Question 1

How long does it take a firm to go from the short run to the long run?

Accepted Answer

A)   six months
B)   one year
C)   two years
D)   It depends on the nature of the firm.E) B) and C)
F) None of the above

Question 2

Suppose that a firm's long­run average total costs of producing televisions decreases as it produces between 10,000 and 20,000 televisions. For this range of output, the firm is experiencing

Accepted Answer

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

Question 3

Scenario 13-6
Ziva is an organic lettuce farmer, but she also spends part of her day as a professional organizing consultant. As a consultant, Ziva helps people organize their houses. Due to the popularity of her home-organization services, Farmer Ziva has more clients requesting her services than she has time to help if she maintains her farming business. Farmer Ziva charges $25 an hour for her home-organization services. One spring day, Ziva spends 10 hours in her fields planting $130 worth of seeds on her farm. She expects that the seeds she planted will yield $300 worth of lettuce.
-Refer to Scenario 13-6. An economist would calculate Ziva's total cost of farming to equal

Accepted Answer

A)   $130.
B)   $250.
C)   $300.
D)   $380.E) All of the above
F) A) and B)

Question 4

Table 13-18
 
-Refer to Table 13-18. What is the shape of the firm's total­cost curve?

Accepted Answer

The firm's total­cost curve wo...

Question 5

Which of the following statements about a production function is correct for a firm that uses labor to produce output?

Accepted Answer

A)   The production function depicts the relationship between the quantity of labor and the quantity of output.
B)   The slope of the production function measures marginal product.
C)   The slopes of the production function and the total cost curve are inversely related; if one is increasing, the other is decreasing.
D)   All of the above are correct.E) B) and C)
F) All of the above

Question 6

Economists in the field of industrial organization study how

Accepted Answer

A)   central banking policies affect financial markets.
B)   firms' demand for labor and individuals' supply of labor affect resource markets.
C)   firms' decisions about prices and quantities depend on market conditions.
D)   externalities and public goods affect the environment.E) None of the above
F) B) and C)

Question 7

Scenario 13-10
Jessica makes photo frames. She spends $5 on the materials for each photo frame. She can create one photo frame in an hour. She earns $10 per hour at a part-time job at the local coffee shop. She can sell a photo frame for $30 each.
-Refer to Scenario 13-10. An economist would calculate the total cost for one photo frame to be

Accepted Answer

A)   $10.
B)   $5.
C)   $15.
D)   $25.E) C) and D)
F) A) and D)

Question 8

When a firm is experiencing economies of scale, long-run

Accepted Answer

A)   average total cost is minimized.
B)   average total cost is greater than long-run marginal cost.
C)   average total cost is less than long-run marginal cost.
D)   marginal cost is minimized.E) A) and D)
F) A) and C)

Question 9

Table 13-2
 
-Refer to Table 13-2. At which number of workers does diminishing marginal product begin?

Accepted Answer

A)   1
B)   2
C)   3
D)   4E) C) and D)
F) A) and D)

Question 10

Table 13-18
 
-Refer to Table 13-18. What is the marginal product of the sixth worker?

Accepted Answer

Total output of four workers =...

Question 11

When a firm's long­run average total costs do not vary as output increases, the firm exhibits

Accepted Answer

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

Question 12

Suppose that a firm's long­run average total costs of producing custom wooden picnic tables is $300 when it produces 10,000 tables and $325 when it produces 11,000 tables. For this range of output, the firm is experiencing

Accepted Answer

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

Question 13

Scenario 13-1
Korie wants to start her own business making custom furniture. She can purchase a factory that costs $400,000. Korie currently has $500,000 in the bank earning 3 percent interest per year.
-Refer to Scenario 13-1. Suppose Korie purchases the factory using $200,000 of her own money and $200,000 borrowed from a bank at an interest rate of 6 percent. What is Korie's annual opportunity cost of purchasing the factory?

Accepted Answer

A)   $3,000
B)   $6,000
C)   $15,000
D)   $18,000E) B) and D)
F) B) and C)

Question 14

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

Question 15

The average-total-cost curve is unaffected by diminishing marginal product.

Accepted Answer

A) True 
 B)False

Question 16

Table 13-18
 
-Refer to Table 13-18. What is the marginal product of the third worker?

Accepted Answer

450 - 350 ...

Question 17

If a firm experiences constant returns to scale at all output levels, then its long-run average total cost curve would

Accepted Answer

A)   slope downward.
B)   be horizontal.
C)   slope upward.
D)   slope downward for low output levels and upward for high output levels.E) All of the above
F) C) and D)

Question 18

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

Question 19

Table 13-19
 
-Refer to Table 13-19. What is the shape of the average-total-cost curve?

Accepted Answer

ATC = TC/Q, where TC is graphed on the v...

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

Exam 13: The Costs of Production

Table 13-18 -Refer to Table 13-18. What is the marginal product of the sixth worker?

Correct Answer
verified
Total output of four workers =...
View Answer

Table 13-19 -Refer to Table 13-19. What is the shape of the average-total-cost curve?

Correct Answer
verified
ATC = TC/Q, where TC is graphed on the v...
View Answer

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

Correct Answer
verified

When a firm's longrun average total costs do not vary as output increases, the firm exhibits

Correct Answer
verified

Suppose that a firm's longrun average total costs of producing televisions decreases as it produces between 10,000 and 20,000 televisions. For this range of output, the firm is experiencing

Correct Answer
verified

Table 13-18 -Refer to Table 13-18. What is the shape of the firm's totalcost curve?

Correct Answer
verified
The firm's totalcost curve wo...
View Answer

When a firm experiences diseconomies of scale,

Correct Answer
verified

Suppose that a firm's longrun average total costs of producing custom wooden picnic tables is $300 when it produces 10,000 tables and $325 when it produces 11,000 tables. For this range of output, the firm is experiencing

Correct Answer
verified

Correct Answer
verified

How long does it take a firm to go from the short run to the long run?

Correct Answer
verified

An example of an explicit cost of production would be the

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

If a firm experiences constant returns to scale at all output levels, then its long-run average total cost curve would

Correct Answer
verified

Which of the following statements about a production function is correct for a firm that uses labor to produce output?

Correct Answer
verified

Table 13-2 -Refer to Table 13-2. At which number of workers does diminishing marginal product begin?

Correct Answer
verified

Economists in the field of industrial organization study how

Correct Answer
verified

The average-total-cost curve is unaffected by diminishing marginal product.

Correct Answer
verified

Table 13-18 -Refer to Table 13-18. What is the marginal product of the third worker?

Correct Answer
verified
450 - 350 ...
View Answer

When a firm is experiencing economies of scale, long-run

Correct Answer
verified

Exam 13: The Costs of Production

Table 13-18 -Refer to Table 13-18. What is the marginal product of the sixth worker?

Correct AnswerverifiedTotal output of four workers =...View AnswerShow Answer

Table 13-19 -Refer to Table 13-19. What is the shape of the average-total-cost curve?

Correct AnswerverifiedATC = TC/Q, where TC is graphed on the v...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

When a firm's long­run average total costs do not vary as output increases, the firm exhibits

Correct AnswerverifiedShow Answer

Suppose that a firm's long­run average total costs of producing televisions decreases as it produces between 10,000 and 20,000 televisions. For this range of output, the firm is experiencing

Correct AnswerverifiedShow Answer

Table 13-18 -Refer to Table 13-18. What is the shape of the firm's total­cost curve?

Correct AnswerverifiedThe firm's total­cost curve wo...View AnswerShow Answer

When a firm experiences diseconomies of scale,

Correct AnswerverifiedShow Answer

Suppose that a firm's long­run average total costs of producing custom wooden picnic tables is $300 when it produces 10,000 tables and $325 when it produces 11,000 tables. For this range of output, the firm is experiencing

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

How long does it take a firm to go from the short run to the long run?

Correct AnswerverifiedShow Answer

An example of an explicit cost of production would be the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If a firm experiences constant returns to scale at all output levels, then its long-run average total cost curve would

Correct AnswerverifiedShow Answer

Which of the following statements about a production function is correct for a firm that uses labor to produce output?

Correct AnswerverifiedShow Answer

Table 13-2 -Refer to Table 13-2. At which number of workers does diminishing marginal product begin?

Correct AnswerverifiedShow Answer

Economists in the field of industrial organization study how

Correct AnswerverifiedShow Answer

The average-total-cost curve is unaffected by diminishing marginal product.

Correct AnswerverifiedShow Answer

Table 13-18 -Refer to Table 13-18. What is the marginal product of the third worker?

Correct Answerverified450 - 350 ...View AnswerShow Answer

When a firm is experiencing economies of scale, long-run

Correct AnswerverifiedShow Answer

Correct Answer
verified
Total output of four workers =...
View Answer

Correct Answer
verified
ATC = TC/Q, where TC is graphed on the v...
View Answer

Correct Answer
verified

When a firm's longrun average total costs do not vary as output increases, the firm exhibits

Correct Answer
verified

Suppose that a firm's longrun average total costs of producing televisions decreases as it produces between 10,000 and 20,000 televisions. For this range of output, the firm is experiencing

Correct Answer
verified

Table 13-18 -Refer to Table 13-18. What is the shape of the firm's totalcost curve?

Correct Answer
verified
The firm's totalcost curve wo...
View Answer

Correct Answer
verified

Suppose that a firm's longrun average total costs of producing custom wooden picnic tables is $300 when it produces 10,000 tables and $325 when it produces 11,000 tables. For this range of output, the firm is experiencing

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
450 - 350 ...
View Answer

Correct Answer
verified