Question 1

Accountants include _______ costs as part of a firmʹs costs, while economists include _______ costs.

Accepted Answer

A)  explicit; no explicit
B)  implicit; no implicit
C)  explicit and implicit; implicit
D)  explicit; explicit and implicitE) None of the above
F) All of the above

Question 2

A firm experiences diminishing marginal returns because:

Accepted Answer

A)  all factors of production are variable.
B)  people ʺlearn by doing.ʺ
C)  all factors of production are fixed.
D)  at least one factor of production is fixed.E) B) and C)
F) A) and D)

Question 3

-Figure 5.3 shows a firmʹs marginal cost, average total cost, and average variable cost curves. At Q=100, the average fixed cost is:

Accepted Answer

A)  $30.
B)  $40.
C)  $50.
D)  $60.E) B) and D)
F) B) and C)

Question 4

Other things being equal, if the average fixed cost curve shifts upward at all output levels,

Accepted Answer

A)  the marginal cost curve shifts upward at all output levels.
B)  the average variable cost curve shifts upward at all output levels.
C)  the average total cost curve remains unchanged at all output levels.
D)  the vertical distance between the average total cost curve and the average variable cost curve increases at all output levels.E) B) and C)
F) A) and D)

Question 5

_______ are costs that require a monetary payment.

Accepted Answer

A)  Implicit costs
B)  Explicit costs
C)  Accounting costs
D)  B and C are correct.E) None of the above
F) A) and D)

Question 6

The minimum efficient scale is:

Accepted Answer

A)  the quantity after which it makes no sense for a firm to produce.
B)  the minimum quantity where a firm would be able to produce profitably.
C)  the output level beyond which the firm will not experience scale economies.
D)  the output level beyond which the firm will experience scale economies.E) A) and C)
F) A) and D)

Question 7

Which of the following is a short-run adjustment?

Accepted Answer

A)  Three new firms enter the computer chip industry.
B)  A firm hires six new workers.
C)  The number of farms in Kansas increases by 10%.
D)  A firm opens two new plants.E) A) and D)
F) None of the above

Question 8

Suppose that your firmʹs marginal cost of producing a pencil is 5 cents and the average cost of producing a pencil is 7 cents. If your firm is interested in minimizing average total costs, what should your firm do?

Accepted Answer

A)  Increase production.
B)  Decrease production.
C)  Maintain production at the current level.
D)  Look for ways to increase fixed costs.E) All of the above
F) B) and C)

Question 9

Figure 5.1
-Refer to Figure 5.1, which shows a family of average cost curves. Why does the vertical distance between Curve 1 and Curve 2 decrease as output increases from Q1 to Q2?

Accepted Answer

A)  Because average variable cost first decreases, then increases as output increases from Q1 to Q2.
B)  Because average fixed cost decreases as output increases from Q1 to Q2.
C)  Because average total cost first decreases, then increases as output increases from Q1 to Q2.
D)  Because average variable cost increases faster than average fixed cost as output level approaches Q2.E) A) and B)
F) C) and D)

Question 10

Recall the Application about the manufacture of fake killer whales used to scare sea lions off the Washington coast to answer the following question(s).
-Recall the Application. What is the indivisible input and what are its implications for economies or diseconomies of scale?

Accepted Answer

The mold used to produce each ...

Question 11

If marginal cost is increasing, average variable cost must also be increasing.

Accepted Answer

A) True 
 B)False

Question 12

Average variable costs are minimized when:

Accepted Answer

A)  marginal costs begin to increase.
B)  marginal costs begin to decrease.
C)  marginal cost is greater than average total cost.
D)  marginal cost equals average variable cost.E) A) and B)
F) B) and C)

Question 13

In the short run, _______ factors of production are fixed, while in the long run, _______ of them are.

Accepted Answer

A)  some; none
B)  all; none
C)  no; at least some
D)  all; at least someE) A) and B)
F) A) and C)

Question 14

Average total costs are minimized when:

Accepted Answer

A)  marginal costs begin to increase.
B)  marginal costs begin to decrease.
C)  marginal cost is greater than average total cost.
D)  marginal cost equals average total cost.E) None of the above
F) B) and D)

Question 15

Number of Cakes V C M CA V C F C T C A T C I 501302503254155\begin{array} { | c | c | c | c | c | c | c | } \hline 	ext { Number of Cakes } & 	ext {V C} &	ext { M C} & 	ext {A V C }& 	ext {F C} &	ext { T C }& 	ext {A T C} \\hline 	ext { I } & & & & 50 & & \\hline 1 & & 30 & & & & \\hline 2 & & & & & & 50 \\hline  3& & & 25 & & & \\hline 4 & & & & & 155 & \\hline\end{array} Number of Cakes  I 1234​V C​ M C30​A V C 25​F C50​ T C 155​A T C50​​  Table 5.3
-Table 5.3 presents the cost schedule for Candyʹs Cakes. If Candy produces three cakes, Candyʹs marginal costs are:

Accepted Answer

A)  $0.
B)  $25.
C)  $41.67.
D)  $75. E) A) and B)
F) None of the above

Question 16

Figure 5.1
-Refer to Figure 5.1, which shows a family of average cost curves. The average fixed cost at a given level of output is represented by:

Accepted Answer

A)  the vertical distance between Curve 1 and Curve 2 at a given level of output.
B)  the vertical distance between Curve 1 and Curve 3 at a given level of output.
C)  the vertical sum of Curve 1 and Curve 2 at a given level of output.
D)  the vertical sum of Curve 1 and Curve 3 at a given level of output.E) B) and C)
F) A) and D)

Question 17

The minimum efficient scale is the output at which the long-run average cost curve becomes horizontal.

Accepted Answer

A) True 
 B)False

Question 18

If the long-run average total cost curve is rising as output increases, then the firm faces diseconomies of scale.

Accepted Answer

A) True 
 B)False

Question 19

The increase in total cost resulting from producing one more unit of output is the marginal cost.

Accepted Answer

A) True 
 B)False

Question 20

Draw a graph showing the long -run average cost curve for a firm that experiences economies of scale.

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> As shown in the graph, the lo...

Exam 5: Production Technology and Cost

The increase in total cost resulting from producing one more unit of output is the marginal cost.

Correct Answer
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Other things being equal, if the average fixed cost curve shifts upward at all output levels,

Correct Answer
verified

Correct Answer
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Average variable costs are minimized when:

Correct Answer
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Draw a graph showing the long -run average cost curve for a firm that experiences economies of scale.

Correct Answer
verified
As shown in the graph, the lo...
View Answer

_______ are costs that require a monetary payment.

Correct Answer
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Recall the Application about the manufacture of fake killer whales used to scare sea lions off the Washington coast to answer the following question(s). -Recall the Application. What is the indivisible input and what are its implications for economies or diseconomies of scale?

Correct Answer
verified
The mold used to produce each ...
View Answer

Average total costs are minimized when:

Correct Answer
verified

A firm experiences diminishing marginal returns because:

Correct Answer
verified

Which of the following is a short-run adjustment?

Correct Answer
verified

The minimum efficient scale is the output at which the long-run average cost curve becomes horizontal.

Correct Answer
verified

Figure 5.1 -Refer to Figure 5.1, which shows a family of average cost curves. Why does the vertical distance between Curve 1 and Curve 2 decrease as output increases from Q1 to Q2?

Correct Answer
verified

Accountants include _ costs as part of a firmʹs costs, while economists include _ costs.

Correct Answer
verified

In the short run, _ factors of production are fixed, while in the long run, _ of them are.

Correct Answer
verified

-Figure 5.3 shows a firmʹs marginal cost, average total cost, and average variable cost curves. At Q=100, the average fixed cost is:

Correct Answer
verified

If the long-run average total cost curve is rising as output increases, then the firm faces diseconomies of scale.

Correct Answer
verified

The minimum efficient scale is:

Correct Answer
verified

If marginal cost is increasing, average variable cost must also be increasing.

Correct Answer
verified

Suppose that your firmʹs marginal cost of producing a pencil is 5 cents and the average cost of producing a pencil is 7 cents. If your firm is interested in minimizing average total costs, what should your firm do?

Correct Answer
verified

Figure 5.1 -Refer to Figure 5.1, which shows a family of average cost curves. The average fixed cost at a given level of output is represented by:

Correct Answer
verified

Exam 5: Production Technology and Cost

The increase in total cost resulting from producing one more unit of output is the marginal cost.

Correct AnswerverifiedShow Answer

Other things being equal, if the average fixed cost curve shifts upward at all output levels,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Average variable costs are minimized when:

Correct AnswerverifiedShow Answer

Draw a graph showing the long -run average cost curve for a firm that experiences economies of scale.

Correct Answerverified As shown in the graph, the lo...View AnswerShow Answer

_______ are costs that require a monetary payment.

Correct AnswerverifiedShow Answer

Recall the Application about the manufacture of fake killer whales used to scare sea lions off the Washington coast to answer the following question(s). -Recall the Application. What is the indivisible input and what are its implications for economies or diseconomies of scale?

Correct AnswerverifiedThe mold used to produce each ...View AnswerShow Answer

Average total costs are minimized when:

Correct AnswerverifiedShow Answer

A firm experiences diminishing marginal returns because:

Correct AnswerverifiedShow Answer

Which of the following is a short-run adjustment?

Correct AnswerverifiedShow Answer

The minimum efficient scale is the output at which the long-run average cost curve becomes horizontal.

Correct AnswerverifiedShow Answer

Figure 5.1 -Refer to Figure 5.1, which shows a family of average cost curves. Why does the vertical distance between Curve 1 and Curve 2 decrease as output increases from Q1 to Q2?

Correct AnswerverifiedShow Answer

Accountants include _______ costs as part of a firmʹs costs, while economists include _______ costs.

Correct AnswerverifiedShow Answer

In the short run, _______ factors of production are fixed, while in the long run, _______ of them are.

Correct AnswerverifiedShow Answer

-Figure 5.3 shows a firmʹs marginal cost, average total cost, and average variable cost curves. At Q=100, the average fixed cost is:

Correct AnswerverifiedShow Answer

If the long-run average total cost curve is rising as output increases, then the firm faces diseconomies of scale.

Correct AnswerverifiedShow Answer

The minimum efficient scale is:

Correct AnswerverifiedShow Answer

If marginal cost is increasing, average variable cost must also be increasing.

Correct AnswerverifiedShow Answer

Suppose that your firmʹs marginal cost of producing a pencil is 5 cents and the average cost of producing a pencil is 7 cents. If your firm is interested in minimizing average total costs, what should your firm do?

Correct AnswerverifiedShow Answer

Figure 5.1 -Refer to Figure 5.1, which shows a family of average cost curves. The average fixed cost at a given level of output is represented by:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
As shown in the graph, the lo...
View Answer

Correct Answer
verified

Correct Answer
verified
The mold used to produce each ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Accountants include _ costs as part of a firmʹs costs, while economists include _ costs.

Correct Answer
verified

In the short run, _ factors of production are fixed, while in the long run, _ of them are.

Correct Answer
verified

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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