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Exam 12: The Costs of Production

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Question 201

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Table 12-2 -Refer to Table 12-2.What is the marginal product of the first worker?

A) 250 units
B) 200 units
C) 150 units
D) 50 units

E) All of the above
F) C) and D)

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Question 202

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Which of the following statements is correct?

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) A) and D)

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Question 203

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Table 12-11 Teacher's Helper is a small company that has a subcontract to produce instructional materials for disabled children in public school districts.The owner rents several small rooms in an office building in the suburbs for $600 a month and has leased computer equipment that costs $480 a month. -Refer to Table 12-11.What is the average fixed cost for the month if 9 instructional modules are produced?

The marginal product of an input in the production process is the increase in

Table 12-12 Betty's Bakery -Refer to Table 12-12.What is the average total cost of producing 2 cakes at Betty's Bakery?

Table 12-6 Wooden Chair Factory -Refer to Table 12-6.The Wooden Chair Factory experiences diminishing marginal product of labor with the addition of which worker?

Table 12-12 Betty's Bakery -Refer to Table 12-12.What is the total cost of producing 7 cakes at Betty's Bakery?

Suppose that a worker can produce 100 units of output in 7 hours.In the 8th hour,he can produce 12 units of output.The worker can produce 112 units of output in 8 hours.

Table 12-6 Wooden Chair Factory -Refer to Table 12-6.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.Assume the number of machines does not change.If the factory produces at a rate of 78 chairs per hour,what is the total machine cost per day?

When average total cost is above marginal cost,average total cost is rising.

Table 12-13 -Refer to Table 12-13.What is average variable cost when output is 50 units?

When a factory is operating in the short run,

Table 12-11 Teacher's Helper is a small company that has a subcontract to produce instructional materials for disabled children in public school districts.The owner rents several small rooms in an office building in the suburbs for $600 a month and has leased computer equipment that costs $480 a month. -Refer to Table 12-11.How many instructional modules are produced when marginal cost is $1,300?

Daphne sells 300 glasses of lemonade at $0.50 each.Her total costs are $125.Her profits are

Suppose Jan started up a small lemonade stand business last month.Variable costs for Jan's lemonade stand now include the cost of

Scenario 12-5 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 12-5.Emily's implicit cost of capital is

In the long run,a factory is usually considered a fixed input.

Fixed costs are those costs that remain fixed no matter how long the time horizon is.

In setting the production level,a firm's cost curves

In his book,An Inquiry into the Nature and Causes of the Wealth of Nations,Adam Smith described a visit he made to a