Question 1

On a 100-acre farm, a farmer is able to produce 3,000 bushels of wheat when he hires 2 workers. He is able to produce 4,400 bushels of wheat when he hires 3 workers. Which of the following possibilities is consistent with the property of diminishing marginal product?

Accepted Answer

A)  The farmer is able to produce 5,600 bushels of wheat when he hires 4 workers.
B)  The farmer is able to produce 5,400 bushels of wheat when he hires 4 workers.
C)  The farmer is able to produce 5,200 bushels of wheat when he hires 4 workers.
D)  Any of the above could be correct.E) A) and B)
F) B) and C)

Question 2

The most likely explanation for economies of scale is

Accepted Answer

A)  coordination problems.
B)  specialization of labor.
C)  increasing marginal cost.
D)  decreasing marginal cost.E) A) and B)
F) All of the above

Question 3

Table 13-4
Charles's Math Tutoring 
-Refer to Table 13-4. Charles's math tutoring company experiences diminishing marginal productivity with the addition of the

Accepted Answer

A)  first worker.
B)  second worker.
C)  third worker.
D)  fourth worker.E) None of the above
F) A) and B)

Question 4

Scenario 13-17
If Farmer Brown plants no seeds on his farm, he gets no harvest. If he plants 1 bag of seeds, he gets 5 bushels of wheat. If he plants 2 bags, he gets 9 bushels. If he plants 3 bags, he gets 12 bushels. A bag of seeds costs $120, and seeds are his only cost.
-Refer to Scenario 13-17. Farmer Brown's marginal-cost curve is

Accepted Answer

A)  increasing.
B)  decreasing.
C)  constant.
D)  U-shaped.E) A) and B)
F) A) and C)

Question 5

Table 13-9 
-Refer to Table 13-9. The average total cost of producing 240 units is

Accepted Answer

A)  $0.13.
B)  $0.19.
C)  $0.32.
D)  $0.80.E) None of the above
F) A) and B)

Question 6

Table 13-14 
-Refer to Table 13-14. What is the fixed cost of production for this firm?

Accepted Answer

A)  $10
B)  $20
C)  $23
D)  $33E) None of the above
F) B) and D)

Question 7

Marginal cost is equal to

Accepted Answer

A)  TC/Q.
B)  ΔATC/Q.
C)  ΔTC/ΔQ.
D)  ΔQ/ΔTC.E) B) and D)
F) B) and C)

Question 8

Anya has decided to start her own hair-styling salon. To purchase the necessary equipment, Anya withdrew $10,000 from her savings account, which was earning 3% interest, and borrowed an additional $5,000 from the bank at an interest rate of 8%. What is Anya's annual opportunity cost of the financial capital that has been invested in the business?

Accepted Answer

A)  $300
B)  $400
C)  $700
D)  $1,650E) B) and D)
F) A) and C)

Question 9

Table 13-15 
-Refer to Table 13-15. What is average fixed cost when output is 40 units?

Accepted Answer

A)  $1.00
B)  $3.32
C)  $5.00
D)  $8.00E) A) and D)
F) None of the above

Question 10

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

Accepted Answer

A)  monthly wage payments for hired labor
B)  annual property tax payments for a building
C)  monthly rent payments for a warehouse
D)  annual insurance payments for a warehouseE) A) and B)
F) A) and C)

Question 11

The cost of producing an additional unit of output is the firm's

Accepted Answer

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

Question 12

Figure 13-3 
-Refer to Figure 13-3. Which of the following is true of the production function (not pictured)  that underlies this total cost function? (i) 
Total output increases as the quantity of inputs increases but at a decreasing rate.(ii) 
Marginal product is diminishing for all levels of input usage.(iii) 
The slope of the production function decreases as the quantity of inputs increases.

Accepted Answer

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

Question 13

If the average-total-cost curve is falling, then the marginal-cost curve must also be falling.

Accepted Answer

A) True 
 B)False

Question 14

Economists and accountants both include forgone income as a cost to a small business owner.

Accepted Answer

A) True 
 B)False

Question 15

Suppose that Danita owns a cupcake bakery. In the short run, at least one of her inputs is fixed. Provide one or two examples of the types of inputs that could be fixed in the short run.

Accepted Answer

Danita's store size is likely to be fixe...

Question 16

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. What is the total cost associated with making 890 boxes of earrings per week?

Accepted Answer

A)  $1,250
B)  $1,325
C)  $1,400
D)  $1,575E) All of the above
F) B) and C)

Question 17

​​​Table 13-7 
-Refer to Table 13-7. ​What is the marginal product of the third worker?

Accepted Answer

A)  ​85
B)  ​125
C)  ​45
D)  ​40E) B) and C)
F) None of the above

Question 18

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

Accepted Answer

A)  $50
B)  $140
C)  $360
D)  $410E) A) and C)
F) B) and C)

Question 19

Figure 13-9
The figure below depicts average total cost functions for a firm that produces automobiles. A B) ATCB C) ATCC D) ATCD" class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 13-9. Which of the curves is most likely to characterize the short-run average total cost curve of the smallest factory?

Accepted Answer

A)  ATCA
B)  ATCB
C)  ATCC
D)  ATCDE) A) and B)
F) A) and C)

Question 20

Katherine gives piano lessons for $15 per hour. She also grows flowers, which she arranges and sells at the local farmer's market. One day she spends 5 hours planting $50 worth of seeds in her garden. Once the seeds have grown into flowers, she can sell them for $150 at the farmer's market. Katherine's accounting profits are

Accepted Answer

A)  $100, and her economic profits are $25.
B)  $100, and her economic profits are $75.
C)  $25, and her economic profits are $100.
D)  $75, and her economic profits are $125.E) A) and D)
F) A) and B)

Exam 13: The Costs of Production

The cost of producing an additional unit of output is the firm's

Correct Answer
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Table 13-4 Charles's Math Tutoring -Refer to Table 13-4. Charles's math tutoring company experiences diminishing marginal productivity with the addition of the

Correct Answer
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Economists and accountants both include forgone income as a cost to a small business owner.

Correct Answer
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The most likely explanation for economies of scale is

Correct Answer
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Table 13-14 -Refer to Table 13-14. What is the fixed cost of production for this firm?

Correct Answer
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Correct Answer
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Table 13-9 -Refer to Table 13-9. The average total cost of producing 240 units is

Correct Answer
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Correct Answer
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Table 13-15 -Refer to Table 13-15. What is average fixed cost when output is 40 units?

Correct Answer
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Figure 13-9 The figure below depicts average total cost functions for a firm that produces automobiles. -Refer to Figure 13-9. Which of the curves is most likely to characterize the short-run average total cost curve of the smallest factory?

Correct Answer
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Correct Answer
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Suppose that Danita owns a cupcake bakery. In the short run, at least one of her inputs is fixed. Provide one or two examples of the types of inputs that could be fixed in the short run.

Correct Answer
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Danita's store size is likely to be fixe...
View Answer

On a 100-acre farm, a farmer is able to produce 3,000 bushels of wheat when he hires 2 workers. He is able to produce 4,400 bushels of wheat when he hires 3 workers. Which of the following possibilities is consistent with the property of diminishing marginal product?

Correct Answer
verified

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

Correct Answer
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Marginal cost is equal to

Correct Answer
verified

If the average-total-cost curve is falling, then the marginal-cost curve must also be falling.

Correct Answer
verified

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

Correct Answer
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Table 13-7 -Refer to Table 13-7. What is the marginal product of the third worker?

Correct Answer
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Exam 13: The Costs of Production

The cost of producing an additional unit of output is the firm's

Correct AnswerverifiedShow Answer

Table 13-4 Charles's Math Tutoring -Refer to Table 13-4. Charles's math tutoring company experiences diminishing marginal productivity with the addition of the

Correct AnswerverifiedShow Answer

Economists and accountants both include forgone income as a cost to a small business owner.

Correct AnswerverifiedShow Answer

The most likely explanation for economies of scale is

Correct AnswerverifiedShow Answer

Table 13-14 -Refer to Table 13-14. What is the fixed cost of production for this firm?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 13-9 -Refer to Table 13-9. The average total cost of producing 240 units is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 13-15 -Refer to Table 13-15. What is average fixed cost when output is 40 units?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 13-9 The figure below depicts average total cost functions for a firm that produces automobiles. -Refer to Figure 13-9. Which of the curves is most likely to characterize the short-run average total cost curve of the smallest factory?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose that Danita owns a cupcake bakery. In the short run, at least one of her inputs is fixed. Provide one or two examples of the types of inputs that could be fixed in the short run.

Correct AnswerverifiedDanita's store size is likely to be fixe...View AnswerShow Answer

On a 100-acre farm, a farmer is able to produce 3,000 bushels of wheat when he hires 2 workers. He is able to produce 4,400 bushels of wheat when he hires 3 workers. Which of the following possibilities is consistent with the property of diminishing marginal product?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Marginal cost is equal to

Correct AnswerverifiedShow Answer

If the average-total-cost curve is falling, then the marginal-cost curve must also be falling.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

​​​Table 13-7 -Refer to Table 13-7. ​What is the marginal product of the third worker?

Correct AnswerverifiedShow Answer

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Danita's store size is likely to be fixe...
View Answer

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Table 13-7 -Refer to Table 13-7. What is the marginal product of the third worker?

Correct Answer
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