Chapter 5 - Production Costs

Chapter 5 - Production Costs - Page 1 of 24 Practice Test...

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Unformatted text preview: Page 1 of 24 Practice Test Microeconomics: Theory and Policy Chapter 05: Production Costs B. Modjtahedi UCD Students: Ignore the questions about average costs (yellow highlights) Question 1 The minimum a producer would accept for a unit of a product equals: A. The marginal cost of acquiring it. B. The explicit cost of producing it. C. The implicit cost of producing it. D. All of the above. E. None of the above. Question 2 When the decision is to produce and sell something, the marginal cost is: A. The money the producer receives from the buyer. B. The maximum the producer is willing to receive from the buyer. C. The minimum the producer is willing to receive from the buyer. D. The maximum the producer actually receives from the buyer. E. None of the above. Question 3 A laptop producer is willing to receive no less than $500 for the next unit sold. This is because: A. The marginal benefit of producing that laptop is $500. B. The marginal cost of producing that laptop is $500. C. The marginal cost of producing that laptop is higher than $500. D. The marginal cost of producing that laptop is lower than $500. E. None of the above. Question 4 Economists assume that the objective of a typical firm is to: A. Maximize revenue. B. Minimize total cost. C. Minimize marginal cost. D. Maximize profit. E. None of the above. Question 5 Total profit earned by a firm over a certain period of time is generally defined as: A. Total revenue minus total cost. B. Total cost minus total revenue. C. Price minus marginal cost. D. Price minus average cost. E. None of the above. Question 6 What is the marginal benefit to a firm of producing and selling the next unit of output? A. The maximum revenue the firm is willing to receive for that unit. Page 2 of 24 B. The revenue the firm actually receives for that unit. C. The minimum revenue the firm is willing to receive for that unit. D. The cost of producing that unit. E. None of the above. Question 7 The revenue received by a firm for producing and selling the next unit of output is called: A. Average revenue. B. Marginal revenue. C. Marginal profit. D. Marginal cost. E. None of the above. Question 8 A firm would maximize profits by producing and selling output up to the point where: A. MR > MC. B. MR < MC C. MR = MC D. TR = TC E. None of the above. Question 9 What is the correct and the most general definition of the wage rate? A. Total wage received by all the workers of a firm in a day. B. Total wage received by one worker over a week. C. Total wage received by one worker over an hour. D. Total wage received by one worker over a certain period of time. E. None of the above. Question 10 What is the correct and the most general definition of the user-cost of capital?...
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This note was uploaded on 11/08/2010 for the course ECN ECN 001A taught by Professor Scottcarrell during the Spring '10 term at UC Davis.

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Chapter 5 - Production Costs - Page 1 of 24 Practice Test...

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