Chp. 13 True/False

(T/F) In the long run, as a firm expands its production facilities, it generally first experiences diseconomies of scale, then constant returns to scale, then constant returns to scale, and finally economies of scale

False, A firm generally experiences economies of scale, constant returns to scale, and diseconomies of scale as the scale of production expands

(T/F) The efficient scale for a firm is the quantity of output that minimizes marginal cost

False, Efficient scale minimizes average total costs

(T/F) Average total costs are total costs divided by marginal costs

False, average total costs are total costs divided by the quantity of output

(T/F) If the production function for a firm exhibits diminishing marginal product, the corresponding total-cost curve for the firm will become flatter as the quantity of output expands

False, diminishing marginal product is the slop of the production function, so marginal product is decreasing when the production functions gets flatter

(T/F) When a production function gets flatter, the marginal product is increasing

False, marginal product is the slope of the production function, so marginal product is decreasing when the production function gets flatter

(T/F) The average-total-cost curve crosses the marginal-cost curve at the minimum of he marginal-cost curve

False, the marginal-cost curve crosses the average-total-cost curve at the minimum of the average-total-cost curve

(T/F) Wages and salaries paid to workers are an example of implicit costs of production

False, wages and salaries are explicit costs of production because dollars flow out of the firm

(T/F) Fixed costs plus variable costs equal total costs

True

(T/F) If a firm continues to employ more workers within the same size factor, it will eventually experience diminishing marginal product

True

(T/F) If total revenue is $100, explicit costs are $50, and implicit costs are $30, then accounting profit equals $50.

True

(T/F) If, as the quantity produced increases, a production function first exhibits increasing marginal product and later diminishing marginal product, the corresponding marginal-cost curve will be U-shaped

True

(T/F) The average-total-cost curve in the long run is flatter than the average-total-cost curve in the short run

True

(T/F) Total revenue equals the quantity of output the firm produces times the price at which it sells its output

True

(T/F) When a marginal costs are below average total costs, average total costs must be falling

True

If there are implicit costs of production, accounting profits will exceed economic profits.

True