Micro ch 8 - Assignment Essays

question

Nora produces 5 dolls per day. Her total fixed costs per day are $200, and her average total costs are $70 per doll.
Nora's total costs per day are ________.

answer

$350

question

Pablo owns a record store. His total costs are $1.2 million per year, his variable costs are $750,000, and his fixed costs are $450,000 per year. Last year, Pablo sold 1,200 records. If Pablo sells 1,250 records this year (50 more than last year) and his total costs increase to $1.28 million, we know that the

answer

marginal costs of those 50 records is $80,000

question

Which of the following is an example of a cost that a manufacturing firm would be unlikely to pay in the short run but more likely to pay in the long run?

answer

an increase in the size of its factory

question

If the firm expanded its scale of production and found that its average costs did not change, which of the curves would reflect this situation?

answer

LRATC2

question

A firm expands its scale of production and finds that its long-run average total cost curve looks like LRATC1. It might look this way because the firm

answer

is able to negotiate lower prices with its suppliers

question

Fatima owns a car shop that repairs, among other things, spoilers. She currently has 6 employees; with 6 employees, her repair shop can repair 9 spoilers per day. If she hired a seventh employee, she'd be able to repair 11 spoilers per day. Therefore, the marginal product of the seventh employee is ________ car spoilers.

answer

question

If workers are unable to specialize and therefore unable to become more productive as more labor is hired, the amount of total output produced

answer

increases at a decreasing rate

question

Economic profit is equal to

answer

total revenue minus implicit costs and explicit costs.

question

A firm's short-run cost curves show us

answer

the lowest-cost level of output.

question

A firm's inputs are also known as its

answer

factors of production

question

Which of the following is true about explicit costs?

answer

they are tangible out-of-pocket expenses

question

Assume that a firm hires an additional employee. If the marginal product for that employee is greater than for the previous employee hired, it must be that

answer

there are gains from specialization.

question

A firm has a certain amount of capital and land. As it hires more labor, each worker is able to

answer

specialize

question

If a firm experiences diminishing marginal product of labor, its marginal cost of labor is

answer

increasing

question

If the marginal product of an input is falling, then what must be true?

answer

marginal cost must be rising

question

A firm's production function is similar to a recipe used to make a cake in the sense that the production function shows us the combination of ________ used to produce ________.

answer

inputs; output

question

If a firm generates $251,000 in revenue, earns $97,000 in economic profit, and its implicit costs are $83,000, how much are its explicit costs?

answer

$71,000

question

When the average variable cost curve is downward sloping, what must be true about the marginal cost curve?

answer

it is below the average variable cost curve

question

Another term for factors of production is

answer

inputs

question

If a firm has total costs of $535,000 and its implicit costs are $165,000, how much are its explicit costs?

answer

$370,000

question

Which of the following is a question that a firm must answer in the long run but not in the short run?

answer

what is the optimal amount of capital to employ

question

Economists assume that the cost of ________ is fixed in the short run.

answer

capital

question

When output is 100 units, a firm's total fixed cost is $500. What will this firm's total fixed cost be if output doubles to 200 units?

answer

$500

question

Kian owns a bike store. His total costs are $800,000 per year, and his variable costs are $600,000. Last year, Kian sold 4,000 bikes.
Kian's average total cost was ________ per bike.

answer

$200

question

When the average total cost curve is upward sloping, what must be true about the marginal cost curve?

answer

It is above the average total cost curve

question

Which of the following statements is FALSE?

answer

An explicit cost is a nonmonetary opportunity cost.

question

Juan owns an antique shop. His total costs are $1.2 million per year, and his fixed costs are $500,000 per year. This means that his variable costs are ________.

answer

$700,000

question

If a firm hires another worker and her marginal product of labor is negative, we know that the firm's total output is

answer

decreasing

question

If a firm hires another worker and her marginal product of labor is positive, we know that the firm's total output is

answer

increasing

question

Igor owns a movie theater. His total costs are $150,000 per year, and his fixed costs are $80,000. This means that his variable costs are ________.

answer

$70,000

question

In the short run, average total costs and average variable costs converge as output increases because

answer

average fixed costs continually decrease

question

Which of the following is the best example of a variable cost in the short run?

answer

wages for employees

question

Ingrid owns a lamp store. Her total costs are $225,000 per year, and her fixed costs are $175,000 per year. This means that her variable costs are ________.

answer

$50,000

question

The marginal product of labor

answer

is the change in total output due to adding one unit of labor.

question

Annabelle owns an Italian ice shop. If she decides to expand the size of her shop so that she can sell more Italian ices, how will she know if she is experiencing economies of scale in the long run?

answer

Her long-run average cost of selling each Italian ice decreases.

question

If a firm has total economic costs of $492,000 and implicit costs of $206,000, what are its explicit costs?

answer

$286,000

question

If a firm's long-run average total costs increase as it increases its scale of production, the firm is experiencing

answer

diseconomies of scale

question

If all workers are able to specialize and become more productive as more labor is hired, the amount of total output produced

answer

increases at an increasing rate

question

As a firm hires more workers, its marginal product of labor increases only if
Incorrect answer:

answer

employees are assigned specialized tasks.

question

Implicit costs can be difficult to measure because

answer

business owners cannot always observe them directly.

question

As a firm hires more labor and each worker is able to specialize, what happens to workers' marginal productivity?

answer

It increases at first, then decreases.

question

Geoffrey owns a wedding dress store. If he increases the size of his store and experiences constant returns to scale as a result, his long-run average total cost curve should be

answer

horizontal

question

By looking at the full set of short-run cost curves for a firm, we can determine

answer

the cost-minimizing level of output

question

Total revenue minus total cost is equal to

answer

profit

question

The full set of short-run cost curves for a firm tells us

answer

the cost-minimizing level of output

question

Implicit costs are

answer

also opportunity costs

question

If a firm experiences diseconomies of scale, its long-run average cost curve is

answer

upward sloping

question

Which of the following costs is fixed in the short run?

answer

capital

question

If a firm experiences productivity gains from employee specialization, its marginal cost of labor is

answer

decreasing

question

If a firm generates $380,000 in revenue, earns $130,000 in economic profit, and has explicit costs of $190,000, how much are its implicit costs?

answer

$60,000

question

Selene owns a craft store. Her total costs are $1.2 million per year, and her variable costs are $800,000 per year. This means that her fixed costs are ________.

answer

$400,000

question

When the average total cost curve is downward sloping, what must be true about the marginal cost curve?

answer

it is below the average total cost curve

question

Timothy owns a landscaping company. If he increases the size of his company and experiences constant returns to scale as a result, his long-run average total cost curve should be

answer

horizontal

question

It is important for a firm to know its minimum efficient scale of production because that is where

answer

long-run average total costs are minimized

question

As a firm hires more workers, its marginal product of labor increases only if

answer

employees are assigned specialized tasks

question

If there are gains from specialization in a workplace, hiring another employee means that the marginal product of labor will

answer

increase

question

If the marginal product of labor is increasing, and labor is the only significant input cost, then the marginal cost of output must be

answer

decreasing

question

If the marginal product of labor for a firm decreases as more workers are hired, we know that

answer

the gains from specialization are exhausted

question

The three primary production inputs are

answer

land, labor, and capital

question

Nora produces 5 dolls per day. Her total fixed costs per day are $200, and her average total costs are $70 per doll.
Nora's average variable costs are ________ per doll.

answer

$30

question

When the average total cost curve is at its minimum, we know that the

answer

marginal cost curve intersects the average total cost curve.

1 of 61

question

Nora produces 5 dolls per day. Her total fixed costs per day are $200, and her average total costs are $70 per doll.
Nora's total costs per day are ________.

answer

$350

question

answer

marginal costs of those 50 records is $80,000

question

Which of the following is an example of a cost that a manufacturing firm would be unlikely to pay in the short run but more likely to pay in the long run?

answer

an increase in the size of its factory

question

If the firm expanded its scale of production and found that its average costs did not change, which of the curves would reflect this situation?

answer

LRATC2

question

A firm expands its scale of production and finds that its long-run average total cost curve looks like LRATC1. It might look this way because the firm

answer

is able to negotiate lower prices with its suppliers

question

answer

question

If workers are unable to specialize and therefore unable to become more productive as more labor is hired, the amount of total output produced

answer

increases at a decreasing rate

question

Economic profit is equal to

answer

total revenue minus implicit costs and explicit costs.

question

A firm's short-run cost curves show us

answer

the lowest-cost level of output.

question

A firm's inputs are also known as its

answer

factors of production

question

Which of the following is true about explicit costs?

answer

they are tangible out-of-pocket expenses

question

Assume that a firm hires an additional employee. If the marginal product for that employee is greater than for the previous employee hired, it must be that

answer

there are gains from specialization.

question

A firm has a certain amount of capital and land. As it hires more labor, each worker is able to

answer

specialize

question

If a firm experiences diminishing marginal product of labor, its marginal cost of labor is

answer

increasing

question

If the marginal product of an input is falling, then what must be true?

answer

marginal cost must be rising

question

A firm's production function is similar to a recipe used to make a cake in the sense that the production function shows us the combination of ________ used to produce ________.

answer

inputs; output

question

If a firm generates $251,000 in revenue, earns $97,000 in economic profit, and its implicit costs are $83,000, how much are its explicit costs?

answer

$71,000

question

When the average variable cost curve is downward sloping, what must be true about the marginal cost curve?

answer

it is below the average variable cost curve

question

Another term for factors of production is

answer

inputs

question

If a firm has total costs of $535,000 and its implicit costs are $165,000, how much are its explicit costs?

answer

$370,000

question

Which of the following is a question that a firm must answer in the long run but not in the short run?

answer

what is the optimal amount of capital to employ

question

Economists assume that the cost of ________ is fixed in the short run.

answer

capital

question

When output is 100 units, a firm's total fixed cost is $500. What will this firm's total fixed cost be if output doubles to 200 units?

answer

$500

question

Kian owns a bike store. His total costs are $800,000 per year, and his variable costs are $600,000. Last year, Kian sold 4,000 bikes.
Kian's average total cost was ________ per bike.

answer

$200

question

When the average total cost curve is upward sloping, what must be true about the marginal cost curve?

answer

It is above the average total cost curve

question

Which of the following statements is FALSE?

answer

An explicit cost is a nonmonetary opportunity cost.

question

Juan owns an antique shop. His total costs are $1.2 million per year, and his fixed costs are $500,000 per year. This means that his variable costs are ________.

answer

$700,000

question

If a firm hires another worker and her marginal product of labor is negative, we know that the firm's total output is

answer

decreasing

question

If a firm hires another worker and her marginal product of labor is positive, we know that the firm's total output is

answer

increasing

question

Igor owns a movie theater. His total costs are $150,000 per year, and his fixed costs are $80,000. This means that his variable costs are ________.

answer

$70,000

question

In the short run, average total costs and average variable costs converge as output increases because

answer

average fixed costs continually decrease

question

Which of the following is the best example of a variable cost in the short run?

answer

wages for employees

question

Ingrid owns a lamp store. Her total costs are $225,000 per year, and her fixed costs are $175,000 per year. This means that her variable costs are ________.

answer

$50,000

question

The marginal product of labor

answer

is the change in total output due to adding one unit of labor.

question

Annabelle owns an Italian ice shop. If she decides to expand the size of her shop so that she can sell more Italian ices, how will she know if she is experiencing economies of scale in the long run?

answer

Her long-run average cost of selling each Italian ice decreases.

question

If a firm has total economic costs of $492,000 and implicit costs of $206,000, what are its explicit costs?

answer

$286,000

question

If a firm's long-run average total costs increase as it increases its scale of production, the firm is experiencing

answer

diseconomies of scale

question

If all workers are able to specialize and become more productive as more labor is hired, the amount of total output produced

answer

increases at an increasing rate

question

As a firm hires more workers, its marginal product of labor increases only if
Incorrect answer:

answer

employees are assigned specialized tasks.

question

Implicit costs can be difficult to measure because

answer

business owners cannot always observe them directly.

question

As a firm hires more labor and each worker is able to specialize, what happens to workers' marginal productivity?

answer

It increases at first, then decreases.

question

Geoffrey owns a wedding dress store. If he increases the size of his store and experiences constant returns to scale as a result, his long-run average total cost curve should be

answer

horizontal

question

By looking at the full set of short-run cost curves for a firm, we can determine

answer

the cost-minimizing level of output

question

Total revenue minus total cost is equal to

answer

profit

question

The full set of short-run cost curves for a firm tells us

answer

the cost-minimizing level of output

question

Implicit costs are

answer

also opportunity costs

question

If a firm experiences diseconomies of scale, its long-run average cost curve is

answer

upward sloping

question

Which of the following costs is fixed in the short run?

answer

capital

question

If a firm experiences productivity gains from employee specialization, its marginal cost of labor is

answer

decreasing

question

If a firm generates $380,000 in revenue, earns $130,000 in economic profit, and has explicit costs of $190,000, how much are its implicit costs?

answer

$60,000

question

Selene owns a craft store. Her total costs are $1.2 million per year, and her variable costs are $800,000 per year. This means that her fixed costs are ________.

answer

$400,000

question

When the average total cost curve is downward sloping, what must be true about the marginal cost curve?

answer

it is below the average total cost curve

question

Timothy owns a landscaping company. If he increases the size of his company and experiences constant returns to scale as a result, his long-run average total cost curve should be

answer

horizontal

question

It is important for a firm to know its minimum efficient scale of production because that is where

answer

long-run average total costs are minimized

question

As a firm hires more workers, its marginal product of labor increases only if

answer

employees are assigned specialized tasks

question

If there are gains from specialization in a workplace, hiring another employee means that the marginal product of labor will

answer

increase

question

If the marginal product of labor is increasing, and labor is the only significant input cost, then the marginal cost of output must be

answer

decreasing

question

If the marginal product of labor for a firm decreases as more workers are hired, we know that

answer

the gains from specialization are exhausted

question

The three primary production inputs are

answer

land, labor, and capital

question

Nora produces 5 dolls per day. Her total fixed costs per day are $200, and her average total costs are $70 per doll.
Nora's average variable costs are ________ per doll.

answer

$30

question

When the average total cost curve is at its minimum, we know that the

answer

marginal cost curve intersects the average total cost curve.

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