Question 1

To an economist,the field of industrial organization answers which of the following questions?

Accepted Answer

A)   Why are consumers subject to the law of demand?
B)   Why do firms experience diminishing marginal products of inputs?
C)   How does the number of firms affect prices and the efficiency of market outcomes?
D)   Why do firms consider production costs when determining product supply?E) None of the above
F) All of the above

Question 2

Table 13-10
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 13-10.What is the marginal product of the second worker?

Accepted Answer

A)   110
B)   200
C)   260
D)   300E) A) and B)
F) All of the above

Question 3

The Wacky Widget company has total fixed costs of $100,000 per year.The firm's average variable cost is $10 for 10,000 widgets.At that level of output,the firm's average total costs equal

Accepted Answer

A)   $10
B)   $15
C)   $20
D)   $25E) A) and D)
F) A) and B)

Question 4

Cody builds mailboxes.If he charges $20 for each mailbox,his total revenue will be

Accepted Answer

A)   $1,000 if he sells 100 mailboxes.
B)   $500 if he sells 25 mailboxes.
C)   $20 regardless of how many mailboxes he sells.
D)   $200 if he sells 5 mailboxes.E) A) and D)
F) A) and C)

Question 5

Accountants keep track of the money that flows into and out of firms.

Accepted Answer

A) True 
 B)False

Question 6

The amount of money that a wheat farmer could have earned if he had planted barley instead of wheat is

Accepted Answer

A)   an explicit cost.
B)   an accounting cost
C)   an implicit cost.
D)   forgone accounting profit.E) All of the above
F) None of the above

Question 7

The fundamental reason that marginal cost eventually rises as output increases is because of

Accepted Answer

A)   economies of scale.
B)   diseconomies of scale.
C)   diminishing marginal product.
D)   rising average fixed cost.E) None of the above
F) All of the above

Question 8

When marginal cost is less than average total cost,

Accepted Answer

A)   marginal cost must be falling.
B)   average variable cost must be falling.
C)   average total cost is falling.
D)   average total cost is rising.E) A) and C)
F) A) and D)

Question 9

Average total cost and marginal cost express information that is already contained in a firm's total cost.

Accepted Answer

A) True 
 B)False

Question 10

Adam Smith used a famous example of what type of firm to illustrate economies of scale?

Accepted Answer

A)   Apple
B)   a pin factory
C)   a lumber mill
D)   a British universityE) B) and D)
F) B) and C)

Question 11

A local potato chip company plans to operate out of its current factory,which is estimated to last 25 years.All cost decisions it makes during the 25-year period

Accepted Answer

A)   are short-run decisions.
B)   are long-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) A) and B)
F) B) and C)

Question 12

Table 13-1
 
-Refer to Table 13-1.For the firm whose production function and costs are specified in the table,its total-cost curve is

Accepted Answer

A)   constant.
B)   increasing at a decreasing rate.
C)   increasing at an increasing rate.
D)   unknown because there is no relationship between a firm's production function and its total-cost curve.E) All of the above
F) None of the above

Question 13

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

Accepted Answer

AVC = VC/Q,where VC is graphed on the ve...

Question 14

What might cause diseconomies of scale?

Accepted Answer

coordinati...

Question 15

Table 13-9
 
-Refer to Table 13-9.The total cost of producing 1 poster is

Accepted Answer

A)   $1.00.
B)   $10.00.
C)   $11.00.
D)   $22.00.E) None of the above
F) A) and B)

Question 16

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 the firm hires 4 workers,the firm produces 50 units of output.If the fixed cost of production is $4,the variable cost per unit of labor is $20,and the marginal product of labor for the fifth unit of labor is 2,what is the average total cost of production when the firm hires 5 workers?

Accepted Answer

A)   $2.00
B)   $20.00
C)   $20.80
D)   $22.80E) B) and D)
F) A) and C)

Question 17

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

Accepted Answer

A)   $40
B)   $140
C)   $360
D)   $410E) B) and C)
F) C) and D)

Question 18

When a firm experiences diseconomies of scale,

Accepted Answer

A)   short-run average total cost is minimized.
B)   long-run average total cost is minimized.
C)   long-run average total cost increases as output increases.
D)   long-run average total cost decreases as output increases.E) C) and D)
F) A) and C)

Question 19

Table 13-5
 
-Refer to Table 13-5.The marginal product of the fourth worker is

Accepted Answer

A)   900 units.
B)   800 units.
C)   700 units.
D)   500 units.E) A) and D)
F) A) and B)

Question 20

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) B) and D)
F) A) and C)

Exam 13: The Costs of Production

Table 13-5 -Refer to Table 13-5.The marginal product of the fourth worker is

Correct Answer
verified

The fundamental reason that marginal cost eventually rises as output increases is because of

Correct Answer
verified

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

Correct Answer
verified
AVC = VC/Q,where VC is graphed on the ve...
View Answer

What might cause diseconomies of scale?

Correct Answer
verified
coordinati...
View Answer

An entrepreneur's motivation to start a business arises from

Correct Answer
verified

To an economist,the field of industrial organization answers which of the following questions?

Correct Answer
verified

Table 13-1 -Refer to Table 13-1.For the firm whose production function and costs are specified in the table,its total-cost curve is

Correct Answer
verified

The amount of money that a wheat farmer could have earned if he had planted barley instead of wheat is

Correct Answer
verified

When marginal cost is less than average total cost,

Correct Answer
verified

The Wacky Widget company has total fixed costs of $100,000 per year.The firm's average variable cost is $10 for 10,000 widgets.At that level of output,the firm's average total costs equal

Correct Answer
verified

Accountants keep track of the money that flows into and out of firms.

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

When a firm experiences diseconomies of scale,

Correct Answer
verified

Average total cost and marginal cost express information that is already contained in a firm's total cost.

Correct Answer
verified

A local potato chip company plans to operate out of its current factory,which is estimated to last 25 years.All cost decisions it makes during the 25-year period

Correct Answer
verified

Adam Smith used a famous example of what type of firm to illustrate economies of scale?

Correct Answer
verified

Table 13-9 -Refer to Table 13-9.The total cost of producing 1 poster is

Correct Answer
verified

Cody builds mailboxes.If he charges $20 for each mailbox,his total revenue will be

Correct Answer
verified

Exam 13: The Costs of Production

Table 13-5 -Refer to Table 13-5.The marginal product of the fourth worker is

Correct AnswerverifiedShow Answer

The fundamental reason that marginal cost eventually rises as output increases is because of

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedAVC = VC/Q,where VC is graphed on the ve...View AnswerShow Answer

What might cause diseconomies of scale?

Correct Answerverifiedcoordinati...View AnswerShow Answer

An entrepreneur's motivation to start a business arises from

Correct AnswerverifiedShow Answer

To an economist,the field of industrial organization answers which of the following questions?

Correct AnswerverifiedShow Answer

Table 13-1 -Refer to Table 13-1.For the firm whose production function and costs are specified in the table,its total-cost curve is

Correct AnswerverifiedShow Answer

The amount of money that a wheat farmer could have earned if he had planted barley instead of wheat is

Correct AnswerverifiedShow Answer

When marginal cost is less than average total cost,

Correct AnswerverifiedShow Answer

The Wacky Widget company has total fixed costs of $100,000 per year.The firm's average variable cost is $10 for 10,000 widgets.At that level of output,the firm's average total costs equal

Correct AnswerverifiedShow Answer

Accountants keep track of the money that flows into and out of firms.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When a firm experiences diseconomies of scale,

Correct AnswerverifiedShow Answer

Average total cost and marginal cost express information that is already contained in a firm's total cost.

Correct AnswerverifiedShow Answer

A local potato chip company plans to operate out of its current factory,which is estimated to last 25 years.All cost decisions it makes during the 25-year period

Correct AnswerverifiedShow Answer

Adam Smith used a famous example of what type of firm to illustrate economies of scale?

Correct AnswerverifiedShow Answer

Table 13-9 -Refer to Table 13-9.The total cost of producing 1 poster is

Correct AnswerverifiedShow Answer

Cody builds mailboxes.If he charges $20 for each mailbox,his total revenue will be

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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AVC = VC/Q,where VC is graphed on the ve...
View Answer

Correct Answer
verified
coordinati...
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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