Unit 5 - Assignment Essays

question

Which of the following is not true in the short run?

answer

TC/Q = TVC/Q

question

When output is 500 units, average variable cost (AVC) is equal to_____.

answer

0.80

question

Betty left her $50,000 per year job in advertising to start a lawn service and be her own boss. In her first year, Betty received $75,000 in payments from customers and paid $5,000 for equipment and supplies. Betty's economic profit in her first year is:

answer

20,000

question

In the long run:

answer

all inputs are variable, and average costs may decrease, remain constant, or increase as the scale of production changes.

question

The minimum efficient scale for this firm is:

answer

50,000 units of output.

question

Suppose the total cost of producing in the short run for a CD producer is $500,000 when 2,000,000 CDs are produced. Then:

answer

average total cost is 25 cents per CD, and average fixed cost is unknown given the available information.

question

Cost that must be paid in the short run even when no output is produced are called:

answer

total fixed costs (TFC)

question

Which of the following best represents a fixed input?

answer

An oil exploration rig

question

The average total cost of producing a bell is $10 when Jenny's Jingles produces 100 bells. Total cost when zero bells are produced is $250. Total fixed cost for Jenny's Jingles is:

answer

250

question

A firm deciding how many workers it should hire to manufacture kitchen countertops using existing equipment is making a:

answer

short-run decision.

question

The long-run average cost curve (LRAC) is U-shaped due to:

answer

the existence of economies and dieconomies of scale.

question

The long run is:

answer

that period of time in which all factors of production are variable.

question

The marginal product of the 5th worker is:

answer

8 units of output.

question

Marginal cost (MC) is:

answer

all of the above

question

If the total cost of producing 2 units of output is $100 and $80 of the $100 goes to pay variable factors of production, then:

answer

average total cost is $50 when 2 units of output are produced.

question

Costs that change as the level of output changes are called:

answer

variable costs.

question

Suppose through 40 games Dirk Nowitzki of the Dallas Mavericks scored, on average, 25 points per game. If in his 41st game, Dirk scored 28 points, we know that his:

answer

marginal score is greater than his average core, and his season average will rise.

question

The marginal cost of increasing output from 500 units to 600 units is _____ per unit.

answer

$1.50

question

Average product of Hal's Holiday Hats when 3 laborers are employed is _____ hats per day.

answer

question

If this firm does not produce, it:

answer

must pay fixed costs of $80.

question

Average cost for the firm at a scale of production of 400,000 units is_____.

answer

$2.50

question

If a firm is experiencing disconomies of scale, doubling inputs will:

answer

increase, but less than double, output.

question

The total cost of producing 2 units of output is:

answer

$210

question

The opportunity cost of the time an owner puts into a business:

answer

is the income foregone by not working in the best alternative job.

question

When output is 200 units, average fixed cost (AFC) = _____ and average variable cost (AVC) = _____.

answer

$0.35; $0.35

question

$0.35; $0.35

answer

each worker repairs, on average, 4 T.V. sets per day when nine workers are hired.

question

The average total cost of producing a bell is $10 when Jenny's Jingles produces 100 bells. Total cost when zero bells are produced is $250. The total cost of Jenny's Jingles of producing 100 bells is_____.

answer

$1,000

question

If the marginal product of the fourth worker is 15 units of output, then the quantity of hats produced per day when four workers are employed is equal to _____.

answer

question

If marginal cost is greater than average total cost, then:

answer

average total cost is rising.

question

Accounting profit is equal to:

answer

total revenue minus total explicit cost

question

In the short run, average variable cost can be obtained by each of the following except:

answer

ATC - MC.

question

The marginal product of the second laborer is _____ hats per day.

answer

question

Which of the following is true for a firm in the short run?

answer

All of the above are true

question

When 4 workers are hired, average product is _____.

answer

question

Suppose ABC Corporation sold 2,000 units of output at a price of$2 per unit. If ABC Corporation's explicit cost to produce the 2,000 units is $1,500 and its implicit cost to produce the 2,000 units is $2,000, then ABC Corp. has total revenue of _____ and an economic profit of _____.

answer

$4,000; $500

question

The typical pattern is for a firm to experience:

answer

economies of scale initially, followed by constant returns to scale until reaching a production level high enough for diseconomies of scale to kick in.

question

This firm experiences economies of scale:

answer

as output is increased to 50,000 units.

question

Diminishing marginal product (or "diminishing returns") sets in with the _____ unit of labor hired.

answer

third

question

Diseconomies of scale may occur because:

answer

communication and monitoring problems reduce productivity.

question

If, in the short run, producing 100 units of a good results in a total cost to the producer of $5,000, while producing zero units costs the producer $2,000, then all of the following are true except:

answer

AFC = $10 when Q = 100.

question

Average variable cost when 5 units of output are produced is:

answer

$74.

question

Firms encounter diminishing marginal product (diminishing returns) in the short run because:

answer

at least one input is fixed.

question

Moving from scale #1 to scale #2 will generate for the firm:

answer

economies of scale since long-run average costs fall.

question

The downward-sloping portion of a LRAC curve implies:

answer

economies of scale exist over that range of output.

question

answer

$4,000; $2,500

question

In the short run, firms:

answer

have at least one fixed input.

question

Economic profit is equal to:

answer

total revenue minus total economic cost.

question

If total output is 40 units when 4 workers are employed and 48 units when 5 workers are employed, then:

answer

all of the above are true.

question

Firms encounter diminishing returns in the short run because:

answer

at least one input is fixed in the short run.

question

answer

$4,000; $2,500

1 of 50

question

Which of the following is not true in the short run?

answer

TC/Q = TVC/Q

question

When output is 500 units, average variable cost (AVC) is equal to_____.

answer

0.80

question

answer

20,000

question

In the long run:

answer

all inputs are variable, and average costs may decrease, remain constant, or increase as the scale of production changes.

question

The minimum efficient scale for this firm is:

answer

50,000 units of output.

question

Suppose the total cost of producing in the short run for a CD producer is $500,000 when 2,000,000 CDs are produced. Then:

answer

average total cost is 25 cents per CD, and average fixed cost is unknown given the available information.

question

Cost that must be paid in the short run even when no output is produced are called:

answer

total fixed costs (TFC)

question

Which of the following best represents a fixed input?

answer

An oil exploration rig

question

The average total cost of producing a bell is $10 when Jenny's Jingles produces 100 bells. Total cost when zero bells are produced is $250. Total fixed cost for Jenny's Jingles is:

answer

250

question

A firm deciding how many workers it should hire to manufacture kitchen countertops using existing equipment is making a:

answer

short-run decision.

question

The long-run average cost curve (LRAC) is U-shaped due to:

answer

the existence of economies and dieconomies of scale.

question

The long run is:

answer

that period of time in which all factors of production are variable.

question

The marginal product of the 5th worker is:

answer

8 units of output.

question

Marginal cost (MC) is:

answer

all of the above

question

If the total cost of producing 2 units of output is $100 and $80 of the $100 goes to pay variable factors of production, then:

answer

average total cost is $50 when 2 units of output are produced.

question

Costs that change as the level of output changes are called:

answer

variable costs.

question

Suppose through 40 games Dirk Nowitzki of the Dallas Mavericks scored, on average, 25 points per game. If in his 41st game, Dirk scored 28 points, we know that his:

answer

marginal score is greater than his average core, and his season average will rise.

question

The marginal cost of increasing output from 500 units to 600 units is _____ per unit.

answer

$1.50

question

Average product of Hal's Holiday Hats when 3 laborers are employed is _____ hats per day.

answer

question

If this firm does not produce, it:

answer

must pay fixed costs of $80.

question

Average cost for the firm at a scale of production of 400,000 units is_____.

answer

$2.50

question

If a firm is experiencing disconomies of scale, doubling inputs will:

answer

increase, but less than double, output.

question

The total cost of producing 2 units of output is:

answer

$210

question

The opportunity cost of the time an owner puts into a business:

answer

is the income foregone by not working in the best alternative job.

question

When output is 200 units, average fixed cost (AFC) = _____ and average variable cost (AVC) = _____.

answer

$0.35; $0.35

question

$0.35; $0.35

answer

each worker repairs, on average, 4 T.V. sets per day when nine workers are hired.

question

answer

$1,000

question

If the marginal product of the fourth worker is 15 units of output, then the quantity of hats produced per day when four workers are employed is equal to _____.

answer

question

If marginal cost is greater than average total cost, then:

answer

average total cost is rising.

question

Accounting profit is equal to:

answer

total revenue minus total explicit cost

question

In the short run, average variable cost can be obtained by each of the following except:

answer

ATC - MC.

question

The marginal product of the second laborer is _____ hats per day.

answer

question

Which of the following is true for a firm in the short run?

answer

All of the above are true

question

When 4 workers are hired, average product is _____.

answer

question

answer

$4,000; $500

question

The typical pattern is for a firm to experience:

answer

economies of scale initially, followed by constant returns to scale until reaching a production level high enough for diseconomies of scale to kick in.

question

This firm experiences economies of scale:

answer

as output is increased to 50,000 units.

question

Diminishing marginal product (or "diminishing returns") sets in with the _____ unit of labor hired.

answer

third

question

Diseconomies of scale may occur because:

answer

communication and monitoring problems reduce productivity.

question

If, in the short run, producing 100 units of a good results in a total cost to the producer of $5,000, while producing zero units costs the producer $2,000, then all of the following are true except:

answer

AFC = $10 when Q = 100.

question

Average variable cost when 5 units of output are produced is:

answer

$74.

question

Firms encounter diminishing marginal product (diminishing returns) in the short run because:

answer

at least one input is fixed.

question

Moving from scale #1 to scale #2 will generate for the firm:

answer

economies of scale since long-run average costs fall.

question

The downward-sloping portion of a LRAC curve implies:

answer

economies of scale exist over that range of output.

question

answer

$4,000; $2,500

question

In the short run, firms:

answer

have at least one fixed input.

question

Economic profit is equal to:

answer

total revenue minus total economic cost.

question

If total output is 40 units when 4 workers are employed and 48 units when 5 workers are employed, then:

answer

all of the above are true.

question

Firms encounter diminishing returns in the short run because:

answer

at least one input is fixed in the short run.

question

answer

$4,000; $2,500

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