Question 1

-Refer to Table 13-4. Charles's math tutoring company experiences diminishing marginal productivity with the addition of the

Accepted Answer

A)  first worker.
B)  second worker.
C)  third worker.
D)  fourth worker.E) A) and B)
F) A) and C)

Question 2

If the marginal cost of producing the tenth unit of output is $2.50, and if the average total cost of producing the tenth unit of output is $3, then at ten units of output, average total cost is rising.

Accepted Answer

A) True 
 B)False

Question 3

Diseconomies of scale often arise because higher production levels allow specialization among workers.

Accepted Answer

A) True 
 B)False

Question 4

When a firm's only variable input is labor, then the slope of the production function measures the

Accepted Answer

A)  quantity of labor.
B)  quantity of output.
C)  total cost.
D)  marginal product of labor.E) None of the above
F) A) and D)

Question 5

Scenario 13-7
Julia prepares tax returns and does bookkeeping. Last year her revenues from the tax and bookkeeping business were $150,000, and her expenses for the business were $15,000. When she started her tax and bookkeeping business, Julia gave up her supplemental job doing in-home pet sitting. She used to earn $10,000 per year from pet sitting. Assume that she incurred no costs for her pet sitting business.
-Refer to Scenario 13-7. Julia's implicit costs are

Accepted Answer

A)  0.
B)  $10,000.
C)  $15,000.
D)  $25,000.E) A) and B)
F) B) and D)

Question 6

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 profit for one photo frame to be

Accepted Answer

A)  $10.
B)  $15.
C)  $20.
D)  $25.E) B) and C)
F) A) and C)

Question 7

The amount of money that a firm receives from the sale of its output is called

Accepted Answer

A)  total gross profit.
B)  total net profit.
C)  total revenue.
D)  net revenue.E) B) and C)
F) A) and D)

Question 8

Suppose that Christine owns her own CPA firm. She uses only two inputs in her business: her hours worked (labor)  and a computer (capital) . In the short run, Christine most likely considers

Accepted Answer

A)  both labor and capital to be fixed.
B)  both labor and capital to be variable.
C)  capital to be variable and labor to be fixed.
D)  labor to be variable and capital to be fixed.E) A) and B)
F) All of the above

Question 9

Accountants often ignore implicit costs.

Accepted Answer

A) True 
 B)False

Question 10

The shape of the total-cost curve is inversely related to the shape of the production function.

Accepted Answer

A) True 
 B)False

Question 11

Table 13-19 
-Refer to Table 13-19. What is the average fixed cost of producing 430 units of output?

Accepted Answer

AFC = FC/Q...

Question 12

​Table 13-16 
-Refer to Table 13-16. What is the marginal cost of the 4th unit of output?

Accepted Answer

A)  $​40
B)  ​$52
C)  ​$68
D)  ​$136E) All of the above
F) A) and B)

Question 13

Scenario 13-8
Wanda owns a lemonade stand. She produces lemonade using five inputs: water, sugar, lemons, paper cups, and labor. Her costs per glass are as follows: $0.01 for water, $0.02 for sugar, $0.03 for lemons, $0.02 for cups, and $0.10 for the opportunity cost of her labor. She can sell 300 glasses for $0.50 each.
-Refer to Scenario 13-8. What are Wanda's total accounting profits?

Accepted Answer

A)  $150
B)  $126
C)  $96
D)  $24E) A) and D)
F) A) and B)

Question 14

Riva crafts and sells hard cider as a part-time job. She can bottle and sell four cases in a week. She is considering hiring her friend Atul to help her. Together, Riva and Atul can bottle and sell seven cases per week. What is Atul's marginal product?

Accepted Answer

A)  2 cases
B)  3 cases
C)  5 cases
D)  7 casesE) B) and C)
F) A) and D)

Question 15

Scenario 13-9
Ellie has been working for an engineering firm and earning an annual salary of $80,000. She decides to open her own engineering business. Her annual expenses will include $15,000 for office rent, $3,000 for equipment rental, $1,000 for supplies, $1,200 for utilities, and a $35,000 salary for a secretary/bookkeeper. Ellie will cover her start-up expenses by cashing in a $20,000 certificate of deposit on which she was earning annual interest of $500.
-Refer to Scenario 13-9. Ellie's annual economic costs will equal

Accepted Answer

A)  $55,200.
B)  $75,200.
C)  $80,500.
D)  $135,700.E) B) and D)
F) A) and B)

Question 16

If a production function shows declining marginal product of an input as the quantity of the input increases, then the production function exhibits

Accepted Answer

A)  diminishing profitability.
B)  increasing returns to scale.
C)  increasing marginal product.
D)  diminishing marginal product.E) C) and D)
F) None of the above

Question 17

Scenario 13-5
Suppose that Emily opens a restaurant. She receives a loan from a bank for $200,000. She withdraws $100,000 from her personal savings account. The interest rate on the loan is 6%, and the interest rate on her savings account is 2%.
-Refer to Scenario 13-5. Emily's annual explicit cost of capital is

Accepted Answer

A)  $2,000.
B)  $4,000.
C)  $12,000.
D)  $14,000.E) A) and B)
F) B) and D)

Question 18

Which of the following can be added to profit to obtain total revenue?

Accepted Answer

A)  net profit
B)  capital profit
C)  operational profit
D)  total costE) All of the above
F) B) and D)

Question 19

Marcus sells 300 candy bars at $0.50 each. His total costs are $125. His profits are

Accepted Answer

A)  $25.
B)  $124.50.
C)  $125.
D)  $150.E) A) and D)
F) A) and C)

Question 20

Figure 13-3 
-Refer to Figure 13-3. Which of the following statements best captures the nature of the underlying production function (not pictured) ?

Accepted Answer

A)  Output increases at a decreasing rate with additional units of input.
B)  Output increases at an increasing rate with additional units of input.
C)  Output decreases at a decreasing rate with additional units of input.
D)  Output decreases at an increasing rate with additional units of input.E) A) and B)
F) C) and D)

Exam 13: The Costs of Production

Correct Answer
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Diseconomies of scale often arise because higher production levels allow specialization among workers.

Correct Answer
verified

Table 13-16 -Refer to Table 13-16. What is the marginal cost of the 4th unit of output?

Correct Answer
verified

If a production function shows declining marginal product of an input as the quantity of the input increases, then the production function exhibits

Correct Answer
verified

Which of the following can be added to profit to obtain total revenue?

Correct Answer
verified

Riva crafts and sells hard cider as a part-time job. She can bottle and sell four cases in a week. She is considering hiring her friend Atul to help her. Together, Riva and Atul can bottle and sell seven cases per week. What is Atul's marginal product?

Correct Answer
verified

Accountants often ignore implicit costs.

Correct Answer
verified

Correct Answer
verified

Marcus sells 300 candy bars at $0.50 each. His total costs are $125. His profits are

Correct Answer
verified

If the marginal cost of producing the tenth unit of output is $2.50, and if the average total cost of producing the tenth unit of output is $3, then at ten units of output, average total cost is rising.

Correct Answer
verified

When a firm's only variable input is labor, then the slope of the production function measures the

Correct Answer
verified

Table 13-19 -Refer to Table 13-19. What is the average fixed cost of producing 430 units of output?

Correct Answer
verified
AFC = FC/Q...
View Answer

The amount of money that a firm receives from the sale of its output is called

Correct Answer
verified

-Refer to Table 13-4. Charles's math tutoring company experiences diminishing marginal productivity with the addition of the

Correct Answer
verified

Suppose that Christine owns her own CPA firm. She uses only two inputs in her business: her hours worked (labor) and a computer (capital) . In the short run, Christine most likely considers

Correct Answer
verified

The shape of the total-cost curve is inversely related to the shape of the production function.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Figure 13-3 -Refer to Figure 13-3. Which of the following statements best captures the nature of the underlying production function (not pictured) ?

Correct Answer
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Correct Answer
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Exam 13: The Costs of Production

Correct AnswerverifiedShow Answer

Diseconomies of scale often arise because higher production levels allow specialization among workers.

Correct AnswerverifiedShow Answer

​Table 13-16 -Refer to Table 13-16. What is the marginal cost of the 4th unit of output?

Correct AnswerverifiedShow Answer

If a production function shows declining marginal product of an input as the quantity of the input increases, then the production function exhibits

Correct AnswerverifiedShow Answer

Which of the following can be added to profit to obtain total revenue?

Correct AnswerverifiedShow Answer

Riva crafts and sells hard cider as a part-time job. She can bottle and sell four cases in a week. She is considering hiring her friend Atul to help her. Together, Riva and Atul can bottle and sell seven cases per week. What is Atul's marginal product?

Correct AnswerverifiedShow Answer

Accountants often ignore implicit costs.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Marcus sells 300 candy bars at $0.50 each. His total costs are $125. His profits are

Correct AnswerverifiedShow Answer

If the marginal cost of producing the tenth unit of output is $2.50, and if the average total cost of producing the tenth unit of output is $3, then at ten units of output, average total cost is rising.

Correct AnswerverifiedShow Answer

When a firm's only variable input is labor, then the slope of the production function measures the

Correct AnswerverifiedShow Answer

Table 13-19 -Refer to Table 13-19. What is the average fixed cost of producing 430 units of output?

Correct AnswerverifiedAFC = FC/Q...View AnswerShow Answer

The amount of money that a firm receives from the sale of its output is called

Correct AnswerverifiedShow Answer

-Refer to Table 13-4. Charles's math tutoring company experiences diminishing marginal productivity with the addition of the

Correct AnswerverifiedShow Answer

Suppose that Christine owns her own CPA firm. She uses only two inputs in her business: her hours worked (labor) and a computer (capital) . In the short run, Christine most likely considers

Correct AnswerverifiedShow Answer

The shape of the total-cost curve is inversely related to the shape of the production function.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 13-3 -Refer to Figure 13-3. Which of the following statements best captures the nature of the underlying production function (not pictured) ?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Table 13-16 -Refer to Table 13-16. What is the marginal cost of the 4th unit of output?

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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Correct Answer
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Correct Answer
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AFC = FC/Q...
View Answer

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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Correct Answer
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Correct Answer
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Correct Answer
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