online quiz 7

Output Total Cost 0 $40 10 $60 20 $90 30 $130 40 $180 50 $240 What is the total fixed cost for this firm?

$40

Marginal cost equals (i) change in total cost divided by change in quantity produced. (ii) change in variable cost divided by change in quantity produced. (iii) the average fixed cost of the current unit.

(i) and (ii) only

Pete owns a shoe-shine business. Which of the following costs would be implicit costs? (i) shoe polish (ii) rent on the shoe stand (iii) wages Pete could earn delivering newspapers (iv) interest that Pete's money was earning before he spent his savings to set up the shoe-shine business

(iii) and (iv) only

For a large firm that produces and sells automobiles, which of the following costs would be a variable cost?

- the unemployment insurance premium that the firm pays to the state of Missouri that is calculated based on the number of worker-hours that the firm uses - the cost of the steel that is used in producing automobiles - the cost of the electricity of running the machines on the factory floor

Listed in the table are the long-run total costs for three different firms. Quantity- 1 2 3 4 5 Firm A -100 100 100 100 100 Firm B -100 200 300 400 500 Firm C -100 300 600 1,000 1,500 Which firm is experiencing diseconomies of scale?

Firm C only

Which of the following statements is correct?

If average total cost is rising, then marginal cost is greater than average total cost.

The average-total-cost curve intersects

average fixed cost at the minimum of average total cost

The firm's efficient scale is the quantity of output that minimizes

average total cost

Which of the following explains why long-run average cost at first decreases as output increases?

gains from specialization of inputs

The marginal product of labor is equal to the

increase in output obtained from a one unit increase in labor

A production function is a relationship between

inputs and quantity of output

How long does it take a firm to go from the short run to the long run?

it depends on the nature of the firm

Firms may experience diseconomies of scale when

large management structures are bureaucratic and inefficient

Economies of scale occur when a firm's

long-run average total costs are decreasing as output increases

Diminishing marginal product suggests that

marginal cost is upward sloping

are average fixed costs constant or not constant?

not constant

When comparing short-run average total cost with long-run average total cost at a given level of output,

short-run average total cost is typically above long-run average total cost

When calculating a firm's profit, an economist will subtract only

the opportunity costs from total revenue because these include both the implicit and explicit costs of the firm

In the long run, inputs that were fixed in the short run become

variable

In the short run, a firm incurs fixed costs

whether it produces output or not