Question 1

Diminishing returns set in with the _____ worker.

Accepted Answer

The answer of Diminishing returns set in with the _____...

Question 2

The basic characteristic of the short run is that

Accepted Answer

A)  a firm does not have sufficient time to change the amounts of any of the resources it employs.
B)  the firm does not have sufficient time to cut its rate of output to zero.
C)  the firm does not have sufficient time to change the size of its plant.
D)  the time frame is sufficient to allow new firms to enter the industry.E) B) and D)
F) A) and B)

Question 3

The shutdown decision is made in the _______________.

Accepted Answer

The answer of The shutdown decision is made in the...

Question 4

Jimmy,Walter,Mike,and Bill run a school for political candidates.The school has fixed costs of $10 million,variable costs of $4 million,and total revenue of $15 million.In the short run the school will _____ and in the long run the school will ___.

Accepted Answer

A)  operate;stay in business
B)  operate;go out of business
C)  shut down;stay in business
D)  shut down;go out of businessE) A) and B)
F) B) and D)

Question 5

If a firm is operating at an output that is a little less than the minimum point of its ATC curve,the marginal cost is

Accepted Answer

A)  greater than ATC and rising.
B)  greater than ATC and falling.
C)  less than ATC and rising.
D)  less than ATC and falling.E) B) and D)
F) A) and C)

Question 6

Draw a graph of AVC,ATC,and MC.

Accepted Answer

The answer of Draw a graph of AVC,ATC,and MC....

Question 7

The average fixed cost curve

Accepted Answer

A)  is a vertical line.
B)  is a horizontal line.
C)  slopes downward to the right as output rises.
D)  is U-shaped (it declines as output rises,reaches a minimum,and then rises) .E) All of the above
F) C) and D)

Question 8

We know that diminishing returns has set in when ______ declines.

Accepted Answer

The answer of We know that diminishing returns has set...

Question 9

If you had fixed costs of $100,000 and variable costs of $10,000,in the long run you would stay in business if total revenue were equal to,or greater than

Accepted Answer

A)  $0.
B)  $10,000.
C)  $100,000.
D)  $110,000.E) All of the above
F) A) and C)

Question 10

Fixed cost is sometimes referred to as

Accepted Answer

A)  sunk cost.
B)  variable cost.
C)  total cost.
D)  economic cost.
E)  accounting cost.F) A) and E)
G) B) and D)

Question 11

If the marginal cost curve is below the average total cost curve,average total cost must be ___.

Accepted Answer

The answer of If the marginal cost curve is below...

Question 12

If a firm that is losing money shuts down and has variable costs of $10 million and continues to operate,we may conclude that its total revenue is _________.

Accepted Answer

mo re than...

Question 13

Specialization and quantity discounts are examples of ________________.

Accepted Answer

The answer of Specialization and quantity discounts are examples of...

Question 14

Total costs divided by output equals _____.

Accepted Answer

ATC (avera...

Question 15

As output rises,AFC gets _______________.

Accepted Answer

The answer of As output rises,AFC gets _______________....

Question 16

The law of diminishing returns

Accepted Answer

A)  applies only to agriculture.
B)  is another way of stating Parkinson's Law.
C)  focuses on marginal output.
D)  explains why mass production leads to lower costs.E) A) and B)
F) All of the above

Question 17

State the minimum points (in dollars and cents)of (a)the AVC and (b)the ATC.

Accepted Answer

(a)$165.50 (must be ...

Question 18

Each of the following is a variable cost except

Accepted Answer

A)  raw material costs.
B)  hourly wages.
C)  rent.
D)  advertising costs.E) B) and C)
F) A) and D)

Question 19

Draw a graph of AVC,ATC,and MC.

Accepted Answer

The answer of Draw a graph of AVC,ATC,and MC....

Question 20

-If you wanted to produce an output of 1,000 in the long run,you would choose a plant whose size was represented by

Accepted Answer

A)  ATC1.
B)  ATC2.
C)  ATC3.
D)  ATC4.
E)  ATC5.F) A) and B)
G) All of the above

Exam 20: Cost

If a firm that is losing money shuts down and has variable costs of $10 million and continues to operate,we may conclude that its total revenue is _________.

Correct Answerverifiedmo re than...View AnswerShow Answer

The shutdown decision is made in the _______________.

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The average fixed cost curve

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If a firm is operating at an output that is a little less than the minimum point of its ATC curve,the marginal cost is

Correct AnswerverifiedShow Answer

Diminishing returns set in with the _____ worker.

Correct AnswerverifiedShow Answer

Specialization and quantity discounts are examples of ________________.

Correct AnswerverifiedShow Answer

Fixed cost is sometimes referred to as

Correct AnswerverifiedShow Answer

State the minimum points (in dollars and cents)of (a)the AVC and (b)the ATC.

Correct Answerverified(a)$165.50 (must be ...View AnswerShow Answer

If the marginal cost curve is below the average total cost curve,average total cost must be ___.

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As output rises,AFC gets _______________.

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We know that diminishing returns has set in when ______ declines.

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The law of diminishing returns

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Each of the following is a variable cost except

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If you had fixed costs of $100,000 and variable costs of $10,000,in the long run you would stay in business if total revenue were equal to,or greater than

Correct AnswerverifiedShow Answer

Draw a graph of AVC,ATC,and MC.

Correct AnswerverifiedShow Answer

The basic characteristic of the short run is that

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Total costs divided by output equals _____.

Correct AnswerverifiedATC (avera...View AnswerShow Answer

-If you wanted to produce an output of 1,000 in the long run,you would choose a plant whose size was represented by

Correct AnswerverifiedShow Answer

Draw a graph of AVC,ATC,and MC.

Correct AnswerverifiedShow Answer

Jimmy,Walter,Mike,and Bill run a school for political candidates.The school has fixed costs of $10 million,variable costs of $4 million,and total revenue of $15 million.In the short run the school will _____ and in the long run the school will ___.

Correct AnswerverifiedShow Answer

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(a)$165.50 (must be ...
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ATC (avera...
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Jimmy,Walter,Mike,and Bill run a school for political candidates.The school has fixed costs of $10 million,variable costs of $4 million,and total revenue of $15 million.In the short run the school will ___ and in the long run the school will _.

Correct Answer
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