Question 1

-Anna owns a dog grooming salon in Brunswick,Georgia.The above table has Anna's total product schedule.Anna pays each worker $300 per week and she pays rent of $600 a week for her salon.These are her only costs.When Anna has a staff of 6 workers,her average fixed cost equals

Accepted Answer

A)  $600.
B)  $2.50.
C)  $7.50.
D)  $10.00.
E)  $6.00.F) A) and C)
G) A) and E)

Question 2

Which of the following is an implicit cost?
I.wages paid to workers
Ii.the normal profit
Iii.the electric bill

Accepted Answer

A)  i only
B)  ii only
C)  i and ii
D)  ii and iii
E)  Neither i,ii,nor iiiF) B) and E)
G) All of the above

Question 3

Which average cost curves are U-shaped?

Accepted Answer

Both the average total cost an...

Question 4

If 6 workers can wash 42 cars a day and 7 workers can wash 50 cars a day,then the marginal product of the 7th worker equals

Accepted Answer

A)  7.1 cars a day.
B)  7 cars a day.
C)  42 cars a day.
D)  50 cars a day.
E)  8 cars a day.F) B) and E)
G) All of the above

Question 5

One of the major reasons for the U-shaped average total cost curve is the fact that

Accepted Answer

A)  there are increasing returns from labor regardless of the number of workers employed.
B)  there eventually are decreasing returns from labor as more workers are employed.
C)  prices fall as output increases.
D)  the average fixed cost increases as more output is produced.
E)  the variable cost decreases as more output is produced.F) B) and D)
G) C) and D)

Question 6

Consider a Wal-Mart supercenter and a 7-Eleven store.In the long run,

Accepted Answer

A)  Wal-Mart or 7-Eleven may have economies of scale depending on how many customers are served.
B)  Wal-Mart will definitely have lower average costs because supercenters serve many more customers.
C)  The 7-Eleven store will definitely have lower average costs because their small stores are cheaper to build.
D)  Wal-Mart's average total cost will decline faster than the 7-Eleven store and experience diseconomies of scale.
E)  The 7-Eleven store's average total cost will be lower than Wal-Mart's and always experience economies of scale.F) C) and D)
G) A) and B)

Question 7

The law of decreasing returns applies to

Accepted Answer

A)  the long-run average cost curve.
B)  average total cost.
C)  diseconomies of scale.
D)  changes in a variable input with a given quantity of fixed inputs.
E)  changes in a fixed input with a given quantity of variable inputs.F) None of the above
G) B) and E)

Question 8

Which of the following are correct statements about implicit and explicit costs?
I.Normal profit is an implicit cost.
Ii.Economic depreciation is an explicit cost.
Iii.Wages are an explicit cost.

Accepted Answer

A)  ii and iii
B)  i and iii
C)  iii only
D)  i,ii,and iii
E)  i onlyF) B) and C)
G) A) and B)

Question 9

A firm's utility bill is a variable cost.If the cost of utilities increases,then in the figure above ________ upward.

Accepted Answer

A)  only curve A shifts
B)  only curve B shifts
C)  only curve C shifts
D)  both curves A and C shift
E)  both curves B and C shiftF) B) and C)
G) A) and B)

Question 10

-The Jerry-Berry Ice Cream Shoppe's total cost schedule is in the above table.Based on the table,which of the following is correct?

Accepted Answer

A)  The total fixed cost is $1.
B)  The average fixed cost of 1 gallon is $1.00.
C)  The average variable cost of 2 gallons of ice cream is $1.00 per gallon.
D)  Only answers A and B are correct.
E)  Answers A,B,and C are correct.F) A) and E)
G) B) and C)

Question 11

Jeremiah runs a bullfrog farm in Frogville,Oklahoma.Jeremiah notices that each additional worker he employs adds more to the total output than does the previous worker.Jeremiah must be

Accepted Answer

A)  experiencing increasing marginal returns to labor.
B)  producing at a point where the average product of labor decreases as more workers are employed.
C)  producing at a point below his total product curve.
D)  mistaken because the law of decreasing returns points out that it cannot be the case that the marginal product increases as more workers are employed.
E)  producing at a point where the average product of labor exceeds the marginal product of labor.F) B) and C)
G) C) and D)

Question 12

The short run is a time period during which

Accepted Answer

A)  some of the firm's resources are fixed.
B)  all of the firm's resources are fixed.
C)  all of the firm's resources are variable.
D)  the fixed cost equals zero.
E)  the firm cannot increase its output.F) A) and B)
G) C) and D)

Question 13

The average product is the greatest in the short run when the

Accepted Answer

A)  total product is maximized.
B)  marginal product is equal to zero.
C)  marginal product is maximized.
D)  marginal product is equal to the average product.
E)  marginal product is greater than the average product.F) B) and D)
G) B) and C)

Question 14

The figure above shows some of a firm's cost curves.
-Based on the figure above,curve B is the firm's

Accepted Answer

A)  marginal cost curve.
B)  total cost curve.
C)  average total cost curve.
D)  average variable cost curve.
E)  average fixed cost curve.F) D) and E)
G) B) and C)

Question 15

-The table above shows the total product schedule for Rick's Lawn Service,a yard care company.The total product schedule shows

Accepted Answer

A)  increasing marginal returns when the 6th worker is hired.
B)  decreasing marginal returns when the 1st worker is hired.
C)  first increasing and then decreasing marginal returns.
D)  output first increases then increases.
E)  only decreasing marginal returns.F) All of the above
G) D) and E)

Question 16

Downsizing is the practice of laying off workers in an attempt to decrease average total cost.Can laying off workers decrease average total cost? Is it possible for the firm to downsize and have its average total cost increase? Explain your answer.

Accepted Answer

Yes,downsizing by laying off workers can...

Question 17

The main source of economies of scale is

Accepted Answer

A)  reductions in the price of factors of production.
B)  greater specialization of both labor and capital.
C)  increasing average costs.
D)  decreasing marginal product.
E)  the ability to hire less labor.F) A) and D)
G) B) and E)

Question 18

In the long run,constant returns to scale necessarily occur when the firm increases its production and the firm's

Accepted Answer

A)  total cost increases.
B)  total cost does not change.
C)  average total cost increases .
D)  average total cost does not change.
E)  production increases by more than does the firm's total cost.F) C) and D)
G) B) and E)

Question 19

Acme produces rocket shoes for use by slow coyotes.Acme's total cost schedule is given in the table below.Acme's total fixed cost is $12.Complete the table.(In the table,TFC is the total fixed cost,TVC is the total variable cost,AFC is the average fixed cost,AVC is the average variable cost,and ATC is the average total cost. )

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> The compl...

Question 20

When the Rent-A-Limo Company negotiates its new labor contract it finds that the wages it must pay drivers have increased.How does this wage hike affect the Rent-A-Limo Company's average fixed cost,average variable cost,average total cost,and marginal cost?

Accepted Answer

The drivers' wages are a variable cost b...

Exam 10: Production and Cost

-Anna owns a dog grooming salon in Brunswick,Georgia.The above table has Anna's total product schedule.Anna pays each worker $300 per week and she pays rent of $600 a week for her salon.These are her only costs.When Anna has a staff of 6 workers,her average fixed cost equals

Correct Answer
verified

Consider a Wal-Mart supercenter and a 7-Eleven store.In the long run,

Correct Answer
verified

Correct Answer
verified
The compl...
View Answer

The law of decreasing returns applies to

Correct Answer
verified

Which of the following is an implicit cost? I.wages paid to workers Ii.the normal profit Iii.the electric bill

Correct Answer
verified

-The table above shows the total product schedule for Rick's Lawn Service,a yard care company.The total product schedule shows

Correct Answer
verified

Downsizing is the practice of laying off workers in an attempt to decrease average total cost.Can laying off workers decrease average total cost? Is it possible for the firm to downsize and have its average total cost increase? Explain your answer.

Correct Answer
verified
Yes,downsizing by laying off workers can...
View Answer

The average product is the greatest in the short run when the

Correct Answer
verified

A firm's utility bill is a variable cost.If the cost of utilities increases,then in the figure above ________ upward.

Correct Answer
verified

One of the major reasons for the U-shaped average total cost curve is the fact that

Correct Answer
verified

The short run is a time period during which

Correct Answer
verified

If 6 workers can wash 42 cars a day and 7 workers can wash 50 cars a day,then the marginal product of the 7th worker equals

Correct Answer
verified

The figure above shows some of a firm's cost curves. -Based on the figure above,curve B is the firm's

Correct Answer
verified

In the long run,constant returns to scale necessarily occur when the firm increases its production and the firm's

Correct Answer
verified

Which of the following are correct statements about implicit and explicit costs? I.Normal profit is an implicit cost. Ii.Economic depreciation is an explicit cost. Iii.Wages are an explicit cost.

Correct Answer
verified

-The Jerry-Berry Ice Cream Shoppe's total cost schedule is in the above table.Based on the table,which of the following is correct?

Correct Answer
verified

Which average cost curves are U-shaped?

Correct Answer
verified
Both the average total cost an...
View Answer

The main source of economies of scale is

Correct Answer
verified

Jeremiah runs a bullfrog farm in Frogville,Oklahoma.Jeremiah notices that each additional worker he employs adds more to the total output than does the previous worker.Jeremiah must be

Correct Answer
verified

When the Rent-A-Limo Company negotiates its new labor contract it finds that the wages it must pay drivers have increased.How does this wage hike affect the Rent-A-Limo Company's average fixed cost,average variable cost,average total cost,and marginal cost?

Correct Answer
verified
The drivers' wages are a variable cost b...
View Answer

Exam 10: Production and Cost

-Anna owns a dog grooming salon in Brunswick,Georgia.The above table has Anna's total product schedule.Anna pays each worker $300 per week and she pays rent of $600 a week for her salon.These are her only costs.When Anna has a staff of 6 workers,her average fixed cost equals

Correct AnswerverifiedShow Answer

Consider a Wal-Mart supercenter and a 7-Eleven store.In the long run,

Correct AnswerverifiedShow Answer

Correct Answerverified The compl...View AnswerShow Answer

The law of decreasing returns applies to

Correct AnswerverifiedShow Answer

Which of the following is an implicit cost? I.wages paid to workers Ii.the normal profit Iii.the electric bill

Correct AnswerverifiedShow Answer

-The table above shows the total product schedule for Rick's Lawn Service,a yard care company.The total product schedule shows

Correct AnswerverifiedShow Answer

Downsizing is the practice of laying off workers in an attempt to decrease average total cost.Can laying off workers decrease average total cost? Is it possible for the firm to downsize and have its average total cost increase? Explain your answer.

Correct AnswerverifiedYes,downsizing by laying off workers can...View AnswerShow Answer

The average product is the greatest in the short run when the

Correct AnswerverifiedShow Answer

A firm's utility bill is a variable cost.If the cost of utilities increases,then in the figure above ________ upward.

Correct AnswerverifiedShow Answer

One of the major reasons for the U-shaped average total cost curve is the fact that

Correct AnswerverifiedShow Answer

The short run is a time period during which

Correct AnswerverifiedShow Answer

If 6 workers can wash 42 cars a day and 7 workers can wash 50 cars a day,then the marginal product of the 7th worker equals

Correct AnswerverifiedShow Answer

The figure above shows some of a firm's cost curves. -Based on the figure above,curve B is the firm's

Correct AnswerverifiedShow Answer

In the long run,constant returns to scale necessarily occur when the firm increases its production and the firm's

Correct AnswerverifiedShow Answer

Which of the following are correct statements about implicit and explicit costs? I.Normal profit is an implicit cost. Ii.Economic depreciation is an explicit cost. Iii.Wages are an explicit cost.

Correct AnswerverifiedShow Answer

-The Jerry-Berry Ice Cream Shoppe's total cost schedule is in the above table.Based on the table,which of the following is correct?

Correct AnswerverifiedShow Answer

Which average cost curves are U-shaped?

Correct AnswerverifiedBoth the average total cost an...View AnswerShow Answer

The main source of economies of scale is

Correct AnswerverifiedShow Answer

Jeremiah runs a bullfrog farm in Frogville,Oklahoma.Jeremiah notices that each additional worker he employs adds more to the total output than does the previous worker.Jeremiah must be

Correct AnswerverifiedShow Answer

When the Rent-A-Limo Company negotiates its new labor contract it finds that the wages it must pay drivers have increased.How does this wage hike affect the Rent-A-Limo Company's average fixed cost,average variable cost,average total cost,and marginal cost?

Correct AnswerverifiedThe drivers' wages are a variable cost b...View AnswerShow Answer

Correct Answer
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Correct Answer
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Correct Answer
verified
The compl...
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Correct Answer
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Correct Answer
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Correct Answer
verified
Yes,downsizing by laying off workers can...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
Both the average total cost an...
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The drivers' wages are a variable cost b...
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