Chapter 7 Study Quiz - Assignment Essays

question

I'MaPizzaCo. produces and sells specialty pizzas. Last year, it produced 8,000 mushroom,sausage and spinach pizzas and sold each one for $8. To produce these 8,000 specialty pizzas,the company incurred variable costs of $24,000 and a total cost of $40,000. I'MaPizzaCo'saverage fixed cost to produce 8,000 specialty pizzas was:

answer

$2.00

question

Refer to the above graph. There are diseconomies of scale:

answer

After Q4

question

___________ include all spending on labor, machinery, tools, and supplies purchased from other firms.

answer

Total costs

question

I'MaGadgetCo. produces and sells widgets. Last year, it produced 9,000 widgets and soldeach one for $8. To produce the 9,000 widgets, the company incurred variable costs of $27,000and a total cost of $36,000. I'MaGadgetCo's total profit or loss to produce 9,000 widgets was:

answer

$36,000 profit

question

Refer to the above graph. There are constant returns to scale:

answer

From Q2 to Q4

question

The marginal product of an input is

answer

the addition to total output due to the addition of the last unit of an input, holding all other inputs constant.

question

Accounting costs represent

answer

explicit costs paid by the firm.

question

The ______________ of all firms can be broken down into some common underlying patterns.

answer

cost structure

question

The economies-of-scale curve is a long-run average cost curve, because

answer

it allows all factors of production to change.

question

In order to determine the average variable cost, the firm's variable costs are divided by____________.

answer

the quantity of output

question

If a paper mill shuts down its operations for three months so that it produces nothing, its __________________ will be reduced to zero?

answer

variable costs

question

Which of the following should typically be ignored because spending has already been made and cannot be changed?

answer

sunk costs

question

_______________ occur when the marginal gain in output diminishes as each additional unit of input is added.

answer

Diminishing marginal returns

question

I''MABigCorp. produces and sells kitchenware. Last year, it produced 7,000 can openersand sold each one for $6. To produce the 7,000 can openers, the company incurred variablecosts of $28,000 and a total cost of $45,000. I'MABIGCorp.'s average fixed cost to produce the7,000 can openers was:

answer

$2.43

question

Whatever the firm's quantity of production, _____________ must exceed total costs if it is to earn a profit.

answer

total revenue

question

Refer to the table below. At an output of 3 units, the average variable cost is

answer

$14

question

Economic profits are equal to

answer

total revenues minus the implicit and explicit costs of all inputs used.

question

__________ represent the opportunity cost of using resources that the firm already owns.

answer

Implicit costs

question

Why would labor be treated as a variable cost?

answer

producing larger quantities of a good or service generally requires more workers

question

If a firm is experiencing _____________________, then as the quantity of output rises, the average cost of production rises.

answer

decreasing returns to scale

question

______________ include the costs of production that increase with the quantity produced.

answer

Variable costs

question

The term _____________ is used to describe the additional cost of producing one more unit.

answer

marginal cost

question

A situation known as ______________ occurs when all production inputs are allowed to expand, but that expansion does not result in much of a change in the average cost of production.

answer

constant returns to scale

question

Implicit costs are

answer

the opportunity costs of using factors that a producer does not buy or hire but already owns.

question

Refer to the above graph. There are economies of scale:

answer

From Q1 to Q2

question

I'MaPizzaCo. produces and sells specialty pizzas. Last year, it produced 8,000 mushroom, sausage and spinach pizzas and sold each one for $8. To produce these 8,000 specialty pizzas, the company incurred variable costs of $24,000 and a total cost of $40,000. I'MaPizzaCo's average variable cost to produce 8,000 specialty pizzas was:

answer

$3.00

question

Fixed costs are important because, at least in the ___________, the firm _____________.

answer

short run; cannot alter them

question

The term "constant returns to scale" describes a situation where

answer

expanding all inputs does not change the average cost of production.

question

In microeconomics, the term _____________________ is synonymous with economies of scale.

answer

increasing returns to scale

question

In the table below, when the firm employs 2 workers, the marginal product of the second worker is

Input of Labor Total Product

0 0
1 30
2 68
3 110
4 140
5 135

answer

38 smartphones

question

The term __________________ describes a situation where the quantity of output rises, but the average cost of production falls.

answer

economies of scale

question

In the table below, when the firm employs 4 workers, the marginal product of the fourth worker is

Input of Labor Total Product

0 0
1 30
2 68
3 110
4 140
5 135

answer

30 smartphones

question

____________ tells a firm whether it can earn profits given the price in the market.

answer

Average cost

question

Accounting profit can be calculated as

answer

total revenue - explicit costs.

question

I'MaPizzaCo. produces and sells specialty pizzas. Last year, it produced 8,000 mushroom, sausage and spinach pizzas and sold each one for $8. To produce these 8,000 specialty pizzas, the company incurred variable costs of $24,000 and a total cost of $40,000. I'MaPizzaCo's total profit or loss to produce 8,000 specialty pizzas was:

answer

$24,000 profit

question

In the long run, firms can choose their production technology, and so all costs become ______ costs.

answer

variable

question

A firm's ________ consist of expenditures that must be made before production starts that ________ over the short run regardless of the level of production.

answer

fixed costs, do not change

question

The marginal cost curve is generally __________, because diminishing marginal returns implies that additional units are ____________.

answer

upward-sloping; more costly to produce

question

In order to calculate marginal cost, the change in ______________ is divided by the amount of change in quantity.

answer

either total cost or variable cost

question

A firm's accounting profit is the result of total revenue minus ______ costs.

answer

explicit

question

The table below sets out cost information for the production of volleyballs. Some values are missing. What is the correct answer for the cell containing A?

answer

1 of 41

question

answer

$2.00

question

Refer to the above graph. There are diseconomies of scale:

answer

After Q4

question

___________ include all spending on labor, machinery, tools, and supplies purchased from other firms.

answer

Total costs

question

answer

$36,000 profit

question

Refer to the above graph. There are constant returns to scale:

answer

From Q2 to Q4

question

The marginal product of an input is

answer

the addition to total output due to the addition of the last unit of an input, holding all other inputs constant.

question

Accounting costs represent

answer

explicit costs paid by the firm.

question

The ______________ of all firms can be broken down into some common underlying patterns.

answer

cost structure

question

The economies-of-scale curve is a long-run average cost curve, because

answer

it allows all factors of production to change.

question

In order to determine the average variable cost, the firm's variable costs are divided by____________.

answer

the quantity of output

question

If a paper mill shuts down its operations for three months so that it produces nothing, its __________________ will be reduced to zero?

answer

variable costs

question

Which of the following should typically be ignored because spending has already been made and cannot be changed?

answer

sunk costs

question

_______________ occur when the marginal gain in output diminishes as each additional unit of input is added.

answer

Diminishing marginal returns

question

answer

$2.43

question

Whatever the firm's quantity of production, _____________ must exceed total costs if it is to earn a profit.

answer

total revenue

question

Refer to the table below. At an output of 3 units, the average variable cost is

answer

$14

question

Economic profits are equal to

answer

total revenues minus the implicit and explicit costs of all inputs used.

question

__________ represent the opportunity cost of using resources that the firm already owns.

answer

Implicit costs

question

Why would labor be treated as a variable cost?

answer

producing larger quantities of a good or service generally requires more workers

question

If a firm is experiencing _____________________, then as the quantity of output rises, the average cost of production rises.

answer

decreasing returns to scale

question

______________ include the costs of production that increase with the quantity produced.

answer

Variable costs

question

The term _____________ is used to describe the additional cost of producing one more unit.

answer

marginal cost

question

A situation known as ______________ occurs when all production inputs are allowed to expand, but that expansion does not result in much of a change in the average cost of production.

answer

constant returns to scale

question

Implicit costs are

answer

the opportunity costs of using factors that a producer does not buy or hire but already owns.

question

Refer to the above graph. There are economies of scale:

answer

From Q1 to Q2

question

I'MaPizzaCo. produces and sells specialty pizzas. Last year, it produced 8,000 mushroom, sausage and spinach pizzas and sold each one for $8. To produce these 8,000 specialty pizzas, the company incurred variable costs of $24,000 and a total cost of $40,000. I'MaPizzaCo's average variable cost to produce 8,000 specialty pizzas was:

answer

$3.00

question

Fixed costs are important because, at least in the ___________, the firm _____________.

answer

short run; cannot alter them

question

The term "constant returns to scale" describes a situation where

answer

expanding all inputs does not change the average cost of production.

question

In microeconomics, the term _____________________ is synonymous with economies of scale.

answer

increasing returns to scale

question

In the table below, when the firm employs 2 workers, the marginal product of the second worker is

Input of Labor Total Product

0 0
1 30
2 68
3 110
4 140
5 135

answer

38 smartphones

question

The term __________________ describes a situation where the quantity of output rises, but the average cost of production falls.

answer

economies of scale

question

In the table below, when the firm employs 4 workers, the marginal product of the fourth worker is

Input of Labor Total Product

0 0
1 30
2 68
3 110
4 140
5 135

answer

30 smartphones

question

____________ tells a firm whether it can earn profits given the price in the market.

answer

Average cost

question

Accounting profit can be calculated as

answer

total revenue - explicit costs.

question

I'MaPizzaCo. produces and sells specialty pizzas. Last year, it produced 8,000 mushroom, sausage and spinach pizzas and sold each one for $8. To produce these 8,000 specialty pizzas, the company incurred variable costs of $24,000 and a total cost of $40,000. I'MaPizzaCo's total profit or loss to produce 8,000 specialty pizzas was:

answer

$24,000 profit

question

In the long run, firms can choose their production technology, and so all costs become ______ costs.

answer

variable

question

A firm's ________ consist of expenditures that must be made before production starts that ________ over the short run regardless of the level of production.

answer

fixed costs, do not change

question

The marginal cost curve is generally __________, because diminishing marginal returns implies that additional units are ____________.

answer

upward-sloping; more costly to produce

question

In order to calculate marginal cost, the change in ______________ is divided by the amount of change in quantity.

answer

either total cost or variable cost

question

A firm's accounting profit is the result of total revenue minus ______ costs.

answer

explicit

question

The table below sets out cost information for the production of volleyballs. Some values are missing. What is the correct answer for the cell containing A?

answer

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