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Exam 12: The Costs of Production

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Question 141

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Table 13-16 Listed in the table are the long-run total costs for three different firms. -Refer to Table 13-16. Which firm is experiencing diseconomies of scale?

A) Firm A only
B) Firm B only
C) Firm C only
D) Firm A and Firm B only

E) A) and B)
F) A) and C)

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Question 142

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A firm's total profit equals its marginal revenue minus its marginal cost.

A) True
B) False

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Question 143

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Scenario 13-3 Kachina is a senior majoring in graphic design at Awesome University AU) . While she has been attending college, Kachina started a computer consulting business to help senior citizens learn how to use their iPads. Kachina charges $25 per hour for her consulting services. She also works 5 hours a week for the Economics Department to maintain that department's Web page. The Economics Department pays Kachina $20 per hour. -Refer to Scenario 13-3. If Kachina can work additional hours at either job, what is the opportunity cost if she spends one hour reading a novel?

Consider a small hair styling salon. List some examples of implicit costs of this business.

Several related measures of cost can be derived from a firm's total cost.

Suppose that a firm's long­run average total costs of producing an individual income tax return is $75 when it produces 1,000 returns and $75 when it produces 1,200 returns. For this range of output, the firm is experiencing

The marginal-cost curve intersects the average-total-cost curve at the minimum point of the marginal-cost curve.

Kate is a florist. Kate can arrange 20 bouquets per day. She is considering hiring her husband William to work for her. William can arrange 18 bouquets per day. What would be the total daily output of Kate's firm if she hired her husband?

Table 13-3 -Refer to Table 13-3. At which number of workers does diminishing marginal product begin?

Which of the following expressions is correct?

Tom quit his $65,000 a year corporate lawyer job to open up his own law practice. In Tom's first year in business his total revenue equaled $150,000. Tom's explicit cost during the year totaled $85,000. What is Tom's economic profit for his first year in business?

A firm's opportunity costs of production are equal to its

In his book, An Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith credits economies of scale to

Let L represent the number of workers hired by a firm, and let Q represent that firm's quantity of output. Assume two points on the firm's production function are L = 12, Q = 122) and L = 13, Q = 130) . Then the marginal product of the 13th worker is

In the long run a company that produces and sells organic tofu incurs total costs of $1,200 when output is 1,200 units and $1,650 when output is 1,400 units. The tofu company exhibits

Consider a small family wheat farm. List some examples of implicit costs of farming.

A production function describes

Table 13-16 Listed in the table are the long-run total costs for three different firms. -Refer to Table 13-16. Which firm is experiencing constant returns to scale?

Average total cost and marginal cost express information that is already contained in a firm's total cost.

The fact that many inputs are fixed in the short run but variable in the long run has little impact on the firm's cost curves.