ECON CHAPTER 13 T/F NOTES

A second or third worker may have a higher marginal product than the first in certain circumstances.

true

Accountants keep track of the money that flows into and out of firms.

true

Accountants often ignore implicit costs.

true

Assume Jack received all A's in his classes last semester. If Jack gets all C's in his classes this semester, his GPA may or may not fall.

true

Average total cost and marginal cost are merely ways to express information that is already contained in a firm's total cost.

true

Average variable cost is equal to total variable cost divided by the quantity of output.

true

Diminishing marginal product exists when the production function becomes flatter as inputs increase.

true

Fixed costs are incurred even when a firm does not produce anything.

true

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

true

The average total cost curve reflects the shape of both the average fixed cost and average variable cost curves.

true

The cost of producing an additional unit of a good is not the same as the average cost of the good.

true

The marginal cost curve intersects the average total cost curve at the minimum point of the average total cost curve.

true

The shape of the marginal cost curve tells a producer something about the marginal product of her workers.

true

Variable costs usually change as the firm alters the quantity of output produced.

true

When average total cost rises if a producer either increases or decreases production, then the firm is said to be operating at efficient scale.

true

When trying to understand the decision making process of different firms, economists assume that people think at the margin.

true

Average total cost reveals how much total cost will change as the firm altered its level of production.

false

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

false

Economists normally assume that people start their own businesses to help society maximize its income.

false

If the marginal cost curve intersects the average total cost curve at the minimum point of the average total cost curve.

false

The average total cost curve is unaffected by diminishing marginal product.

false

The shape of the total cost curve is unrelated to the shape of the production function.

false

Variable costs equal fixed costs when nothing is produced.

false

When economists speak of a firm's costs, they are usually excluding the opportunity costs.

false