Question 1

-Refer to Table 4.2, Box C should be filled with

Accepted Answer

A)  $0.
B)  $5
C)  $1
D)  $2E) All of the above
F) None of the above

Question 2

-Refer to Table 4.1, Box F should be filled with

Accepted Answer

A)  $0.
B)  $10.
C)  $100.
D)  $110.E) A) and B)
F) A) and C)

Question 3

If a firm's marginal cost is greater than its average total cost, its average total cost is

Accepted Answer

A)  increasing.
B)  constant.
C)  decreasing.
D)  not U-shaped.E) A) and D)
F) None of the above

Question 4

In order to be drawn correctly the gap between ATC and AVC is

Accepted Answer

A)  Constant.
B)  Diminishing until they cross at which point they diverge.
C)  Diminishing until they cross at which point they quickly reconverge.
D)  Shrinking but they never cross.E) B) and C)
F) A) and B)

Question 5

If MR<MC the firm should produce

Accepted Answer

A)  At this quantity.
B)  Fewer than this quantity.
C)  More than this quantity.
D)  Zero.E) C) and D)
F) B) and D)

Question 6

Average Total Cost is

Accepted Answer

A)  the addition to cost associated with one additional unit of output.
B)  the per unit cost of production.
C)  the per unit variable cost of production.
D)  the per unit fixed cost of production.E) None of the above
F) All of the above

Question 7

When a firm has many competitors selling the same good, in order to sell more of the good

Accepted Answer

A)  it only need produce more of the good
B)  it must, ironically, increase prices
C)  it must reduce the price it charges
D)  it must advertiseE) C) and D)
F) A) and B)

Question 8

Suppose the market price for a price taking firm is known to be $10, the total revenue accruing to it if it sells 100 is ____ and the total revenue accruing to it if it sells 200 is ____.

Accepted Answer

A)  $10, $10
B)  $100, $200
C)  $1000, $2000
D)  $1000, $1000E) A) and B)
F) A) and C)

Question 9

The result that a firm should produce where MC=MR except when the shutdown condition is met is based on the assumption that it is attempting to

Accepted Answer

A)  maximize profit.
B)  minimize marginal costs.
C)  maximize market share.
D)  minimize average costsE) B) and D)
F) A) and C)

Question 10

If the total cost of producing 19 wizzbies is $38,000 and the total cost of producing 20 wizzbies is $39,000, the average total cost of producing the 19th wizzbie is approximately

Accepted Answer

A)  $1,000
B)  $2,000
C)  $19,000
D)  $38,000E) B) and C)
F) A) and D)

Question 11

-Refer to Table 4.2, Box J should be filled with

Accepted Answer

A)  $0.
B)  $5.67.
C)  $9.00.
D)  $17.E) All of the above
F) B) and D)

Question 12

-Refer to Table 4.2, Box B should be filled with

Accepted Answer

A)  $0.
B)  $10.
C)  $20.
D)  $30.E) A) and B)
F) A) and C)

Question 13

Given the production function and total cost function shown in Chapter 4, as production increases, total costs

Accepted Answer

A)  decrease constantly.
B)  decrease for a while and then increase.
C)  increase constantly.
D)  increase for a while and then decrease.E) A) and D)
F) B) and C)

Question 14

When a firm has no competitors, in order to sell more of the good

Accepted Answer

A)  it only need produce more of the good.
B)  it must, ironically, increase prices.
C)  it must reduce the price it charges.
D)  it must keep prices steady.E) A) and D)
F) B) and D)

Question 15

When you derive the marginal and average product of labor curve

Accepted Answer

A)  The marginal product of labor cuts the average product labor at the point where the marginal product of labor is at its maximum.
B)  The marginal product of labor cuts the average product labor at the point where the average product of labor is at its maximum.
C)  The marginal product of labor cuts the average product labor at the point where the marginal product of labor is at its minimum.
D)  The marginal product of labor cuts the average product labor at the point where the average product of labor is at its minimum.E) A) and C)
F) C) and D)

Question 16

Which of the following algebraic expressions is inaccurate

Accepted Answer

A)  TC=TVC+TFC
B)  ATC=AFC+AVC
C)  MC=ATC-AVC
D)  AFC=ATC-AVCE) None of the above
F) A) and B)

Question 17

If the market price for a good produced by a price taking firm is $7, the firm's total revenue is

Accepted Answer

A)  a flat line at P=$7.
B)  parabolic.
C)  downward sloping.
D)  an upward sloping line beginning at the origin and having a slope of 7E) None of the above
F) B) and C)

Question 18

Costs which increase with an increase in output are called

Accepted Answer

A)  fixed costs.
B)  changeable costs.
C)  variable costs.
D)  unchangeable costs.E) B) and D)
F) C) and D)

Question 19

If the total cost of producing 19 wizzbies is $38,000 and the total cost of producing 20 wizzbies is $39,000, the marginal cost of producing the 20th wizzbie is approximately

Accepted Answer

A)  $1,000
B)  $2,000
C)  $19,000
D)  $38,000E) A) and B)
F) All of the above

Question 20

Suppose you are deciding whether or not to increase production. You are currently making a profit. If you produce one more unit your increase in cost will be $10, your average variable costs will increase to less than that and your average fixed costs will decrease. Finally, your average revenue will increase to $10, but your increase in revenue will be $10. You should

Accepted Answer

A)  Increase production by at least 1 unit.
B)  Increase production by exactly 1 unit.
C)  Leave production unchanged, profit is maximized where you are.
D)  Redo the math associated with decreasing production because that may result in greater profit.E) B) and C)
F) A) and D)

Exam 4: Firm Production, Cost, and Revenue

If the total cost of producing 19 wizzbies is $38,000 and the total cost of producing 20 wizzbies is $39,000, the marginal cost of producing the 20th wizzbie is approximately

Correct Answer
verified

Costs which increase with an increase in output are called

Correct Answer
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-Refer to Table 4.2, Box J should be filled with

Correct Answer
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When you derive the marginal and average product of labor curve

Correct Answer
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Which of the following algebraic expressions is inaccurate

Correct Answer
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The result that a firm should produce where MC=MR except when the shutdown condition is met is based on the assumption that it is attempting to

Correct Answer
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Suppose the market price for a price taking firm is known to be $10, the total revenue accruing to it if it sells 100 is and the total revenue accruing to it if it sells 200 is .

Correct Answer
verified

If the total cost of producing 19 wizzbies is $38,000 and the total cost of producing 20 wizzbies is $39,000, the average total cost of producing the 19th wizzbie is approximately

Correct Answer
verified

Given the production function and total cost function shown in Chapter 4, as production increases, total costs

Correct Answer
verified

If the market price for a good produced by a price taking firm is $7, the firm's total revenue is

Correct Answer
verified

In order to be drawn correctly the gap between ATC and AVC is

Correct Answer
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When a firm has no competitors, in order to sell more of the good

Correct Answer
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-Refer to Table 4.2, Box C should be filled with

Correct Answer
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Correct Answer
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When a firm has many competitors selling the same good, in order to sell more of the good

Correct Answer
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If a firm's marginal cost is greater than its average total cost, its average total cost is

Correct Answer
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If MR<MC the firm should produce

Correct Answer
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-Refer to Table 4.2, Box B should be filled with

Correct Answer
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-Refer to Table 4.1, Box F should be filled with

Correct Answer
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Average Total Cost is

Correct Answer
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Exam 4: Firm Production, Cost, and Revenue

If the total cost of producing 19 wizzbies is $38,000 and the total cost of producing 20 wizzbies is $39,000, the marginal cost of producing the 20th wizzbie is approximately

Correct AnswerverifiedShow Answer

Costs which increase with an increase in output are called

Correct AnswerverifiedShow Answer

-Refer to Table 4.2, Box J should be filled with

Correct AnswerverifiedShow Answer

When you derive the marginal and average product of labor curve

Correct AnswerverifiedShow Answer

Which of the following algebraic expressions is inaccurate

Correct AnswerverifiedShow Answer

The result that a firm should produce where MC=MR except when the shutdown condition is met is based on the assumption that it is attempting to

Correct AnswerverifiedShow Answer

Suppose the market price for a price taking firm is known to be $10, the total revenue accruing to it if it sells 100 is ____ and the total revenue accruing to it if it sells 200 is ____.

Correct AnswerverifiedShow Answer

If the total cost of producing 19 wizzbies is $38,000 and the total cost of producing 20 wizzbies is $39,000, the average total cost of producing the 19th wizzbie is approximately

Correct AnswerverifiedShow Answer

Given the production function and total cost function shown in Chapter 4, as production increases, total costs

Correct AnswerverifiedShow Answer

If the market price for a good produced by a price taking firm is $7, the firm's total revenue is

Correct AnswerverifiedShow Answer

In order to be drawn correctly the gap between ATC and AVC is

Correct AnswerverifiedShow Answer

When a firm has no competitors, in order to sell more of the good

Correct AnswerverifiedShow Answer

-Refer to Table 4.2, Box C should be filled with

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When a firm has many competitors selling the same good, in order to sell more of the good

Correct AnswerverifiedShow Answer

If a firm's marginal cost is greater than its average total cost, its average total cost is

Correct AnswerverifiedShow Answer

If MR<MC the firm should produce

Correct AnswerverifiedShow Answer

-Refer to Table 4.2, Box B should be filled with

Correct AnswerverifiedShow Answer

-Refer to Table 4.1, Box F should be filled with

Correct AnswerverifiedShow Answer

Average Total Cost is

Correct AnswerverifiedShow Answer

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Suppose the market price for a price taking firm is known to be $10, the total revenue accruing to it if it sells 100 is and the total revenue accruing to it if it sells 200 is .

Correct Answer
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