Question 1

Which of the following would be an example of an implicit cost?
(i) forgone investment opportunities
(ii) wages of workers
(iii) raw materials costs

Accepted Answer

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

Question 2

Table 13-1 
-Refer to Table 13-1. What is total output when 1 worker is hired?

Accepted Answer

A)  10
B)  30
C)  45
D)  75E) A) and C)
F) B) and C)

Question 3

Table 13-18 
-Refer to Table 13-18. What is the shape of the marginal-cost curve?

Accepted Answer

MC = change in TC / change in Q, so alth...

Question 4

Table 13-10 
-Refer to Table 13-10. The average variable cost of producing 240 units of output is

Accepted Answer

A)  $0.06.
B)  $0.38.
C)  $0.44.
D)  $30.E) A) and B)
F) A) and C)

Question 5

At Bert's Bootery, the total cost of producing twenty pairs of boots is $400. The marginal cost of producing the twenty-first pair of boots is $83. We can conclude that the

Accepted Answer

A)  average variable cost of 21 pairs of boots is $23.
B)  average total cost of 21 pairs of boots is $23.
C)  average total cost of 21 pairs of boots is $15.09.
D)  marginal cost of the 20th pair of boots is $20.E) C) and D)
F) All of the above

Question 6

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

Accepted Answer

A)  ​215
B)  ​30
C)  ​25
D)  ​190E) None of the above
F) A) and D)

Question 7

In the long run the local coffee shop incurs total costs of $625 when output is 1,250 cups of coffee and $750 when output is 1,500 cups of coffee. For this range of output, the coffee shop exhibits

Accepted Answer

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

Question 8

A production function describes

Accepted Answer

A)  how a firm maximizes profits.
B)  how a firm turns inputs into output.
C)  the minimal cost of producing a given level of output.
D)  the relationship between cost and output.E) A) and B)
F) A) and D)

Question 9

Which of the following measures of cost is best described as "the increase in total cost that arises from an extra unit of production?"

Accepted Answer

A)  variable cost
B)  average variable cost
C)  average total cost
D)  marginal costE) C) and D)
F) None of the above

Question 10

Table 13-6
Wooden Chair Factory 
-Refer to Table 13-6. Each worker at the Wooden Chair Factory costs $12 per hour. The cost of each machine is $20 per day regardless of the number of chairs produced. If the factory produces at a rate of 35 chairs per hour, what is the total labor cost per hour?

Accepted Answer

A)  $40
B)  $48
C)  $384
D)  $424E) C) and D)
F) All of the above

Question 11

Which of the following statements is correct?

Accepted Answer

A)  Opportunity costs equal explicit minus implicit costs.
B)  Economists consider opportunity costs to be included in a firm's total revenues.
C)  Economists consider opportunity costs to be included in a firm's costs of production.
D)  All of the above are correct.E) A) and C)
F) None of the above

Question 12

An example of an opportunity cost that is also an implicit cost is

Accepted Answer

A)  a lease payment.
B)  the cost of raw materials.
C)  the value of the business owner's time.
D)  All of the above are correct.E) A) and B)
F) A) and C)

Question 13

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

Question 14

For a construction company that builds houses, which of the following costs would be a fixed cost?

Accepted Answer

A)  the $20 per hour wage paid to a construction foreman
B)  the $30,000 per year salary paid to the company's bookkeeper
C)  the $2 per worker-hour paid to the state government for workers' compensation insurance
D)  All of the above are correct.E) None of the above
F) B) and C)

Question 15

Describe the difference between the short run and the long run.

Accepted Answer

In the short run, the firm con...

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 2 workers, the total cost of production is $100. When the firm hires 3 workers, the total cost of production is $120. In addition, assume that the variable cost per unit of labor is the same regardless of the number of units of labor that are hired. What is the firm's fixed cost?

Accepted Answer

A)  $40
B)  $60
C)  $80
D)  $100E) A) and D)
F) B) and C)

Question 17

Explicit costs

Accepted Answer

A)  do not require an outlay of money by the firm.
B)  enter into the accountant's measurement of a firm's profit.
C)  enter into the economist's measurement of a firm's profit.
D)  Both b and c are correct.E) A) and B)
F) All of the above

Question 18

If marginal cost is equal to average total cost, then

Accepted Answer

A)  marginal cost is minimized.
B)  average total cost is minimized.
C)  average variable cost is minimized.
D)  marginal cost is zero.E) C) and D)
F) B) and D)

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 curve represents the long-run average total cost?

Accepted Answer

A)  ATCA
B)  ATCB
C)  ATCC
D)  ATCDE) All of the above
F) C) and D)

Question 20

When comparing short-run average total cost with long-run average total cost at a given level of output,

Accepted Answer

A)  short-run average total cost is typically above long-run average total cost.
B)  short-run average total cost is typically the same as long-run average total cost.
C)  short-run average total cost is typically below long-run average total cost.
D)  the relationship between short-run and long-run average total cost follows no clear pattern.E) All of the above
F) A) and B)

Exam 13: The Costs of Production

Explicit costs

Correct Answer
verified

An example of an opportunity cost that is also an implicit cost is

Correct Answer
verified

Which of the following would be an example of an implicit cost? (i) forgone investment opportunities (ii) wages of workers (iii) raw materials costs

Correct Answer
verified

Table 13-10 -Refer to Table 13-10. The average variable cost of producing 240 units of output is

Correct Answer
verified

Table 13-6 Wooden Chair Factory -Refer to Table 13-6. Each worker at the Wooden Chair Factory costs $12 per hour. The cost of each machine is $20 per day regardless of the number of chairs produced. If the factory produces at a rate of 35 chairs per hour, what is the total labor cost per hour?

Correct Answer
verified

A production function describes

Correct Answer
verified

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

Correct Answer
verified

At Bert's Bootery, the total cost of producing twenty pairs of boots is $400. The marginal cost of producing the twenty-first pair of boots is $83. We can conclude that the

Correct Answer
verified

In the long run the local coffee shop incurs total costs of $625 when output is 1,250 cups of coffee and $750 when output is 1,500 cups of coffee. For this range of output, the coffee shop exhibits

Correct Answer
verified

Correct Answer
verified

If marginal cost is equal to average total cost, then

Correct Answer
verified

Which of the following measures of cost is best described as "the increase in total cost that arises from an extra unit of production?"

Correct Answer
verified

Figure 13-9 The figure below depicts average total cost functions for a firm that produces automobiles. -Refer to Figure 13-9. Which curve represents the long-run average total cost?

Correct Answer
verified

Table 13-1 -Refer to Table 13-1. What is total output when 1 worker is hired?

Correct Answer
verified

Table 13-18 -Refer to Table 13-18. What is the shape of the marginal-cost curve?

Correct Answer
verified
MC = change in TC / change in Q, so alth...
View Answer

Describe the difference between the short run and the long run.

Correct Answer
verified
In the short run, the firm con...
View Answer

Which of the following statements is correct?

Correct Answer
verified

When comparing short-run average total cost with long-run average total cost at a given level of output,

Correct Answer
verified

For a construction company that builds houses, which of the following costs would be a fixed cost?

Correct Answer
verified

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

Correct Answer
verified

Exam 13: The Costs of Production

Explicit costs

Correct AnswerverifiedShow Answer

An example of an opportunity cost that is also an implicit cost is

Correct AnswerverifiedShow Answer

Which of the following would be an example of an implicit cost? (i) forgone investment opportunities (ii) wages of workers (iii) raw materials costs

Correct AnswerverifiedShow Answer

Table 13-10 -Refer to Table 13-10. The average variable cost of producing 240 units of output is

Correct AnswerverifiedShow Answer

Table 13-6 Wooden Chair Factory -Refer to Table 13-6. Each worker at the Wooden Chair Factory costs $12 per hour. The cost of each machine is $20 per day regardless of the number of chairs produced. If the factory produces at a rate of 35 chairs per hour, what is the total labor cost per hour?

Correct AnswerverifiedShow Answer

A production function describes

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

At Bert's Bootery, the total cost of producing twenty pairs of boots is $400. The marginal cost of producing the twenty-first pair of boots is $83. We can conclude that the

Correct AnswerverifiedShow Answer

In the long run the local coffee shop incurs total costs of $625 when output is 1,250 cups of coffee and $750 when output is 1,500 cups of coffee. For this range of output, the coffee shop exhibits

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If marginal cost is equal to average total cost, then

Correct AnswerverifiedShow Answer

Which of the following measures of cost is best described as "the increase in total cost that arises from an extra unit of production?"

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 curve represents the long-run average total cost?

Correct AnswerverifiedShow Answer

Table 13-1 -Refer to Table 13-1. What is total output when 1 worker is hired?

Correct AnswerverifiedShow Answer

Table 13-18 -Refer to Table 13-18. What is the shape of the marginal-cost curve?

Correct AnswerverifiedMC = change in TC / change in Q, so alth...View AnswerShow Answer

Describe the difference between the short run and the long run.

Correct AnswerverifiedIn the short run, the firm con...View AnswerShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

When comparing short-run average total cost with long-run average total cost at a given level of output,

Correct AnswerverifiedShow Answer

For a construction company that builds houses, which of the following costs would be a fixed cost?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
MC = change in TC / change in Q, so alth...
View Answer

Correct Answer
verified
In the short run, the firm con...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified