Econ 101 Midterm 3 - Assignment Essays

question

Jacquelyn is a student at a major state university. Which of the following is NOT an explicit cost of her attending college?

answer

C: the salary that she could have earned working full-time

question

Which of the following statements about opportunity cost is FALSE?

answer

D: Opportunity cost is synonymous with explicit cost.

question

After earning your BA, you have to decide whether to take a job that will pay you $45,000 per year or spend an additional two years earning an MBA. If you decide to pursue the graduate degree, your annual expenses for tuition, books, board, and lodging will be $32,000. You have been offered a scholarship for $10,000 per year, but to pay the remaining $22,000 per year, you would have to cash in savings bonds from your grandparents that have been earning $500 in interest per year. The annual opportunity cost of earning your MBA is:

answer

A: $67,500.

question

You own a small deli that sells sandwiches, salads, and soup. Which of the following is an implicit cost of the business?

answer

B: the job offer you did not accept at a local catering service

question

Sarah's accountant tells her that she made a profit of $43,002 running a pottery studio in Orlando. Sarah's husband, an economist, claims Sarah lost $43,002 running her pottery studio. This means her husband is claiming that she incurred _____ in _____ costs.

answer

A: $86,004; implicit

question

If the accounting profit for a firm is negative:

answer

B: the economic profit must be negative.

question

Profit computed without implicit costs is _____ profit.

answer

B: accounting

question

Suppose a local floral shop has explicit costs of $200,000 per year and implicit costs of $50,000 per year. If the store earned an economic profit of $50,000 last year, the store's accounting profit equaled:

answer

C: $100,000

question

Economic profit is:

answer

A: less than accounting profit if implicit costs exist.

question

Profit is the difference between _____ and _____.

answer

C: total revenues; total costs

question

The _____ is the increase in output that is produced when a firm hires an additional worker.

answer

C: marginal product

question

The total product curve(or production function):

answer

B: will become flatter as output increases if there are diminishing returns to the
variable input.

question

An input whose quantity can be changed in the short run is a(n) _____ input.

answer

D: variable

question

An input whose quantity CANNOT be changed in the short run is:

answer

B: fixed

question

The marginal product of labor is:

answer

B: the slope of the total product of labor curve.

question

(Table: Total Product and Marginal Product) Look at the table Total Product and Marginal Product. The marginal product of the fourth worker is _____ units.

answer

A: 20

question

(Table: Total Product and Marginal Product) Look at the table Total Product and Marginal Product. Negative marginal returns begin when the _____ worker is added.

answer

D: 8th

question

You own a deli. Which of the following is most likely a fixed input at your deli?

answer

A: the dining room

question

You own a deli. Which of the following is a decision most likely to be made in the long run?

answer

C: You renovate the second floor of your building to increase the size of the dining
room.

question

The term diminishing returns/product refers to:

answer

D: a decrease in the extra output due to the use of an additional unit of a variable input
when all other inputs are held constant.

question

Diminishing returns/product to an input occur:

answer

B: when some inputs are fixed and some are variable.

question

The total cost curve for a snowmobile dealership shows how _____ cost depends on the quantity of _____.

answer

C: total; output

question

A fixed cost

answer

C: can be positive, even if the firm doesn't produce any output in the short run.

question

The sum of fixed and variable costs is _____ cost.

answer

A: total

question

Once diminishing returns have set in, as output increases, the total cost curve:

answer

A: gets steeper

question

The total cost curve(or production function) gets steeper as output increases because of:

answer

B: decreasing returns to the variable input.

question

The change in total output resulting from a one-unit increase in the quantity of an input used, holding the quantities of all other inputs constant, is:

answer

D: marginal product

question

Which of the following statements is FALSE?

answer

A: When the marginal product of labor is upward-sloping, the marginal cost curve is
upward-sloping.

question

The larger the output, the more output over which fixed cost is distributed. Called the _____ effect, this leads to a ______ average _____ cost.

answer

A: spreading; lower; fixed

question

The larger the output, the more variable input required to produce additional units. Called the _____ effect, this leads to a ______ average _____ cost.

answer

D: diminishing returns; higher; variable

question

The average total cost curve has a U shape because the ______ effect is dominant at low levels of output, and the _____ effect is dominant at high levels of output.

answer

B: spreading; diminishing returns

question

For most restaurants, the average total cost curve _____ at _____ levels of output, then _____ at _____ levels.

answer

A: falls; low; rises; high

question

The _____ cost curve is NOT affected by diminishing returns.

answer

A: average fixed

question

Austin's total fixed cost is $3,600 a month at his cupcake bakery. Austin employs 20 workers and pays each worker $600 a month. If labor is his only variable cost, what is Austin's total cost?

answer

C: $15,600

question

The marginal cost curve intersects the average variable cost curve at:

answer

A: its lowest point

question

When marginal cost is BELOW average variable cost, average variable cost must be:

answer

C: falling

question

If marginal cost is GREATER THAN average total cost:

answer

A: average total cost increasing

question

When a fine caterer produces 30 catered meals, its marginal cost and average variable cost each equal $10. Therefore, assuming normally shaped cost curves, at 29 meals its marginal cost is _____ $10 and its average variable cost is _____ $10.

answer

B: less than; more than

question

(Figure: A Firm's Cost Curves) Look at the figure A Firm's Cost Curves. The curve labeled V represents the firm's _____ cost curve.

answer

C: marginal

question

(Figure: A Firm's Cost Curves) Look at the figure A Firm's Cost Curves. The curve labeled W represents the firm's _____ cost curve.

answer

B: average total

question

(Table: Output and Costs) Look at the table Output and Costs. When output is 4, total variable cost equals:

answer

A: $48

question

The long-run average total cost curve is tangent to an infinite number of short-run _____ cost curves.

answer

D: average total

question

(Figure: Long-Run and Short-Run Average Cost Curves) Look at the figure Long-Run and Short-Run Average Cost Curves. If a firm faced the long-run average total cost curve shown in the figure and it expected to produce 100,000 units of the good in the long run, the firm should build the plant associated with:

answer

B: ATC2.

question

(Figure: Long-Run and Short-Run Average Cost Curves) Look at the figure Long-Run and Short-Run Average Cost Curves. If a firm is producing at point C on the ATC2 but anticipates increasing output to 225,000 units in the long run, the firm will build a _____ plant and have _____ of scale.

answer

D: bigger; diseconomies

question

In the long run, all costs are:

answer

C: variable

question

In the long run:

answer

B: all factors are variable

question

A firm that is able to use its inputs more efficiently as it increases production in the long run best demonstrates:

answer

A: economies of scale

question

Buffalo Aircraft doubles the amount of all of the inputs it uses—the factory doubles in size and twice as many workers are hired. After this expansion, the number of aircraft produced triples. If the price of inputs is unchanged, this means that Buffalo Aircraft is operating with:

answer

B: economies of scale

question

The larger the output, the more variable input required to produce additional units. Called the _____ effect, this leads to a ______ average _____ cost.

answer

...

1 of 49

question

Jacquelyn is a student at a major state university. Which of the following is NOT an explicit cost of her attending college?

answer

C: the salary that she could have earned working full-time

question

Which of the following statements about opportunity cost is FALSE?

answer

D: Opportunity cost is synonymous with explicit cost.

question

answer

A: $67,500.

question

You own a small deli that sells sandwiches, salads, and soup. Which of the following is an implicit cost of the business?

answer

B: the job offer you did not accept at a local catering service

question

answer

A: $86,004; implicit

question

If the accounting profit for a firm is negative:

answer

B: the economic profit must be negative.

question

Profit computed without implicit costs is _____ profit.

answer

B: accounting

question

answer

C: $100,000

question

Economic profit is:

answer

A: less than accounting profit if implicit costs exist.

question

Profit is the difference between _____ and _____.

answer

C: total revenues; total costs

question

The _____ is the increase in output that is produced when a firm hires an additional worker.

answer

C: marginal product

question

The total product curve(or production function):

answer

B: will become flatter as output increases if there are diminishing returns to the
variable input.

question

An input whose quantity can be changed in the short run is a(n) _____ input.

answer

D: variable

question

An input whose quantity CANNOT be changed in the short run is:

answer

B: fixed

question

The marginal product of labor is:

answer

B: the slope of the total product of labor curve.

question

(Table: Total Product and Marginal Product) Look at the table Total Product and Marginal Product. The marginal product of the fourth worker is _____ units.

answer

A: 20

question

(Table: Total Product and Marginal Product) Look at the table Total Product and Marginal Product. Negative marginal returns begin when the _____ worker is added.

answer

D: 8th

question

You own a deli. Which of the following is most likely a fixed input at your deli?

answer

A: the dining room

question

You own a deli. Which of the following is a decision most likely to be made in the long run?

answer

C: You renovate the second floor of your building to increase the size of the dining
room.

question

The term diminishing returns/product refers to:

answer

D: a decrease in the extra output due to the use of an additional unit of a variable input
when all other inputs are held constant.

question

Diminishing returns/product to an input occur:

answer

B: when some inputs are fixed and some are variable.

question

The total cost curve for a snowmobile dealership shows how _____ cost depends on the quantity of _____.

answer

C: total; output

question

A fixed cost

answer

C: can be positive, even if the firm doesn't produce any output in the short run.

question

The sum of fixed and variable costs is _____ cost.

answer

A: total

question

Once diminishing returns have set in, as output increases, the total cost curve:

answer

A: gets steeper

question

The total cost curve(or production function) gets steeper as output increases because of:

answer

B: decreasing returns to the variable input.

question

The change in total output resulting from a one-unit increase in the quantity of an input used, holding the quantities of all other inputs constant, is:

answer

D: marginal product

question

Which of the following statements is FALSE?

answer

A: When the marginal product of labor is upward-sloping, the marginal cost curve is
upward-sloping.

question

The larger the output, the more output over which fixed cost is distributed. Called the _____ effect, this leads to a ______ average _____ cost.

answer

A: spreading; lower; fixed

question

The larger the output, the more variable input required to produce additional units. Called the _____ effect, this leads to a ______ average _____ cost.

answer

D: diminishing returns; higher; variable

question

The average total cost curve has a U shape because the ______ effect is dominant at low levels of output, and the _____ effect is dominant at high levels of output.

answer

B: spreading; diminishing returns

question

For most restaurants, the average total cost curve _____ at _____ levels of output, then _____ at _____ levels.

answer

A: falls; low; rises; high

question

The _____ cost curve is NOT affected by diminishing returns.

answer

A: average fixed

question

Austin's total fixed cost is $3,600 a month at his cupcake bakery. Austin employs 20 workers and pays each worker $600 a month. If labor is his only variable cost, what is Austin's total cost?

answer

C: $15,600

question

The marginal cost curve intersects the average variable cost curve at:

answer

A: its lowest point

question

When marginal cost is BELOW average variable cost, average variable cost must be:

answer

C: falling

question

If marginal cost is GREATER THAN average total cost:

answer

A: average total cost increasing

question

answer

B: less than; more than

question

(Figure: A Firm's Cost Curves) Look at the figure A Firm's Cost Curves. The curve labeled V represents the firm's _____ cost curve.

answer

C: marginal

question

(Figure: A Firm's Cost Curves) Look at the figure A Firm's Cost Curves. The curve labeled W represents the firm's _____ cost curve.

answer

B: average total

question

(Table: Output and Costs) Look at the table Output and Costs. When output is 4, total variable cost equals:

answer

A: $48

question

The long-run average total cost curve is tangent to an infinite number of short-run _____ cost curves.

answer

D: average total

question

answer

B: ATC2.

question

answer

D: bigger; diseconomies

question

In the long run, all costs are:

answer

C: variable

question

In the long run:

answer

B: all factors are variable

question

A firm that is able to use its inputs more efficiently as it increases production in the long run best demonstrates:

answer

A: economies of scale

question

answer

B: economies of scale

question

The larger the output, the more variable input required to produce additional units. Called the _____ effect, this leads to a ______ average _____ cost.

answer

...

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