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Exam 13: The Costs of Production.

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Question 71

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Diminishing marginal product exists when the total cost curve becomes horizontal as outputs increases.

A) True
B) False

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Question 72

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Diseconomies of scale often arise because higher production levels allow specialization among workers.

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B) False

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Question 73

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Table 13-11 Teacher's Helper is a small company that has a subcontract to produce instructional materials for disabled children in public school districts. The owner rents several small rooms in an office building in the suburbs for $600 a month and has leased computer equipment that costs $480 a month. -Refer to Table 13-11.What is the average variable cost for the month if 6 instructional modules are produced?

Scenario 13-7 Wanda owns a lemonade stand. She produces lemonade using five inputs: water, sugar, lemons, paper cups, and labor. Her costs per glass are as follows: $0.01 for water, $0.02 for sugar, $0.03 for lemons, $0.02 for cups, and $0.10 for the opportunity cost of her labor. She can sell 300 glasses for $0.50 each. -Refer to Scenario 13-7.What are Wanda's total economic profits?

Katherine gives piano lessons for $20 per hour.She also grows flowers,which she arranges and sells at the local farmer's market.One day she spends 5 hours planting $50 worth of seeds in her garden.Once the seeds have grown into flowers,she can sell them for $150 at the farmer's market.Katherine's accounting profits are

Thirsty Thelma owns and operates a small lemonade stand.When Thelma is producing a low quantity of lemonade she has few workers and her equipment is not being fully utilized.Because she can easily put her idle resources to use,

Which of the following can be added to profit to obtain total revenue?

If a firm produces nothing,which of the following costs will be zero?

A firm that wants to achieve economies of scale could do so by

Implicit costs are costs that do not require an outlay of money by the firm.

An entrepreneur's motivation to start a business arises from

Scenario 13-15 Farmer Jack is a watermelon farmer. If Jack plants no seeds on his farm, he gets no harvest. If he plants 1 bag of seeds, he gets 30 watermelons. If he plants 2 bags of seeds, he gets 50 watermelons. If he plants 3 bags of seeds he gets 60 watermelons. A bag of seeds costs $100, and the costs of seeds are his only costs. -Refer to Scenario 13-15.What is the shape of Farmer Jack's marginal cost curve?

Table 13-16 Listed in the table are the long-run total costs for three different firms. -Refer to Table 13-16.Firm A is experiencing constant returns to scale.

Table 13-7 The Flying Elvis Copter Rides -Refer to Table 13-7.What is the value of M?

Which of the following expressions is correct?

Scenario 13-9 Jessica makes photo frames. She spends $5 on the materials for each photo frame. She can create one photo frame in an hour. She earns $10 per hour at a part-time job at the local coffee shop. She can sell a photo frame for $30 each. -Refer to Scenario 13-9.An accountant would calculate the total profit for one photo frame to be

Economists and accountants usually disagree on the inclusion of implicit costs into the cost analysis of a firm.

Figure 13-7 -Refer to Figure 13-7.Which of the figures represents the marginal cost curve for a typical firm?

Economists and accountants both include forgone income as a cost to a small business owner.

Table 13-12 Betty's Bakery -Refer to Table 13-12.What is the fixed cost of production at Betty's Bakery?