Question 1

Increased specialization in large firms might lead to

Accepted Answer

A)   upward-sloping marginal cost curves.
B)   horizontal marginal cost curves.
C)   downward-sloping long-run average cost curves.
D)   upward-sloping long-run average cost curves.

Question 2

Recall the Application about the manufacture of fake killer whales used to scare sea lions off the Washington coast to answer the following question(s) .
-Recall the Application. If a fake killer whale to be used to scare sea lions away from steelhead and other threatened and commercially valuable species cost $11,000 for the mold and $5,000 for materials for each fake killer whale made, then the producer would face

Accepted Answer

A)   increasing returns to scale.
B)   decreasing returns to scale.
C)   increasing average total costs.
D)   decreasing demand.

Question 3

Marginal product in the short run

Accepted Answer

A)   increases at all levels of production.
B)   diminishes at all levels of production.
C)   may initially increase, then eventually decrease.
D)   may initially decrease, then eventually increase.

Question 4

In the short run, ________ factors of production are fixed, while in the long run, ________ of them are.

Accepted Answer

A)   some; none
B)   all; none
C)   no; at least some
D)   all; at least some

Question 5

If a firm has reached the minimum efficient scale, any additional output produced by the firm will result in a lower average cost in the long run.

Accepted Answer

A) True 
 B)False

Question 6

Draw a graph showing the long-run average cost curve for a firm that experiences economies of scale.

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> As shown in the graph, the lo...

Question 7

Economic cost is always less than accounting cost.

Accepted Answer

A) True 
 B)False

Question 8

Table 5.2
-Refer to Table 5.2, which gives a firm's production function. Assume that all non-labor inputs are fixed. The marginal product of the fourth worker is

Accepted Answer

A)   0 units.
B)   10 units.
C)   25 units.
D)   30 units.

Question 9

________ are costs that require a monetary payment.

Accepted Answer

A)   Implicit costs
B)   Explicit costs
C)   Accounting costs
D)   Both B and C are correct.

Question 10

Implicit cost is the opportunity cost of the inputs that do not require monetary payment.

Accepted Answer

A) True 
 B)False

Question 11

Figure 5.1
-Refer to Figure 5.1, which shows a family of average cost curves. The average variable cost at a given level of output is represented by

Accepted Answer

A)   the vertical distance between Curve 1 and Curve 3 at a given level of output.
B)   the vertical distance between Curve 1 and Curve 2 at a given level of output.
C)   the vertical sum of Curve 1 and Curve 3 at a given level of output.
D)   the vertical sum of Curve 1 and Curve 2 at a given level of output.

Question 12

Average total costs are minimized when

Accepted Answer

A)   marginal costs begin to increase.
B)   marginal costs begin to decrease.
C)   marginal cost is greater than average total cost.
D)   marginal cost equals average total cost.

Question 13

Table 5.5
-Refer to Table 5.5. The marginal cost of the third unit of output is

Accepted Answer

A)   $0.
B)   $7.
C)   $8.
D)   $40.

Question 14

Diminishing marginal returns imply that marginal cost is rising.

Accepted Answer

A) True 
 B)False

Question 15

In the short run, the marginal cost of the first unit of output is $20, the average variable cost of producing three units of output is $16, and the marginal cost of producing the second unit of output is $16. What is the marginal cost of producing the third unit of output?

Accepted Answer

A)   $12
B)   $16
C)   $20
D)   $48

Question 16

Table 5.5
-Refer to Table 5.5. The total fixed cost of producing two units is

Accepted Answer

A)   $0.
B)   $8.
C)   $11.
D)   $15.

Question 17

Table 5.1
-Refer to Table 5.1, which gives a firm's production function. Assume that all non-labor inputs are fixed. Diminishing marginal returns set in with the addition of the

Accepted Answer

A)   third worker.
B)   fourth worker.
C)   fifth worker.
D)   sixth worker.

Question 18

Recall the Application about the marginal cost involved in producing crude oil to answer the following question(s) .
-Recall the Application. Which country has the highest marginal cost of extracting oil?

Accepted Answer

A)   Saudi Arabia
B)   Russia
C)   United Arab Emirates
D)   Canada

Question 19

Average fixed cost is defined as

Accepted Answer

A)   total variable cost divided by quantity.
B)   quantity divided by total variable cost.
C)   the change in total variable cost divided by the change in quantity.
D)   total fixed cost divided by quantity.

Question 20

Average variable costs are minimized when

Accepted Answer

A)   marginal costs begin to increase.
B)   marginal costs begin to decrease.
C)   marginal cost is greater than average total cost.
D)   marginal cost equals average variable cost.

Exam 5: Production Technology and Cost

Implicit cost is the opportunity cost of the inputs that do not require monetary payment.

Correct Answer
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Recall the Application about the marginal cost involved in producing crude oil to answer the following question(s) . -Recall the Application. Which country has the highest marginal cost of extracting oil?

Correct Answer
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Table 5.2 -Refer to Table 5.2, which gives a firm's production function. Assume that all non-labor inputs are fixed. The marginal product of the fourth worker is

Correct Answer
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Average variable costs are minimized when

Correct Answer
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In the short run, factors of production are fixed, while in the long run, of them are.

Correct Answer
verified

Diminishing marginal returns imply that marginal cost is rising.

Correct Answer
verified

Correct Answer
verified

If a firm has reached the minimum efficient scale, any additional output produced by the firm will result in a lower average cost in the long run.

Correct Answer
verified

Draw a graph showing the long-run average cost curve for a firm that experiences economies of scale.

Correct Answer
verified
As shown in the graph, the lo...
View Answer

Increased specialization in large firms might lead to

Correct Answer
verified

Table 5.1 -Refer to Table 5.1, which gives a firm's production function. Assume that all non-labor inputs are fixed. Diminishing marginal returns set in with the addition of the

Correct Answer
verified

Marginal product in the short run

Correct Answer
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In the short run, the marginal cost of the first unit of output is $20, the average variable cost of producing three units of output is $16, and the marginal cost of producing the second unit of output is $16. What is the marginal cost of producing the third unit of output?

Correct Answer
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Table 5.5 -Refer to Table 5.5. The marginal cost of the third unit of output is

Correct Answer
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________ are costs that require a monetary payment.

Correct Answer
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Economic cost is always less than accounting cost.

Correct Answer
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Figure 5.1 -Refer to Figure 5.1, which shows a family of average cost curves. The average variable cost at a given level of output is represented by

Correct Answer
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Average total costs are minimized when

Correct Answer
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Average fixed cost is defined as

Correct Answer
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Table 5.5 -Refer to Table 5.5. The total fixed cost of producing two units is

Correct Answer
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Exam 5: Production Technology and Cost

Implicit cost is the opportunity cost of the inputs that do not require monetary payment.

Correct AnswerverifiedShow Answer

Recall the Application about the marginal cost involved in producing crude oil to answer the following question(s) . -Recall the Application. Which country has the highest marginal cost of extracting oil?

Correct AnswerverifiedShow Answer

Table 5.2 -Refer to Table 5.2, which gives a firm's production function. Assume that all non-labor inputs are fixed. The marginal product of the fourth worker is

Correct AnswerverifiedShow Answer

Average variable costs are minimized when

Correct AnswerverifiedShow Answer

In the short run, ________ factors of production are fixed, while in the long run, ________ of them are.

Correct AnswerverifiedShow Answer

Diminishing marginal returns imply that marginal cost is rising.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If a firm has reached the minimum efficient scale, any additional output produced by the firm will result in a lower average cost in the long run.

Correct AnswerverifiedShow Answer

Draw a graph showing the long-run average cost curve for a firm that experiences economies of scale.

Correct Answerverified As shown in the graph, the lo...View AnswerShow Answer

Increased specialization in large firms might lead to

Correct AnswerverifiedShow Answer

Table 5.1 -Refer to Table 5.1, which gives a firm's production function. Assume that all non-labor inputs are fixed. Diminishing marginal returns set in with the addition of the

Correct AnswerverifiedShow Answer

Marginal product in the short run

Correct AnswerverifiedShow Answer

In the short run, the marginal cost of the first unit of output is $20, the average variable cost of producing three units of output is $16, and the marginal cost of producing the second unit of output is $16. What is the marginal cost of producing the third unit of output?

Correct AnswerverifiedShow Answer

Table 5.5 -Refer to Table 5.5. The marginal cost of the third unit of output is

Correct AnswerverifiedShow Answer

________ are costs that require a monetary payment.

Correct AnswerverifiedShow Answer

Economic cost is always less than accounting cost.

Correct AnswerverifiedShow Answer

Figure 5.1 -Refer to Figure 5.1, which shows a family of average cost curves. The average variable cost at a given level of output is represented by

Correct AnswerverifiedShow Answer

Average total costs are minimized when

Correct AnswerverifiedShow Answer

Average fixed cost is defined as

Correct AnswerverifiedShow Answer

Table 5.5 -Refer to Table 5.5. The total fixed cost of producing two units is

Correct AnswerverifiedShow Answer

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In the short run, factors of production are fixed, while in the long run, of them are.

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As shown in the graph, the lo...
View Answer

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