Question 1

Max is taking a economics class in which he is currently average a C grade. If Max receives a B On his next exam his grade will:

Accepted Answer

A)   not change.
B)   decrease.
C)   increase.
D)   be equal to B.E) All of the above
F) None of the above

Question 2

Fixed costs:

Accepted Answer

A)   are only present in the long run.
B)   are present even if production is zero.
C)   are influenced by worker productivity.
D)   are the same as explicit costs.E) A) and B)
F) A) and C)

Question 3

If all inputs in a production process were doubled and output more than doubled, it would be an Example of:

Accepted Answer

A)   diseconomies of scale.
B)   diminishing returns.
C)   economies of scale.
D)   specialization.E) B) and C)
F) All of the above

Question 4

A number of factors influence productivity, which of the following affect both the macro and Micro level in the economy?

Accepted Answer

A)   government policies
B)   management techniques
C)   labour force
D)   economic conditionsE) A) and B)
F) A) and C)

Question 5

Diseconomies of scale and diminishing returns differ in the following way:

Accepted Answer

A)   diseconomies of scale cause average costs to decrease.
B)   diseconomies of scale occur in the short run only.
C)   diseconomies of scales occur in large firms, whereas diminishing returns affect small firms only.
D)   diminishing returns occur in the short run only.E) A) and B)
F) A) and C)

Question 6

Someone withdraws $10 000 from an account that paid 10% annual interest and used the funds to purchase real estate. After one year that person sold the real estate property for $10 500. An Economist would calculate the economic profit on the real estate sale to be:

Accepted Answer

A)   -$500
B)   $0
C)   $500
D)   $1500E) B) and C)
F) A) and D)

Question 7

If the total cost of producing 4 chairs is $146 and the marginal cost of producing the 5th chair is $26, then average total cost of producing 5 chairs is:

Accepted Answer

A)   $5.20 per chair.
B)   $6.50
C)   $34.40
D)   $36.50 per chair.E) A) and B)
F) All of the above

Question 8

If the Essex Produce Company owns the building that it operates from, it should consider the Money that it could earn by renting the building out to someone else. This lost rent, or opportunity cost, is part of:

Accepted Answer

A)   variable costs.
B)   short-run costs.
C)   explicit costs.
D)   implicit costs.E) B) and C)
F) A) and B)

Question 9

When marginal product is less than average product:

Accepted Answer

A)   the average product is increasing.
B)   the marginal product is always rising.
C)   the marginal and average products are equal.
D)   the average product is falling.E) B) and C)
F) A) and D)

Question 10

As output increases, the ATC and AVC curves get closer together because:

Accepted Answer

A)   marginal costs cause both to continually increase.
B)   average fixed costs become less and less.
C)   fixed costs disappear in the long run.
D)   none of the above is necessarily correctE) All of the above
F) A) and B)

Question 11

Economies of scale:

Accepted Answer

A)   only occur in very large firms.
B)   result from worker specialization and the use of more efficient equipment.
C)   take over when the worker specialization ends.
D)   result in a decline in short-run average costs.E) None of the above
F) All of the above

Question 12

A number of factors influence productivity, which of the following affects the macro level in the economy?

Accepted Answer

A)   labour force
B)   scale of business operations
C)   economic conditions
D)   management techniquesE) A) and D)
F) B) and C)

Question 13

Which of the following is most likely to be a variable cost?

Accepted Answer

A)   insurance premiums
B)   interest payments on loans
C)   transportation costs
D)   property taxesE) C) and D)
F) B) and C)

Question 14

The most significant reason why a firm may not be able to maximize profits is:

Accepted Answer

A)   due to incomplete information.
B)   unsuccessful advertising.
C)   inability to produce at lowest cost.
D)   inability to produce output on time.E) B) and D)
F) A) and B)

Question 15

When marginal product is greater than average product:

Accepted Answer

A)   the marginal and average products are equal.
B)   the average product is increasing.
C)   the average product is falling.
D)   the marginal product is always rising.E) B) and C)
F) A) and B)

Question 16

Which of the following statements is true?

Accepted Answer

A)   Adding an additional worker will diminish marginal productivity at some point.
B)   Adding an additional worker will always increase average productivity.
C)   Adding an additional worker will always diminish marginal productivity.
D)   Adding an additional worker will always increase total production.E) All of the above
F) None of the above

Question 17

Someone withdraws $10 000 from an account that paid 5% annual interest and used the funds to purchase real estate. After one year that person sold the real estate property for $13 000. An Economist would calculate the economic profit on the real estate sale to be:

Accepted Answer

A)   $500
B)   $2500
C)   $3000
D)   $13 000E) B) and C)
F) A) and B)

Question 18

The short run is described as a period of time:

Accepted Answer

A)   when the firm can adjust all the input into the production process.
B)   in which production levels cannot be changed.
C)   when the firm cannot adjust any input into the production process.
D)   when at least one input into the production process cannot be changed.E) A) and B)
F) A) and C)

Question 19

The production function is the relationship between:

Accepted Answer

A)   the number of workers hired and total costs of production.
B)   changes in inputs and changes in output.
C)   changes in output and the changes in explicit costs only.
D)   the changes in the number of units produced and changes in total production costs.E) B) and C)
F) A) and B)

Question 20

Which of the following is most likely to be a fixed cost?

Accepted Answer

A)   transportation
B)   energy
C)   wages
D)   property taxesE) All of the above
F) C) and D)

Exam 11: Production Costs

If the Essex Produce Company owns the building that it operates from, it should consider the Money that it could earn by renting the building out to someone else. This lost rent, or opportunity cost, is part of:

Correct AnswerverifiedShow Answer

Economies of scale:

Correct AnswerverifiedShow Answer

A number of factors influence productivity, which of the following affect both the macro and Micro level in the economy?

Correct AnswerverifiedShow Answer

If all inputs in a production process were doubled and output more than doubled, it would be an Example of:

Correct AnswerverifiedShow Answer

The production function is the relationship between:

Correct AnswerverifiedShow Answer

Max is taking a economics class in which he is currently average a C grade. If Max receives a B On his next exam his grade will:

Correct AnswerverifiedShow Answer

Which of the following is most likely to be a fixed cost?

Correct AnswerverifiedShow Answer

Which of the following is most likely to be a variable cost?

Correct AnswerverifiedShow Answer

The short run is described as a period of time:

Correct AnswerverifiedShow Answer

A number of factors influence productivity, which of the following affects the macro level in the economy?

Correct AnswerverifiedShow Answer

If the total cost of producing 4 chairs is $146 and the marginal cost of producing the 5th chair is $26, then average total cost of producing 5 chairs is:

Correct AnswerverifiedShow Answer

When marginal product is less than average product:

Correct AnswerverifiedShow Answer

Someone withdraws $10 000 from an account that paid 5% annual interest and used the funds to purchase real estate. After one year that person sold the real estate property for $13 000. An Economist would calculate the economic profit on the real estate sale to be:

Correct AnswerverifiedShow Answer

When marginal product is greater than average product:

Correct AnswerverifiedShow Answer

Someone withdraws $10 000 from an account that paid 10% annual interest and used the funds to purchase real estate. After one year that person sold the real estate property for $10 500. An Economist would calculate the economic profit on the real estate sale to be:

Correct AnswerverifiedShow Answer

As output increases, the ATC and AVC curves get closer together because:

Correct AnswerverifiedShow Answer

Fixed costs:

Correct AnswerverifiedShow Answer

The most significant reason why a firm may not be able to maximize profits is:

Correct AnswerverifiedShow Answer

Diseconomies of scale and diminishing returns differ in the following way:

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified