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Exam 13: The Costs of Production

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Question 181

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Table 13-3 -Refer to Table 13-3. The marginal product of the second worker is

A) 90 units.
B) 85 units.
C) 80 units.
D) 20 units.

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Question 182

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Fixed costs are those costs that remain fixed no matter how long the time horizon is.

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Question 183

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Analyzing the behavior of the firm enhances our understanding of

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

Suppose that Christine owns her own CPA firm. She uses only two inputs in her business: her hours worked (labor) and a computer (capital) . In the short run, Christine most likely considers

Suppose that a firm's long­run average total costs of producing televisions decreases as it produces between 10,000 and 20,000 televisions. For this range of output, the firm is experiencing

In the long run, when marginal cost is above average total cost, the average total cost curve exhibits

Which of the following expressions is correct?

If the average total cost curve is falling, what is necessarily true of the marginal cost curve? If the average total cost curve is rising, what is necessarily true of the marginal cost curve?

Table 13-18 -Refer to Table 13-18. What is the average variable cost of producing 500 units of output?

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?

Which of the following expressions is correct?

An example of an explicit cost for the owner of a tattoo parlor would be the wages that she could earn if she worked as a graphic artist for an advertising agency.

When calculating a firm's profit, an economist will subtract only

Scenario 13-13 Christine is an artist who creates custom cookie jars. Her annual revenue from selling the cookie jars is $90,000. The annual explicit costs of the materials used to make the cookie jars are $54,000. -Refer to Scenario 13-13. Christine used $5,000 from her personal savings account to buy pottery tools for her business. The savings account paid 1% annual interest. Christine could earn $6,000 per year as a tax preparer. What is the annual economic profit of her cookie jar business?

Figure 13-2 -Refer to Figure 13-2. The graph illustrates a typical

Scenario 13-8 Wanda owns a lemonade stand. She produces lemonade using five inputs: water, sugar, lemons, paper cups, and labor. Her costs per glass are as follows: $0.01 for water, $0.02 for sugar, $0.03 for lemons, $0.02 for cups, and $0.10 for the opportunity cost of her labor. She can sell 300 glasses for $0.50 each. -Refer to Scenario 13-8. What are Wanda's explicit costs per glass?

Scenario 13-7 Julia prepares tax returns and does bookkeeping. Last year her revenues from the tax and bookkeeping business were $150,000, and her expenses for the business were $15,000. When she started her tax and bookkeeping business, Julia gave up her supplemental job doing in-home pet sitting. She used to earn $10,000 per year from pet sitting. Assume that she incurred no costs for her pet sitting business. -Refer to Scenario 13-7. Julia's explicit costs are

To an economist, the field of industrial organization answers which of the following questions?

Assume a certain firm regards the number of workers it employs as variable but regards the size of its factory as fixed. This assumption is often realistic