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Exam 12: The Costs of Production

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Question 21

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If a firm increases production,then its:

A) variable costs rise.
B) fixed costs stay the same.
C) total costs increase.
D) All of these are true.

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

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Question 22

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Total cost includes:

A) one-time expenses and ongoing expenses.
B) forgone opportunity costs.
C) the amount the firm spends on all inputs that go into the production of a good or service.
D) All of these are true.

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

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Question 23

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In business,the "bottom line" refers to the very last line of a(n) :

Returns that occur in the long run when average total cost does not depend on the quantity of output are called:

The amount that a firm receives from the sale of goods and services is called:

Average total cost:

Marginal cost is:

When accounting profits are zero,which of the following is most likely to be true?

Suppose Larry's Lariats produces lassos in a factory,and uses nine feet of rope to make each lasso.The rope is put into a machine that automatically cuts it to the right length,then seals the ends to prevent fraying.The rope is then hand tied,dipped,and wound before being placed in a packaging machine to prepare it for retail sale.Which of the following would be considered a variable cost for this company?

Suppose Chip's Chips produces bags of potato chips that sell for $3 a bag.What was the total revenue for Chip's Chips?

Average variable costs:

If a firm stops production,then its:

When economic profits are negative,accounting profits could be:

A firm currently employs four workers in a sandwich shop,and produces sandwiches as a total cost per sandwich (ATC) of $3.The sandwiches sell for $5.If the marginal cost of hiring another worker to produce sandwiches is $5.50 per sandwich,then:

Suppose Winston's annual salary as an accountant is $60,000,and his financial assets generate $4,000 per year in interest.One day,after deciding to be his own boss,he quits his job and uses his financial assets to establish a consulting business,which he runs out of his home.To run the business,he outlays $8,000 in cash to cover all the costs involved with running the business,and earns revenues of $150,000.What are Winston's explicit costs?

Mike wants to open his own repair shop,and is considering using his savings of $30,000 to get it started.He is currently earning 3 percent interest on his savings.His friend Bob calls him and asks to borrow $30,000 to start up a bagel shop;Bob offers to pay him 5 percent interest if he loans him the money.If Mike were to use the money to open his own repair shop,how can he accurately account for his costs?

Suppose Larry's Lariats produces lassos in a factory,and uses nine feet of rope to make each lasso.The rope is put into a machine that automatically cuts it to the right length,then seals the ends to prevent fraying.The rope is then hand tied,dipped,and wound before being placed in a packaging machine to prepare it for retail sale.If Larry were to decrease the production of lassos,which of the following is true regarding the company's costs?

Which of the following would be considered a one-time expense?

In general,the cost of an input:

In general,economic profits are: