chapter 14 eco 101 questions

What is the average fixed cost of producing 5 units of output? a. $4 b. $5 c. $40 d. $44

a. $4

Hakeem gives piano lessons for $15 per hour. He also grows flowers, which he arranges and sells at the local farmer's market. One day he spends 4 hours planting $50 worth of seeds in his garden. Once the seeds have grown into flowers, hecan sell them for $150 at the farmer's market. Hakeem's accounting profits are a. $100, and his economic profits are $40. b. $100, and his economic profits are $15. c. $40, and his economic profits are $100. d. $15, and his economic profits are $140

a. 100 and his economic profits are 40

Which of the following expressions is correct? a. accounting profit = economic profit + implicit costs b. accounting profit = total revenue − implicit costs c. economic profit = accounting profit + explicit costs d. economic profit = total revenue − implicit costs

a. accounting profit= economic profit + implicit costs

The average fixed cost curve a. always declines with increased levels of output. b. always rises with increased levels of output. c. declines as long as it is above marginal cost. d. declines as long as it is below marginal cos

a. always declines with increased levels of output

Which firm's long-run marginal cost decreases as output increases? a. Firm 1 b. Firm 2 c. Firm 3 d. Firm 4

a. firm 1

Which of the following statements is correct? a. Assuming that explicit costs are positive, economic profit is greater than accounting profit. b. Assuming that implicit costs are positive, accounting profit is greater than economic profit. c. Assuming that explicit costs are positive, accounting profit is equal to economic profit. d. Assuming that implicit costs are positive, economic profit is positive

b. assuming that implicit costs are positive accounting profit is greater than economic profit

Why doesn't the total cost curve begin at the origin (the point 0,0)? a. Because variable costs are positive when output is zero b. Because fixed costs are positive when output is zero c. Because the firm is producing at the efficient scaled. d. Because the firm is maximizing profits

b. because fixed costs are positive when output is zero

What is the average variable cost of producing 5 units of output? a. $4 b. $5 c. $40 d. $44

c. $40

Each worker at the Wooden Chair Factory costs $12 per hour. The cost of each machine is $20per day regardless of the number of chairs produced. What is the total daily cost of producing at a rate of 55 chairs perhour if the factory operates 8 hours per day? a. $480 b. $576 c. $520 d. $616

c. $520

The average total cost of producing 240 units is a. $0.13 .b. $0.19. c. $0.32. d. $0.80

c. 0.32

Kelly has decided to start his own business giving sailing lessons. To purchase equipment for the business, Kellywithdrew $1,000 from his savings account, which was earning 3% interest, and borrowed an additional $2,000 from thebank at an interest rate of 7%. What is Kelly's annual opportunity cost of the financial capital that has been invested in thebusiness? a. $30 b. $140 c. $170 d. $300

c. 170

The marginal product of the second worker is a. 90 units. b. 85 units. c. 80 units. d. 20 units

c. 80 units

The efficient scale of production occurs at which quantity? a. A b. B c. C d. D

c. D

Which of the following is an example of an implicit cost? a. Interest paid on the firm's debt b. Rent paid by the firm to lease office space c. The owner of a firm forgoing an opportunity to earn a large salary working for a Wall Street brokerage firm d. Wages paid to workers

c. the owner of a firm forgoing an opportunity to earn a large salary working for a Wall Street brokerage firm

Korie wants to start her own business making custom furniture. She can purchase a factory that costs $400,000. Koriecurrently has $500,000 in the bank earning 3 percent interest per year. Suppose Korie purchases the factory using $200,000 of her own money and $200,000borrowed from a bank at an interest rate of 6 percent. What is Korie's annual opportunity cost of purchasing the factory? a. $3,000 b. $6,000 c. $15,000 d. $18,000

d. $18,000

Omar's Car Wash has average variable costs of $3 and average fixed costs of $4 when it produces 200 units of output(car washes). The firm's total cost is a. $600. b. $800. c. $200. d. $1,400

d. 1,400

Iyana is a florist. Iyana can arrange 26 bouquets per day. She is considering hiring her husband James to work for her.Together Iyana and James can arrange 39 bouquets per day. What is James's marginal product? a. 65 bouquets b. 39 bouquets c. 28 bouquets d. 13 bouquets

d. 13 bouquets

The Wooden Chair Factory experiences diminishing marginal product of labor with the addition of which worker? a. The third worker b. The fourth worker c. The fifth worker d. The sixth worker

d. the sixth worker

If a firm produces nothing, which of the following costs will be zero? . a. Total cost b. Fixed cost c. Opportunity cost d. Variable cost

d. variable cost

Total revenue equals what?

price x quanity