Question 1

Which of the following statements is false?

Accepted Answer

A)  An implicit cost is a nonmonetary opportunity cost.
B)  Economic costs include both accounting costs and implicit costs.
C)  An explicit cost is a cost that involves spending money.
D)  Economists consider all costs to be implicit costs.E) A) and B)
F) A) and C)

Question 2

Higher isocost lines correspond to higher

Accepted Answer

A)  profits.
B)  total costs of production.
C)  input prices.
D)  sales revenue.E) All of the above
F) C) and D)

Question 3

The slope of a typical isoquant is negative because to produce a given output,a producer

Accepted Answer

A)  will use more of one input only if it uses more of another.
B)  can use less of one input only if the productivity of that input increases
C)  can use less of one input only if it uses more of another.
D)  will use more of one input only if the price of that input falls.E) A) and D)
F) All of the above

Question 4

Marginal cost is equal to the

Accepted Answer

A)  change in total cost divided by the change in output.
B)  change in average total costs divided by the change in output.
C)  change in total product divided by the change in output.
D)  change in average product divided by the change in output.E) A) and B)
F) B) and C)

Question 5

Which of the following is a factor of production that generally is fixed in the short run?

Accepted Answer

A)  raw materials
B)  labor
C)  a factory building
D)  waterE) None of the above
F) All of the above

Question 6

If 11 workers can produce a total of 54 units of a product and a 12th worker has a marginal product of 6 units,then the average product of 12 workers is

Accepted Answer

A)  60 units.
B)  54 units.
C)  48 units.
D)  5 units.E) A) and D)
F) None of the above

Question 7

If fixed costs do not change,then marginal cost

Accepted Answer

A)  also remains constant.
B)  equals the change in variable cost divided by the change in output.
C)  equals the change in average variable cost divided by the change in output.
D)  equals the change in average fixed cost divided by the change in output.E) All of the above
F) A) and B)

Question 8

Damian owns a tattoo parlor and has hired three tattoo artists to work for him.The marginal product of labor is 8 for the first artist,12 for the second artist,and 7 for the third artist.What is Damian's average product of labor for these three tattoo artists?

Accepted Answer

The average product of labor i...

Question 9

The total output produced by a firm divided by the quantity of workers employed by the firm is the definition of

Accepted Answer

A)  the marginal product of labor.
B)  the division of labor.
C)  the average product of labor.
D)  the average cost of production.E) None of the above
F) C) and D)

Question 10

Which of the following statements is true?

Accepted Answer

A)  The average product of labor is at its maximum when the average product of labor equals the marginal product of labor.
B)  The average product of labor is at its minimum when the average product of labor equals the marginal product of labor.
C)  The average product of labor tells us how much output changes as the quantity of workers hired changes.
D)  Whenever the marginal product of labor is greater than the average product of labor the average product of labor must be decreasing.E) B) and C)
F) A) and D)

Question 11

Explain whether each of the following is a fixed cost or a variable cost for Damian Dandridge's tattoo parlor.
a.The payment he makes to buy tattoo ink.
b.The wages he pays his employees.
c.The $500-per-month payment he makes to advertise his shop on highway billboards.
d.The lease payment he makes to the landlord who owns the building where his shop is located.
e.The payment he makes on his liability insurance policy.

Accepted Answer

c,d,and e are fixed costs because they d...

Question 12

If average total cost is falling marginal cost must also be falling.

Accepted Answer

A) True 
 B)False

Question 13

-Refer to Figure 11-12.Which of the following statements about the input combinations shown in the diagram is false?

Accepted Answer

A)  The firm produces a higher output level when it uses input combination b compared to input combination a.
B)  The firm produces a lower output level when it uses input combination d compared to input combination a.
C)  The firm produces the same output level when it uses input combination a or c.
D)  The firm incurs the same total cost when it uses input combination a or c to produce a given quantity of output.E) All of the above
F) A) and B)

Question 14

The slope of an isocost line ________ and equals the negative of ________.

Accepted Answer

A)  increases as we move down the line;the ratio of input prices
B)  decreases as we move down the line;the ratio of the marginal products
C)  is constant;the ratio of input prices
D)  is constant;the ratio of the marginal productsE) C) and D)
F) B) and D)

Question 15

If the long-run average total cost curve is downward-sloping,then the firm is experiencing decreasing returns to scale.

Accepted Answer

A) True 
 B)False

Question 16

Figure 11-13 
-Refer to Figure 11-13.The lines shown in the diagram are isocost lines.Which of the following shows an increase in the price of labor while the price of capital remains unchanged?

Accepted Answer

A)  the movement from AF to BD
B)  the movement from AF to CE
C)  the movement from BF to BD
D)  the movement from BF to CEE) A) and B)
F) C) and D)

Question 17

A firm's expansion path

Accepted Answer

A)  is the same thing as its long-run average cost curve.
B)  is a curve that shows a firm's cost-minimizing combination of inputs for every level of output,holding input prices constant.
C)  shows the targeted growth rate in sales over the long run.
D)  is a curve that shows expected profits at various price levels.E) All of the above
F) A) and D)

Question 18

What is the difference between explicit costs and implicit costs? List three examples each of explicit costs and implicit costs that may be experienced by a small business.

Accepted Answer

Explicit costs are costs that involve sp...

Question 19

Figure 11-6 contains information about the short run cost structure of a firm.
-Refer to Figure 11-6.In the figure above which letter represents the average total cost curve?

Accepted Answer

A)  A
B)  B
C)  C
D)  DE) A) and B)
F) A) and C)

Question 20

Average total cost is equal to average variable cost minus average fixed cost.

Accepted Answer

A) True 
 B)False

Exam 11: Technology,production,and Costs

If average total cost is falling marginal cost must also be falling.

Correct Answer
verified

Figure 11-13 -Refer to Figure 11-13.The lines shown in the diagram are isocost lines.Which of the following shows an increase in the price of labor while the price of capital remains unchanged?

Correct Answer
verified

If fixed costs do not change,then marginal cost

Correct Answer
verified

Average total cost is equal to average variable cost minus average fixed cost.

Correct Answer
verified

Marginal cost is equal to the

Correct Answer
verified

The slope of a typical isoquant is negative because to produce a given output,a producer

Correct Answer
verified

If 11 workers can produce a total of 54 units of a product and a 12th worker has a marginal product of 6 units,then the average product of 12 workers is

Correct Answer
verified

-Refer to Figure 11-12.Which of the following statements about the input combinations shown in the diagram is false?

Correct Answer
verified

Figure 11-6 contains information about the short run cost structure of a firm. -Refer to Figure 11-6.In the figure above which letter represents the average total cost curve?

Correct Answer
verified

Which of the following is a factor of production that generally is fixed in the short run?

Correct Answer
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Which of the following statements is false?

Correct Answer
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The total output produced by a firm divided by the quantity of workers employed by the firm is the definition of

Correct Answer
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A firm's expansion path

Correct Answer
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What is the difference between explicit costs and implicit costs? List three examples each of explicit costs and implicit costs that may be experienced by a small business.

Correct Answer
verified
Explicit costs are costs that involve sp...
View Answer

The slope of an isocost line and equals the negative of .

Correct Answer
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Correct Answer
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c,d,and e are fixed costs because they d...
View Answer

Damian owns a tattoo parlor and has hired three tattoo artists to work for him.The marginal product of labor is 8 for the first artist,12 for the second artist,and 7 for the third artist.What is Damian's average product of labor for these three tattoo artists?

Correct Answer
verified
The average product of labor i...
View Answer

If the long-run average total cost curve is downward-sloping,then the firm is experiencing decreasing returns to scale.

Correct Answer
verified

Which of the following statements is true?

Correct Answer
verified

Higher isocost lines correspond to higher

Correct Answer
verified

Exam 11: Technology,production,and Costs

If average total cost is falling marginal cost must also be falling.

Correct AnswerverifiedShow Answer

Figure 11-13 -Refer to Figure 11-13.The lines shown in the diagram are isocost lines.Which of the following shows an increase in the price of labor while the price of capital remains unchanged?

Correct AnswerverifiedShow Answer

If fixed costs do not change,then marginal cost

Correct AnswerverifiedShow Answer

Average total cost is equal to average variable cost minus average fixed cost.

Correct AnswerverifiedShow Answer

Marginal cost is equal to the

Correct AnswerverifiedShow Answer

The slope of a typical isoquant is negative because to produce a given output,a producer

Correct AnswerverifiedShow Answer

If 11 workers can produce a total of 54 units of a product and a 12th worker has a marginal product of 6 units,then the average product of 12 workers is

Correct AnswerverifiedShow Answer

-Refer to Figure 11-12.Which of the following statements about the input combinations shown in the diagram is false?

Correct AnswerverifiedShow Answer

Figure 11-6 contains information about the short run cost structure of a firm. -Refer to Figure 11-6.In the figure above which letter represents the average total cost curve?

Correct AnswerverifiedShow Answer

Which of the following is a factor of production that generally is fixed in the short run?

Correct AnswerverifiedShow Answer

Which of the following statements is false?

Correct AnswerverifiedShow Answer

The total output produced by a firm divided by the quantity of workers employed by the firm is the definition of

Correct AnswerverifiedShow Answer

A firm's expansion path

Correct AnswerverifiedShow Answer

What is the difference between explicit costs and implicit costs? List three examples each of explicit costs and implicit costs that may be experienced by a small business.

Correct AnswerverifiedExplicit costs are costs that involve sp...View AnswerShow Answer

The slope of an isocost line ________ and equals the negative of ________.

Correct AnswerverifiedShow Answer

Correct Answerverifiedc,d,and e are fixed costs because they d...View AnswerShow Answer

Damian owns a tattoo parlor and has hired three tattoo artists to work for him.The marginal product of labor is 8 for the first artist,12 for the second artist,and 7 for the third artist.What is Damian's average product of labor for these three tattoo artists?

Correct AnswerverifiedThe average product of labor i...View AnswerShow Answer

If the long-run average total cost curve is downward-sloping,then the firm is experiencing decreasing returns to scale.

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

Higher isocost lines correspond to higher

Correct AnswerverifiedShow 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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Explicit costs are costs that involve sp...
View Answer

The slope of an isocost line and equals the negative of .

Correct Answer
verified

Correct Answer
verified
c,d,and e are fixed costs because they d...
View Answer

Correct Answer
verified
The average product of labor i...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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