Chapter 13 MC Section 13The Costs of Production.docx

1、Chapter 13 MC Section 13 The Costs of ProductionChapter 13The Costs of ProductionMultiple Choice 1. According to the law of supply,a. firms production levels are not correlated with the price of a good.b. the supply curve will slope downward when demand decreases.c. firms are willing to produce a gr

2、eater quantity of a good when the price of the good is higher.d. the supply curve identifies the points where the firm minimizes its marginal costs. 2. Economists normally assume that the goal of a firm is to(i) make profit as large as possible even if it means reducing output.(ii) make profit as la

3、rge as possible even if it means incurring a higher total cost.(iii) make revenue as large as possible.a. (i) and (ii) are true.b. (i) and (iii) are true.c. (ii) and (iii) are true.d. (i), (ii), and (iii) are true. 3. Economic profit is equal toa. total revenue minus the explicit cost of producing g

4、oods and services.b. total revenue minus the opportunity cost of producing goods and services.c. total revenue minus the accounting cost of producing goods and services.d. average revenue minus the average cost of producing the last unit of a good or service.Scenario 13-1Tony is a wheat farmer, but

5、he also spends part of his day teaching guitar lessons. Due to the popularity of his local country western band, Farmer Tony has more students requesting lessons than he has time for if he is to also maintain his farming business. Farmer Tony charges $25 an hour for his guitar lessons. One spring da

6、y, he spends 10 hours in his fields planting $130 worth of seeds on his farm. He expects that the seeds he planted will yield $300 worth of wheat. 4. Refer to Scenario 13-1. What is the total opportunity cost of the day that Farmer Tony incurred for his spring day in the field planting wheat?a. $130

7、b. $250c. $300d. $380 5. Refer to Scenario 13-1. Tonys accountant would most likely figure the total cost of his wheat planting to equala. $25b. $130c. $300d. $380 6. Refer to Scenario 13-1. Tonys accounting profit equalsa. $-80b. $130c. $170d. $260 7. Refer to Scenario 13-1. Tonys economic profit e

8、qualsa. $-130b. $-80c. $130d. $170 8. The difference between accounting profit and economic profit relates toa. the manner in which revenues are defined.b. how total revenue is calculated.c. the manner in which costs are defined.d. the price of the good in the market. 9. When adding another unit of

9、labor leads to an increase in output that is smaller than the increases in output that resulted from adding previous units of labor, we have the property ofa. diminishing labor.b. diminishing output.c. diminishing marginal product.d. negative marginal product. 10. Which of the following statements a

10、bout a production function is correct for a firm that uses labor to produce output?a. The production function depicts the relationship between the quantity of labor and the quantity of output.b. The slope of the production function measures marginal cost.c. The quantity of output determines the maxi

11、mum amount of labor the firm will hire.d. All of the above are correct. 11. For a firm, the relationship between the quantity of inputs and quantity of output is called thea. profit function.b. production function.c. total-cost function.d. quantity function. 12. Suppose a certain firm is able to pro

12、duce 165 units of output per day when 15 workers are hired. The firm is able to produce 176 units of output per day when 16 workers are hired (holding other inputs fixed). Then the marginal product of the 16th worker isa. 10 units of output.b. 11 units of output.c. 16 units of output.d. 176 units of

13、 output.Table 13-1Number of WorkersOutput001502110318042605330 13. Refer to Table 13-1. What is the marginal product of the fourth worker?a. 65b. 70c. 75d. 80 14. Refer to Table 13-1. At which number of workers does diminishing marginal product begin?a. 2b. 3c. 4d. 5 15. When the marginal product of

14、 an input declines as the quantity of that input increases, the production function exhibitsa. increasing returns to scale.b. decreasing returns to scale.c. diminishing total product.d. diminishing marginal product. 16. The total cost curve gets steeper as output increases due toa. diseconomies of s

15、cale.b. economies of scale.c. diminishing marginal product.d. increasing returns to scale. 17. Suppose Jan started up a small lemonade stand business last month. Variable costs for Jans lemonade stand now include the cost ofa. building the lemonade stand.b. hiring an artist to design a logo for her

16、sign.c. lemonade mix.d. All of the above are correct. 18. The amount by which total cost rises when the firm produces one additional unit of output is calleda. average cost.b. marginal cost.c. fixed cost.d. variable cost. 19. Marginal cost equalsa. total cost divided by quantity of output produced.b

17、. total output divided by the change in total cost.c. the slope of the total cost curve.d. the slope of the line drawn from the origin to the total cost curve. 20. Diminishing marginal product suggests that the marginala. cost of an extra worker is unchanged.b. cost of an extra worker is less than t

18、he previous workers marginal cost.c. product of an extra worker is less than the previous workers marginal product.d. product of an extra worker is greater than the previous workers marginal product. 21. When marginal cost is less than average total cost,a. marginal cost must be falling.b. average v

19、ariable cost must be falling.c. average total cost is falling.d. average total cost is rising. 22. Marginal cost is equal to average total cost whena. average variable cost is falling.b. average fixed cost is rising.c. marginal cost is at its minimum.d. average total cost is at its minimum.Figure 13

20、-1 23. Refer to Figure 13-1. Which of the following can be inferred from the figure above?(i) Marginal cost is increasing at all levels of output.(ii) Marginal product is increasing at low levels of output.(iii) Marginal product is decreasing at high levels of output.a. (i) and (ii)b. (ii) and (iii)

21、c. (i) and (iii)d. (ii) only 24. Total cost can be divided into two types of costs. Those two types area. fixed costs and variable costs.b. fixed costs and marginal costs.c. variable costs and marginal costs.d. average costs and marginal costs. 25. Average total cost (ATC) is calculated as follows:a

22、. ATC = (change in total cost)/(change in quantity of output).b. ATC = (change in total cost)/(change in quantity of input).c. ATC = total cost/quantity of output.d. ATC = total cost/quantity of input. 26. In the short run, a firm incurs fixed costsa. only if it incurs variable costs.b. only if it p

23、roduces no output.c. only if it produces a positive quantity of output.d. whether it produces output or not.Figure 13-2 27. Refer to Figure 13-2. Which of the figures represents the total cost curve for a firm?a. Figure 1b. Figure 2c. Figure 3d. Figure 4 28. Refer to Figure 13-2. Which of the figure

24、s represents the marginal cost curve for a firm?a. Figure 1b. Figure 2c. Figure 3d. Figure 4 29. Refer to Figure 13-2. Which of the figures represents the production function for a firm?a. Figure 1b. Figure 2c. Figure 3d. Figure 4 30. Which of the following statements about costs is correct?a. When

25、marginal cost is less than average total cost, average total cost is rising.b. The total cost curve is U-shaped.c. As the quantity of output increases, marginal cost eventually rises.d. All of the above are correct. 31. The firms efficient scale is the quantity of output that minimizesa. average tot

26、al cost.b. average fixed cost.c. average variable cost.d. marginal cost. 32. At what level of output will average variable cost equal average total cost?a. When marginal cost equals average total costb. For all levels of output in which average variable cost is fallingc. When marginal cost equals av

27、erage variable costd. There is no level of output where this occurs, as long as fixed costs are positive. 33. When a firm is able to put idle equipment to use by hiring another worker,a. variable costs will rise.b. variable costs will fall.c. fixed costs will fall.d. fixed costs and variable costs w

28、ill rise. 34. When marginal cost is rising, average variable costa. must be rising.b. must be falling.c. must be constant.d. could be rising or falling. 35. Suppose that for a particular firm the only variable input into the production process is labor and that output equals zero when no workers are

29、 hired. In addition, suppose that marginal cost when three workers are hired is $40 and the average total cost when three workers are hired is $50. What is the total cost of production when three workers are hired?a. $50b. $90c. $120d. $150 36. When marginal cost is greater than average cost, averag

30、e cost isa. rising.b. falling.c. constant.d. either rising or falling depending on the economies of scale. 37. Which of the following is not a property of a firms cost curves?a. Marginal cost must eventually rise as a result of diminishing marginal product.b. Average total cost is U-shaped.c. Econom

31、ies of scale will exist when average total cost falls as output rises.d. Average total cost will cross marginal cost at the minimum of marginal cost. 38. Miller Technologies has average variable costs of $1 and average total costs of $3 when it produces 500 units of output. The firms total fixed costs equala. $500b. $1,000c. $1,500d. $2,000 39. Given the cost curves shown in the diagram below, the efficient scale of production occurs at pointa. A.b. B.c. C.d. D. 40. The length of the short runa. is different for diffe