question
Select all that apply
Which of the following explain the concept of explicit costs? (Check all that apply.)
Multiple select question.
A firm's monetary payments made for the use of resources owned by others.
A firm's monetary payments received for the use of resources owned by the firm.
A firm's monetary payments to those who supply labor services, materials, fuel, and transportation services.
A firm's monetary payments that self-employed resources could have earned in their best alternative use.
Which of the following explain the concept of explicit costs? (Check all that apply.)
Multiple select question.
A firm's monetary payments made for the use of resources owned by others.
A firm's monetary payments received for the use of resources owned by the firm.
A firm's monetary payments to those who supply labor services, materials, fuel, and transportation services.
A firm's monetary payments that self-employed resources could have earned in their best alternative use.
answer
AC
question
Question Mode
Multiple Choice Question
Accounting profit is what remains after a firm has paid its _______ costs.
Multiple choice question.
opportunity
implicit
explicit and implicit
explicit
Multiple Choice Question
Accounting profit is what remains after a firm has paid its _______ costs.
Multiple choice question.
opportunity
implicit
explicit and implicit
explicit
answer
D
question
What is the total revenue if the economic profit is $24,000 and the economic costs are $96,000?
$36,000
$72,000
$4,000
$120,000
$36,000
$72,000
$4,000
$120,000
answer
D
question
True or false: Hourly labor, raw materials, and fuel are examples of resources a firm can easily adjust.
answer
True
question
Which best describes economic costs?
Multiple choice question.
Payments that must be made to obtain a resource
Explicit plus accounting costs
The lowest value attributed to a resource
Implicit costs
Multiple choice question.
Payments that must be made to obtain a resource
Explicit plus accounting costs
The lowest value attributed to a resource
Implicit costs
answer
A
question
What is the definition of total product (TP)?
Multiple choice question.
The total additional output or added product associated with adding a unit of a variable resource to the production process
The total output of a particular good less total production costs
The total quantity, or total output, of a particular good or service produced
The total output per unit of labor
Multiple choice question.
The total additional output or added product associated with adding a unit of a variable resource to the production process
The total output of a particular good less total production costs
The total quantity, or total output, of a particular good or service produced
The total output per unit of labor
answer
C
question
__________costs are the monetary payments a firm makes to purchase resources from others.
answer
Explicit
question
Your company's total sales revenue for the month is $150,000; the costs to produce your products are $12,000 for rent, $6,000 for utilities, and $42,000 for employee wages. What is your accounting profit?
Multiple choice question.
$132,000
$102,000
$108,000
$90,000
Multiple choice question.
$132,000
$102,000
$108,000
$90,000
answer
D
question
If economic cost is $96,000 and total revenue is $120,000, what is the economic profit?
Multiple choice question.
$96,000
$216,000
$120,000
$24,000
Multiple choice question.
$96,000
$216,000
$120,000
$24,000
answer
D
question
Select all that apply
Which of the following resources can a firm easily and quickly adjust?
Multiple select question.
Fuel
Size of the factory
Hourly labor
Production-line machinery
Raw materials
Which of the following resources can a firm easily and quickly adjust?
Multiple select question.
Fuel
Size of the factory
Hourly labor
Production-line machinery
Raw materials
answer
ACE
question
What is the term for the total quantity of a specific good produced?
Multiple choice question.
Normal product
Total product
Marginal product
Average product
Multiple choice question.
Normal product
Total product
Marginal product
Average product
answer
B
question
The law of ______ returns states that as successive units of a variable resource are added to a fixed resource, beyond some point, the marginal product will decline.
Multiple choice question.
variable
fixed
marginal
diminishing
Multiple choice question.
variable
fixed
marginal
diminishing
answer
D
question
How is total cost calculated?
Multiple choice question.
By subtracting total fixed cost from total variable cost
By multiplying total fixed cost and total variable cost
By adding total fixed cost and total variable cost
By dividing total fixed cost into total variable cost
Multiple choice question.
By subtracting total fixed cost from total variable cost
By multiplying total fixed cost and total variable cost
By adding total fixed cost and total variable cost
By dividing total fixed cost into total variable cost
answer
C
question
__________ costs are part of the simple existence of a firm's plant and must be paid even when output is zero.
answer
Fixed
question
Variable costs change with the level of ___________.
answer
output
question
q
answer
...
question
Assuming technology and production techniques are fixed and cannot change, if beyond some point of production a firm experiences declining units of additional output with each additional unit of labor input, then the firm is experiencing the effects of the law of ______.
Multiple choice question.
supply and demand
diminishing marginal costs
marginal utility
diminishing returns
Multiple choice question.
supply and demand
diminishing marginal costs
marginal utility
diminishing returns
answer
D
question
Which costs do not vary with changes in output?
Multiple choice question.
Labor
Variable
Fixed
Marginal
Multiple choice question.
Labor
Variable
Fixed
Marginal
answer
C
question
What is meant by the phrase "spreading the overhead"?
Multiple choice question.
As production increases, average fixed cost declines and then increases.
As production increases, average variable cost always increases.
As production increases, average fixed cost declines.
As production increases, average fixed cost increases.
Multiple choice question.
As production increases, average fixed cost declines and then increases.
As production increases, average variable cost always increases.
As production increases, average fixed cost declines.
As production increases, average fixed cost increases.
answer
C
question
A firm's insurance premiums are generally considered _________ costs.
answer
Fixed
question
Average fixed cost equals total fixed cost divided by the ______.
Multiple choice question.
quantity of labor
marginal product of labor
amount of output
total costs
Multiple choice question.
quantity of labor
marginal product of labor
amount of output
total costs
answer
C
question
Which best characterizes variable costs?
Multiple choice question.
Costs that change with the level of output
Costs that increase when output declines and decrease when output increases
Costs that consider the average cost over a period of time
Costs that do not change with the level of output
Multiple choice question.
Costs that change with the level of output
Costs that increase when output declines and decrease when output increases
Costs that consider the average cost over a period of time
Costs that do not change with the level of output
answer
A
question
____________ cost is the sum of fixed cost and variable cost at each level of output.
answer
Total
question
What is the average fixed cost if total fixed cost is $100, total variable cost is $50, and output is 20?
Multiple choice question.
$80
$2,000
$150
$5
Multiple choice question.
$80
$2,000
$150
$5
answer
D
question
How is marginal cost (MC) calculated?
Multiple choice question.
By dividing the change in output by the change in total cost
By dividing the change in total cost by the change in output
By dividing the change in total fixed cost by the total output
By dividing the change in total fixed cost by the change in output
Multiple choice question.
By dividing the change in output by the change in total cost
By dividing the change in total cost by the change in output
By dividing the change in total fixed cost by the total output
By dividing the change in total fixed cost by the change in output
answer
B
question
What is the marginal cost when output changes from 300 to 301 units and total cost rises from $400 to $500?
Multiple choice question.
$900
$100
$0.01
$3
Multiple choice question.
$900
$100
$0.01
$3
answer
B
question
Average variable cost equals total variable cost divided by total ______.
Multiple choice question.
costs
price
revenue
output
Multiple choice question.
costs
price
revenue
output
answer
D
question
A firm's decision about what output level to produce is typically a ______ decision.
Multiple choice question.
coordinated
marginal
production
sequential
Multiple choice question.
coordinated
marginal
production
sequential
answer
B
question
Total fixed cost divided by output plus total variable cost divided by the output yields which of the following?
Multiple choice question.
Average marginal cost
Average fixed cost
Average variable cost
Average total cost
Multiple choice question.
Average marginal cost
Average fixed cost
Average variable cost
Average total cost
answer
D
question
An increase in the price of labor has no effect on which cost curve?
Multiple choice question.
Average-fixed-cost
Average-variable-cost
Marginal-cost
Average-total-cost
Multiple choice question.
Average-fixed-cost
Average-variable-cost
Marginal-cost
Average-total-cost
answer
A
question
What is the term for the extra cost of producing one more unit of output?
Multiple choice question.
Marginal cost
Variable cost
Total cost
Fixed cost
Multiple choice question.
Marginal cost
Variable cost
Total cost
Fixed cost
answer
A
question
If total cost rises from $300 to $700 when one additional unit of output is produced, what is the marginal cost?
Multiple choice question.
$400
$40
$1,000
$700
Multiple choice question.
$400
$40
$1,000
$700
answer
A
question
er what period of time can an industry and firms in that industry adjust all resource inputs used?
Multiple choice question.
Both the long run and the short run
The short run
Neither the long run nor the short run.
The long run
Multiple choice question.
Both the long run and the short run
The short run
Neither the long run nor the short run.
The long run
answer
D
question
A firm's decision whether to produce a few more or a few less units of output is a decision based on which of the following?
Multiple choice question.
Average-cost data
Fixed-cost data
Marginal data
Total-cost data
Multiple choice question.
Average-cost data
Fixed-cost data
Marginal data
Total-cost data
answer
C
question
How is marginal cost (MC) calculated?
Multiple choice question.
By dividing the change in output by the change in total cost
By dividing the change in total fixed cost by the total output
By dividing the change in total cost by the change in output
By dividing the change in total fixed cost by the change in output
Multiple choice question.
By dividing the change in output by the change in total cost
By dividing the change in total fixed cost by the total output
By dividing the change in total cost by the change in output
By dividing the change in total fixed cost by the change in output
answer
C
question
A planning curve is another term for which of the following?
Multiple choice question.
Long run average-marginal-cost curve
Long run average-fixed-cost curve
Long run average-total-cost curve
Long run average-variable-cost curve
Multiple choice question.
Long run average-marginal-cost curve
Long run average-fixed-cost curve
Long run average-total-cost curve
Long run average-variable-cost curve
answer
C
question
In the ______ run, firms are able to adjust all resources.
answer
long
question
Select all that apply
The U-shape of the long-run average-total-cost curve results from which of the following?
Multiple select question.
Diseconomies of scale
Economies of scale
Fixed labor costs
Rising resource prices
The U-shape of the long-run average-total-cost curve results from which of the following?
Multiple select question.
Diseconomies of scale
Economies of scale
Fixed labor costs
Rising resource prices
answer
AB
question
What does the long-run average-total-cost curve show?
Multiple choice question.
The sum total of all of the short-run average-total-cost curves
The lowest minimum short-run average-total-cost curve at which a firm must produce to make a profit
The maximum level of output possible in the short run at all plant sizes
The lowest average total cost at which any chosen output level can be produced after the firm has had time to make adjustments in plant size
Multiple choice question.
The sum total of all of the short-run average-total-cost curves
The lowest minimum short-run average-total-cost curve at which a firm must produce to make a profit
The maximum level of output possible in the short run at all plant sizes
The lowest average total cost at which any chosen output level can be produced after the firm has had time to make adjustments in plant size
answer
D
question
Over what period of time can an industry and firms in that industry adjust all resource inputs used?
Multiple choice question.
The short run
The long run
Neither the long run nor the short run.
Both the long run and the short run
Multiple choice question.
The short run
The long run
Neither the long run nor the short run.
Both the long run and the short run
answer
B
question
What is another term for economies of scale?
Multiple choice question.
Economies of mass production
Diseconomies of scale
Diseconomies of mass production
Economies of output
Multiple choice question.
Economies of mass production
Diseconomies of scale
Diseconomies of mass production
Economies of output
answer
A
question
Why does the law of diminishing returns not account for the U-shape of the long-run average-total-cost curve?
Multiple choice question.
In the long run all resources and inputs are fixed.
In the long run all resources and inputs are variable.
In the short run all resources and inputs are fixed.
In the short run all resources and inputs are variable.
Multiple choice question.
In the long run all resources and inputs are fixed.
In the long run all resources and inputs are variable.
In the short run all resources and inputs are fixed.
In the short run all resources and inputs are variable.
answer
B
question
Greater labor specialization has which of the following effects?
Multiple choice question.
It increases production costs.
It allows workers to focus on more tasks rather than fewer.
It eliminates the loss of time that occurs whenever a worker shifts from one task to another.
It permits workers to specialize in more varied areas, so they do not get bored.
Multiple choice question.
It increases production costs.
It allows workers to focus on more tasks rather than fewer.
It eliminates the loss of time that occurs whenever a worker shifts from one task to another.
It permits workers to specialize in more varied areas, so they do not get bored.
answer
C
question
Learning by doing contributes to a firm's ______.
Multiple choice question.
diseconomies of scale
fixed costs
economies of scale
constant returns to scale
Multiple choice question.
diseconomies of scale
fixed costs
economies of scale
constant returns to scale
answer
C
question
Which of the following sections of a long-run average total cost curve depicts constant returns to scale?
Multiple choice question.
The flat section
The upward-sloping section
The downward-sloping section
The beginning high point of the curve
Multiple choice question.
The flat section
The upward-sloping section
The downward-sloping section
The beginning high point of the curve
answer
A
question
Select all that apply
Which of the following are examples of fixed costs?
Multiple select question.
Interest on a firm's debts
Labor
Rental payments
Transportation
Which of the following are examples of fixed costs?
Multiple select question.
Interest on a firm's debts
Labor
Rental payments
Transportation
answer
AC
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