Question 1

Kate is a florist. Kate can arrange 20 bouquets per day. She is considering hiring her husband William to work for her. Together Kate and William can arrange 35 bouquets per day. What is William's marginal product?

Accepted Answer

A)  55 bouquets
B)  35 bouquets
C)  22.5 bouquets
D)  15 bouquetsE) A) and C)
F) All of the above

Question 2

Table 13-3 
-Refer to Table 13-3. The marginal product of the fourth worker is

Accepted Answer

A)  10 units.
B)  60 units.
C)  230 units.
D)  240 units.E) A) and B)
F) A) and C)

Question 3

Scenario 13-13
Christine is an artist who creates custom cookie jars. Her annual revenue from selling the cookie jars is $90,000. The annual explicit costs of the materials used to make the cookie jars are $54,000.
-Refer to Scenario 13-13. Christine used $5,000 from her personal savings account to buy pottery tools for her business. The savings account paid 1% annual interest. What is Christine's annual opportunity cost of the financial capital that she invested in her business?

Accepted Answer

A)  $5
B)  $50
C)  $100
D)  $200E) B) and D)
F) A) and D)

Question 4

Scenario 13-14
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 13-14. Farmer Brown's total-cost curve is

Accepted Answer

A)  increasing at an increasing rate.
B)  increasing at a decreasing rate.
C)  increasing at a constant rate.
D)  decreasing.E) B) and C)
F) All of the above

Question 5

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

Question 6

Table 13-14 
-Refer to Table 13-14. What is the total cost of producing 2 units of output?

Accepted Answer

A)  $10
B)  $15
C)  $38
D)  $48E) A) and B)
F) B) and D)

Question 7

A firm produces 300 units of output at a total cost of $1,000. If fixed costs are $100,

Accepted Answer

A)  average fixed cost is $10.
B)  average variable cost is $3.
C)  average total cost is $4.
D)  average total cost is $5.E) A) and B)
F) A) and C)

Question 8

At all levels of production higher than the point where the marginal cost curve crosses the average variable cost curve, average variable cost

Accepted Answer

A)  rises.
B)  remains unaffected.
C)  falls.
D)  All of the above are possible depending on the shape of the marginal cost curve.E) All of the above
F) C) and D)

Question 9

Let L represent the number of workers hired by a firm, and let Q represent that firm's quantity of output. Assume two points on the firm's production function are (L=6,Q=147)  and (L=7,Q=184) . The marginal product of the seventh worker is

Accepted Answer

A)  25 units of output.
B)  27 units of output.
C)  37 units of output.
D)  184 units of output.E) All of the above
F) None of the above

Question 10

The Three Amigo's company produced and sold 500 dog beds. The average cost of production per dog bed was $50. Each dog be sold for a price of $65. The Three Amigo's total costs are

Accepted Answer

A)  $7,500.
B)  $25,000.
C)  $32,500.
D)  $67,500.E) A) and B)
F) A) and C)

Question 11

If a firm uses labor to produce output, the firm's production function depicts the relationship between

Accepted Answer

A)  the number of workers and the quantity of output.
B)  marginal product and marginal cost.
C)  the maximum quantity that the firm can produce as it adds more capital to a fixed quantity of labor.
D)  fixed inputs and variable inputs in the short run.E) A) and C)
F) None of the above

Question 12

When a firm is experiencing diseconomies 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) B) and C)
F) None of the above

Question 13

Ryan sells 200 plastic ball point pens at $0.50 each. His total costs are $25. His profits are

Accepted Answer

A)  $25.
B)  $75.
C)  $100.
D)  $175.E) A) and D)
F) All of the above

Question 14

Consider the following information about baseball production at Bobby's Baseball Factory:  Bobby pays all his workers the same wage, and labor is his only variable cost. From this information we can conclude that Bobby's average variable cost decreases

Accepted Answer

A)  as output rises from 0 to 10, but rises after that.
B)  as output rises from 0 to 26, but rises after that.
C)  as output rises from 0 to 33, but increases after that.
D)  continually as output rises.E) A) and C)
F) A) and B)

Question 15

Let L represent the number of workers hired by a firm, and let Q represent that firm's quantity of output. Assume two points on the firm's production function are (L = 5, Q = 125)  and (L = 6, Q = 152) . Then the marginal product of the 6th worker is

Accepted Answer

A)  25 units of output.
B)  27 units of output.
C)  37 units of output.
D)  162 units of output.E) A) and B)
F) A) and C)

Question 16

Table 13-8 
-Refer to Table 13-8. What is the marginal cost of producing the fifth unit of output?

Accepted Answer

A)  $4
B)  $40
C)  $50
D)  $70E) A) and C)
F) B) and C)

Question 17

Table 13-6
Wooden Chair Factory 
-Refer to Table 13-6. The Wooden Chair Factory experiences diminishing marginal product of labor with the addition of which worker?

Accepted Answer

A)  the third worker
B)  the fourth worker
C)  the fifth worker
D)  the sixth workerE) None of the above
F) All of the above

Question 18

Constant returns to scale occur when a firm's

Accepted Answer

A)  marginal costs are constant as output increases.
B)  long-run average total costs are decreasing as output increases.
C)  long-run average total costs are increasing as output increases.
D)  long-run average total costs do not vary as output increases.E) A) and B)
F) C) and D)

Question 19

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. If Korie purchases the factory with her own money, what is the annual implicit opportunity cost of purchasing the factory?

Accepted Answer

A)  $0
B)  $3,000
C)  $12,000
D)  $15,000E) All of the above
F) C) and D)

Question 20

At low levels of production, the firm

Accepted Answer

A)  benefits from increased size because it can take advantage of greater specialization.
B)  has the potential for economies of scale.
C)  is unlikely to experiences acute problems with coordination.
D)  All of the above are correct.E) A) and B)
F) A) and C)

Exam 13: The Costs of Production

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

Correct Answer
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A firm produces 300 units of output at a total cost of $1,000. If fixed costs are $100,

Correct Answer
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At all levels of production higher than the point where the marginal cost curve crosses the average variable cost curve, average variable cost

Correct Answer
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Ryan sells 200 plastic ball point pens at $0.50 each. His total costs are $25. His profits are

Correct Answer
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Let L represent the number of workers hired by a firm, and let Q represent that firm's quantity of output. Assume two points on the firm's production function are (L = 5, Q = 125) and (L = 6, Q = 152) . Then the marginal product of the 6th worker is

Correct Answer
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Correct Answer
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When a firm is experiencing diseconomies of scale, long-run

Correct Answer
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Consider the following information about baseball production at Bobby's Baseball Factory: Bobby pays all his workers the same wage, and labor is his only variable cost. From this information we can conclude that Bobby's average variable cost decreases

Correct Answer
verified

Kate is a florist. Kate can arrange 20 bouquets per day. She is considering hiring her husband William to work for her. Together Kate and William can arrange 35 bouquets per day. What is William's marginal product?

Correct Answer
verified

The Three Amigo's company produced and sold 500 dog beds. The average cost of production per dog bed was $50. Each dog be sold for a price of $65. The Three Amigo's total costs are

Correct Answer
verified

Table 13-8 -Refer to Table 13-8. What is the marginal cost of producing the fifth unit of output?

Correct Answer
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Correct Answer
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Constant returns to scale occur when a firm's

Correct Answer
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At low levels of production, the firm

Correct Answer
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Table 13-6 Wooden Chair Factory -Refer to Table 13-6. The Wooden Chair Factory experiences diminishing marginal product of labor with the addition of which worker?

Correct Answer
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Correct Answer
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Table 13-3 -Refer to Table 13-3. The marginal product of the fourth worker is

Correct Answer
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If a firm uses labor to produce output, the firm's production function depicts the relationship between

Correct Answer
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Table 13-14 -Refer to Table 13-14. What is the total cost of producing 2 units of output?

Correct Answer
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Let L represent the number of workers hired by a firm, and let Q represent that firm's quantity of output. Assume two points on the firm's production function are (L=6,Q=147) and (L=7,Q=184) . The marginal product of the seventh worker is

Correct Answer
verified

Exam 13: The Costs of Production

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

Correct AnswerverifiedShow Answer

A firm produces 300 units of output at a total cost of $1,000. If fixed costs are $100,

Correct AnswerverifiedShow Answer

At all levels of production higher than the point where the marginal cost curve crosses the average variable cost curve, average variable cost

Correct AnswerverifiedShow Answer

Ryan sells 200 plastic ball point pens at $0.50 each. His total costs are $25. His profits are

Correct AnswerverifiedShow Answer

Let L represent the number of workers hired by a firm, and let Q represent that firm's quantity of output. Assume two points on the firm's production function are (L = 5, Q = 125) and (L = 6, Q = 152) . Then the marginal product of the 6th worker is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Consider the following information about baseball production at Bobby's Baseball Factory: Bobby pays all his workers the same wage, and labor is his only variable cost. From this information we can conclude that Bobby's average variable cost decreases

Correct AnswerverifiedShow Answer

Kate is a florist. Kate can arrange 20 bouquets per day. She is considering hiring her husband William to work for her. Together Kate and William can arrange 35 bouquets per day. What is William's marginal product?

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The Three Amigo's company produced and sold 500 dog beds. The average cost of production per dog bed was $50. Each dog be sold for a price of $65. The Three Amigo's total costs are

Correct AnswerverifiedShow Answer

Table 13-8 -Refer to Table 13-8. What is the marginal cost of producing the fifth unit of output?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Constant returns to scale occur when a firm's

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At low levels of production, the firm

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Table 13-6 Wooden Chair Factory -Refer to Table 13-6. The Wooden Chair Factory experiences diminishing marginal product of labor with the addition of which worker?

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Table 13-3 -Refer to Table 13-3. The marginal product of the fourth worker is

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If a firm uses labor to produce output, the firm's production function depicts the relationship between

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Table 13-14 -Refer to Table 13-14. What is the total cost of producing 2 units of output?

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Let L represent the number of workers hired by a firm, and let Q represent that firm's quantity of output. Assume two points on the firm's production function are (L=6,Q=147) and (L=7,Q=184) . The marginal product of the seventh worker is

Correct AnswerverifiedShow Answer

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