Production & Costs - Practice Quiz

A business owner makes 50 items by hand in 40 hours. She could have earned $20 an hour working for someone else. Her total explicit costs are $200. If each item she makes sells for $15, her economic profit equals:

-250

The table below shows the weekly cost of producing cowboy hats.

1,000 1,000 Correct 200 1,200 1,200 Correct $ 100 100 Correct $ 20 20 Correct $120.00 20 1,000 1,000 Correct 360 360 Correct 1,360 50 50 Correct 18.00 68.00 30 1,000 1,000 Correct 560 1,560 1,560 Correct 33.33 18.67 52 52 Correct 40 1,000 1,000 Correct 800 800 Correct 1,800 25 25 Correct 20 20 Correct 45.00 50 1,000 1,000 Correct 1,100 2,100 2,100 Correct 20 20 Correct 22.00 42 42 Correct

A young Thomas Edison produces and sells 20 light bulbs a week in his dorm room. The parts for each light bulb cost $2.00. He sells each light bulb for $5.00. General Electric offers Thomas an executive job that pays $50.00 a week. Thomas's weekly economic profit from making light bulbs is equal to:

10

The table below shows Crystal's total cost of producing different quantities of tie-dyed t-shirts for a local arts festival.

18 $ 3 3 Correct 2 20 2 2 Correct 3 21 1 1 Correct 4 24 3 3 Correct 5 29 5 5 Correct 6 36 7 7 Correct

The table below shows the monthly cost of producing vintage model cars for collectors.

2,500 2,500 Correct 500 3,000 3,000 Correct 200 2,500 2,500 Correct 1,000 3,500 3,500 Correct 300 2,500 2,500 Correct 2,000 2,000 Correct 4,500 400 2,500 2,500 Correct 3,000 5,500 5,500 Correct

Which of the following is an implicit cost of owning and operating a farm?

The money a farmer could earn by working for someone else

Which of the following costs is an explicit cost for you?

You hire a worker who could have received the same wage working for your competitor.

Barney decides to quit his job as a corporate accountant, which pays $10,000 a month, and goes into business for himself as a certified public accountant. He runs his business from his converted garage apartment, which he could rent out for $300 a month if he wasn't using it as a home office. He must purchase office supplies worth $75 a month, and his monthly electricity bill has increased by $50 now that he is working out of his home office. After six months of working from home, Barney has earned an average of $12,000 per month. a. What are Barney's average monthly accounting profits? b. What are Barney's average monthly economic profits?

a) $11,875 b) $1,575

Barney decides to quit his job as a corporate accountant, which pays $10,000 a month, and goes into business for himself as a certified public accountant. He runs his business from his converted garage apartment, which he could rent out for $300 a month if he wasn't using it as a home office. He must purchase office supplies worth $75 a month, and his monthly electricity bill has increased by $50 now that he is working out of his home office. After six months of working from home, Barney has earned an average of $12,000 per month. a. What are Barney's monthly explicit costs? b. What are Barney's monthly implicit costs? c. What are Barney's monthly economic costs?

a. 125 b. 10300 c. 10425

The figure below shows the average and marginal cost curves for producing cheeseburgers per hour.

a. At a quantity of 25 cheeseburgers per hour, the average total cost of production is falling Correct and the marginal cost of cheeseburger production is rising b. At a quantity of 35 cheeseburgers per hour, the average variable cost of production is rising Correct and the average total cost of cheeseburger production is at a minimum

The table below presents the average and marginal cost of producing cheeseburgers per hour at a roadside diner.

a. At a quantity of 40 cheeseburgers per hour, the average total cost of production is falling Correct and the marginal cost of cheeseburger production is rising b. At a quantity of 60 cheeseburgers per hour, the average variable cost of production is rising Correct and the average total cost of cheeseburger production is constant

A firm finds that whether it produces 30,000 vases or 40,000 vases, its average total cost is $180. This observed pattern might be explained by:

constant returns to scale.

The upward-sloping portion of the long-run average cost curve is a result of:

diseconomies of scale.

The downward-sloping portion of the long-run average cost curve is a result of:

economies of scale.