QUESTION 1

- This question refers to information from the problem # 6, page 276, under Problems and Applications, chapter 13 in the textbook. What is the pizzzaria's marginal cost if output increases from 0 to 1 units?
- A.0
- B.$40
- C.$30
- D.$50

- This question refers to information from the problem # 10, page 277, under Problems and Applications, chapter 13 in the textbook. Which of the following firms experiences diseconomies of scale her entire production from 1 to 7 units?
- A.All firms
- B.Firm C
- C.Firm B
- D.Firm A

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- When a firm produces nothing, total cost is equal to total fixed cost.
- True
- False

- This question refers to information from the problem # 6, page 276, under Problems and Applications, chapter 13 in the textbook. What is the pizzzaria's marginal cost if output increases from 4 to 5 units?
- A.$30
- B.$40
- C.$50
- D.0

- This question refers to information from the problem # 10, page 277, under Problems and Applications, chapter 13 in the textbook. Which of the following firms experiences economies of scale her entire production from 1 to 7 units?
- A.Firm BB.All firmsC.Firm CD.Firm A

**Total Output****Total Cost**- 0
- $100
- 2
- $196
- 4
- $212
- 6
- $310
- 8
- $430
- 10
- $570
- In the table above, total fixed costs are equal to
- A.$98.B.Cannot be determined from the information provided.C.$53.D.$100.E.$10.

- Economic profit is
- A.total revenue minus total cost.B.part of total cost.C.the opportunity cost of doing business.D.total variable cost minus total fixed cost.E.total revenue minus explicit cost.

- Marginal cost is the change in total variable cost divided by change in output.
- True
- False

** **

- In the long run, which of the following inputs are fixed?
- A.None of the above.B.Raw materialsC.LaborD.LandE.Capital

- In the long run, all costs are fixed while all costs are variable in the short run.
- True
- False

- This question refers to information from the problem # 1, page 276, under Problems and Applications, chapter 13 in the textbook. Fill the type of cost that best completes sentence
__b__ - A.variable costB.marginal costC.average total costD.fixed costE.total cost

- If a firm produces 10 units of output and incurs $30 in average variable cost and $5 in average fixed cost, average total cost is:
- A.B.$50
- C.$35
- D.$30
- E.$300

** **

- This question refers to information from the problem # 6, page 276, under Problems and Applications, chapter 13 in the textbook. What is the pizzzaria's fixed cost?
- A.$300B.$0C.$540D.$240

- If a firm has constant returns to scale, then doubling all of its inputs will just double its output.
- True
- False

- This question refers to information from the problem # 2, page 276, under Problems and Applications, chapter 13 in the textbook. What is the economic profit of running a hardware store for a year?
- A.$50,000B.- $40,000C.$10,000D.0

- This question refers to information from the problem # 1, page 276, under Problems and Applications, chapter 13 in the textbook. Fill the type of cost that best completes sentence
__f__ - A.fixed costB.Total costC.marginal costD.variable costE.Average total cost

- When total product is decreasing, marginal physical product is
- A.positive.B.zero.C.decreasing.D.increasing.E.negative.

** **

- If the total cost of producing 6 units is $228 and the total cost of producing 7 units is $245, what is the marginal cost of producing the seventh unit?
- A.$245B.$17C.$38D.$3E.$35

- Average total cost can be computed total cost divided by output.
- True
- False

- If marginal product is increasing as an additional unit of an input is added, then according to the principle of diminishing returns, marginal cost must be also increasing as output is increased.
- True
- False

** **

- If one worker can produce 3 desks and two workers can produce 5 desks, the marginal product of the second worker is 2 desks.
- True
- False

- Suppose that for 20 bicycles, the total fixed cost is $100 and total variable cost is $300. Then
- A.AFC = $5 and AVC = $10B.AFC = $100 and AVC = $300C.AFC = $5 and AVC = $15D.AFC = $20 and AVC = $20E.AFV = $10 and AVC = $20

- If the firm is making economic profit, then accounting profit is greater than normal profit.
- True
- False

- This question refers to information from the problem # 2, page 276, under Problems and Applications, chapter 13 in the textbook. What is the total cost of running a hardware store for a year?

A.$50,000B.$500,000C.$550,000D.$510,000

- Generally, total fixed costs decline as output is increased.
- True
- False

- At its minimum point, the average-total-cost curve is intersected by the
- A.total-variable-cost curve.B.average-fixed-cost curve.C.average-variable-cost curve.D.marginal-cost curve.E.total-fixed-cost curve.

- When total product reaches a maximum,
- A.it is equal to average product.B.marginal product is less than zero.C.marginal product is equal to zero.D.average product is less than zero.E.average product is equal to zero.

- If average variable cost is falling, then marginal cost is above the average variable cost.
- True
- False

** **

- In the figure above, the curve marked II is the firm's
- A.marginal-cost curve.B.total-cost curve.C.average-fixed-cost curve.D.average-total-cost curve.E.average-variable-cost curve.

- This question refers to information from the problem # 2, page 276, under Problems and Applications, chapter 13 in the textbook. What is your aunt's opportunity cost of running a hardware store for a year?
- A.$500,000B.$510,000C.$550,000D.$50,000