk at a price of $7 per gallon. For last year, the firm's

Correct AnswerverifiedShow Answer

Average total cost (ATC) is calculated as follows:

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 C is experiencing economies of scale.

Correct AnswerverifiedShow Answer

An entrepreneur's motivation to start a business arises from

Correct AnswerverifiedShow Answer

Harry's Hotdogs is a small street vendor business owned by Harry Huggins. Harry is trying to get a better understanding of his costs by categorizing them as fixed or variable. Which of the following costs are most likely to be considered fixed costs?

Correct AnswerverifiedShow Answer

The average-total-cost curve intersects

Correct AnswerverifiedShow Answer

Let L represent the number of workers hired by a firm, and let Q represent that firm's quantity of output. Assume two points on the firm's production function are (L = 12, Q = 122) and (L = 13, Q = 130) . Then the marginal product of the 13th worker is

Correct AnswerverifiedShow Answer

Economists include both explicit and implicit costs while accountants include only implicit costs. ​

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
The two curves will ...
View Answer

Correct Answer
verified

Correct Answer
verified
The opportunity cost of an ite...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Economists include both explicit and implicit costs while accountants include only implicit costs.

Correct Answer
verified

Correct Answer
verified