Refer to Table 13-1. What Is Total Output When 3 Workers Are Hired?

Multiple Selection

Identify the alphabetic character of the choice that best completes the statement or answers the question.

ane.

Industrial organization is the study of how

a.	labor unions organize workers in industries.
b.	profitable firms are in organized industries.
c.	industries organize for political reward.
d.	firms' decisions regarding prices and quantities depend on the market conditions they confront.

2.

Economists normally assume that the goal of a firm is to

(i)	sell as much of their production as possible.
(ii)	fix the price of their product as high as possible.
(iii)	maximize profit.

a.	(i) and (ii)
b.	(ii) and (3)
c.	(iii) only
d.	All of the higher up are correct.

three.

The amount of coin that a firm pays to buy inputs is called

a.	total price.
b.	variable cost.
c.	marginal cost.
d.	fixed price.

4.

To an economist, the field of industrial arrangement answers which of the following questions?

a.	Why are consumers subject to the law of demand?
b.	Why practise firms experience falling marginal product of labor?
c.	How does the difference in the number of firms impact prices and the efficiency of marketplace outcomes?
d.	Why do firms consider product costs when determining product supply?

5.

Accountants are primarily interested in the

a.	flow of money into and out of firms.
b.	stock of assets of firms.
c.	marginal costs of product of firms.
d.	taxes due on capital assets of firms.

Use the following data to respond the following questions.

Scenario 13-i

Joe wants to start his ain business. The business he wants to offset will require that he purchase a manufacturing plant that costs $300,000. To finance this buy, he will use $100,000 of his own money, on which he has been earning 10 percent interest. In improver, he will borrow $200,000, and he will pay 12 percent interest on that loan.

half-dozen.

Refer to Scenario 13-1. For the starting time year of functioning, what is the opportunity cost of purchasing the factory?

a.	$10,000
b.	$20,000
c.	$24,000
d.	$34,000

7.

When a business firm is making a profit-maximizing production conclusion, which of the following principles of economic science is likely to exist nearly of import to the firm's determination?

a.	The toll of something is what you surrender to go it.
b.	A country's standard of living depends on its ability to produce appurtenances and services.
c.	Prices ascent when the government prints too much money.
d.	Governments can sometimes improve market outcomes.

8.

Which of the following expressions is correct?

a.	bookkeeping profit = full revenue - explicit costs.
b.	economic profit = total revenue - total opportunity costs.
c.	economic profit = total revenue - explicit costs - implicit costs.
d.	All of the higher up are correct.

Use the following information to reply the following questions.

Scenario 13-3

Tony is a wheat farmer, but he too spends part of his day educational activity guitar lessons. Due to the popularity of his local country western band, Farmer Tony has more students requesting lessons than he has time for if he is to too maintain his farming business. Farmer Tony charges $25 an hour for his guitar lessons. One spring twenty-four hour period, he spends 10 hours in his fields planting $130 worth of seeds on his farm. He expects that the seeds he planted will yield $300 worth of wheat.

9.

Refer to Scenario thirteen-iii. What is the full opportunity cost of the day that Farmer Tony incurred for his spring 24-hour interval in the field planting wheat?

10.

A product role is a relationship between

a.	inputs and quantity of output.
b.	inputs and revenue.
c.	inputs and costs.
d.	inputs and turn a profit.

11.

The marginal product of labor is equal to the

a.	incremental cost associated with a one unit increase in labor.
b.	incremental profit associated with a i unit of measurement increment in labor.
c.	increase in labor necessary to generate a one unit increase in output.
d.	increase in output obtained from a 1 unit increase in labor.

The figure below depicts a total cost function for a firm that produces cookies. Employ the figure to answer the following questions.

Figure xiii-2

12.

Refer to Figure 13-2. Which of the statements below is nigh consistent with the shape of the full cost curve?

a.	Producing an additional cookie is always more costly than producing the previous cookie.
b.	Full production of cookies decreases with boosted units of input.
c.	Producing additional cookies is as costly, regardless of how many cookies are already existence produced.
d.	Producing boosted cookies becomes increasingly plush merely when the number of cookies already being produced is large.

thirteen.

The marginal production of an input in the product process is the increment in

a.	total revenue obtained from an boosted unit of that input.
b.	profit obtained from an additional unit of that input.
c.	total revenue obtained from an additional unit of measurement of that input.
d.	quantity of output obtained from an additional unit of measurement of that input.

14.

On a 100-acre farm, a farmer is able to produce 3,000 bushels of wheat when he hires 2 workers. He is able to produce iv,400 bushels of wheat when he hires three workers. Which of the post-obit possibilities is consistent with the belongings of diminishing marginal product?

a.	The farmer is able to produce 5,600 bushels of wheat when he hires four workers.
b.	The farmer is able to produce 5,800 bushels of wheat when he hires 4 workers.
c.	The farmer is able to produce half dozen,000 bushels of wheat when he hires four workers.
d.	All of the above are right.

15.

Which of the following costs practice not vary with the amount of output a house produces?

a.	average fixed costs
b.	stock-still costs and boilerplate fixed costs
c.	marginal costs and average fixed costs
d.	fixed costs

sixteen.

If a firm produces nothing, which of the following costs will be goose egg?

a.	total toll
b.	fixed toll
c.	opportunity cost
d.	variable cost

17.

Ane assumption that distinguishes short-run price analysis from long-run cost analysis for a profit-maximizing house is that in the short run,

a.	output is not variable.
b.	the number of workers used to produce the firm's product is stock-still.
c.	the size of the manufactory is fixed.
d.	in that location are no stock-still costs.

18.

The cost of producing the typical unit of output is the firm's

a.	average full cost.
b.	opportunity cost.
c.	variable toll.
d.	marginal cost.

xix.

The toll of producing an additional unit of output is the firm's

a.	marginal cost.
b.	productivity offset.
c.	variable toll.
d.	boilerplate variable cost.

twenty.

Average total cost equals

a.	change in total costs divided by quantity produced.
b.	change in total costs divided by change in quantity produced.
c.	(stock-still costs + variable costs) divided by quantity produced.
d.	(fixed costs + variable costs) divided past change in quantity produced.

21.

Marginal cost equals

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

a.	(i) and (ii)
b.	(ii) and (three)
c.	(ii) but
d.	All of the higher up are correct.

Figure 13-3

22.

Refer to Figure 13-3. Which of the to a higher place marginal cost curves reflects the existence of diminishing marginal product?

23.

When marginal cost is less than average total cost,

a.	marginal cost must be falling.
b.	boilerplate variable cost must be falling.
c.	boilerplate total cost is falling.
d.	average total cost is rising.

Figure 13-4

24.

Refer to Figure 13-4. Which of the following tin can be inferred from the figure to a higher place?

(i)	Marginal price is increasing at all levels of output.
(ii)	Marginal product is increasing at low levels of output.
(iii)	Marginal product is decreasing at high levels of output.

a.	(i) and (ii)
b.	(ii) and (iii)
c.	(i) and (iii)
d.	All of the to a higher place are right.

The curves beneath reflect data near the cost structure of a firm. Use the figure to respond the following questions.

Effigy 13-5

25.

Refer to Effigy 13-v. Which of the curves is nigh likely to correspond average variable cost?

26.

For a construction company that builds houses, which of the following costs would be a fixed cost?

a.	the $50,000 per twelvemonth bacon paid to a construction foreman
b.	the $30,000 per year salary paid to the company's bookkeeper
c.	the $10,000 per twelvemonth premium paid to an insurance visitor
d.	All of the above are correct.

27.

Average total cost (ATC) is calculated equally follows:

a.	ATC = (alter in total cost)/(change in quantity of output).
b.	ATC = (change in total cost)/(change in quantity of input).
c.	ATC = total toll/quantity of output.
d.	ATC = total cost/quantity of input.

28.

Implicit costs

a.	practice not require an outlay of money by the firm.
b.	do not enter into the economist's measurement of a firm's profit.
c.	are besides known as variable costs.
d.	All of the above are correct.

Refer to the post-obit data to reply the post-obit questions.

Scenario xiii-5

A certain business firm produces and sells staplers. Last year, it produced v,000 staplers and sold each stapler for $viii. In producing the v,000 staplers, it incurred variable costs of $30,000 and a total cost of $45,000.

29.

Refer to Scenario 13-five. The firm'due south economical profit for the year was

a.	$-35,000.
b.	$-5,000
c.	$10,000.
d.	$40,000.

thirty.

Which of the following statements about costs is right?

a.	When marginal toll is less than average total toll, average total cost is rise.
b.	The total cost curve is U-shaped.
c.	Equally the quantity of output increases, marginal cost eventually rises.
d.	All of the above are correct.

Utilize the following information to answer the post-obit questions.

Table xiii-ane

Measures of Cost for ABC Inc. Widget Factory
Quantity of Widgets	Variable Costs	Total Costs	Fixed Costs
0			$x
i	$ 1
two	$ 3	$13
3	$ 6	$16
four	$10
5		$25
6	$21		$10

31.

Refer to Table 13-i. What is the variable cost of producing aught widgets?

a.	$0
b.	$i.00
c.	$10.00
d.	$10.00

32.

Refer to Table xiii-one. What is the marginal price of producing the first widget?

a.	$1.00
b.	$ten.00
c.	$11.00
d.	It tin can't be determined from the data given.

Use the following information to answer the following questions.

Adrian'southward Premium Battle Service subcontracts with a chocolate manufacturer to box premium chocolates for their mail guild catalogue business. She rents a small room for $150 a week in the downtown business district that serves as her factory. She can hire workers for $275 a week.

Tabular array xiii-2

Number of Workers	Chocolates Produced per Week	Marginal Product of Labor	Price of Mill	Toll of Workers	Full Price of Inputs
0	0
ane		330	150	275	425
2	630
3		150		825	975
iv	890
five	950	threescore		1,375
half-dozen		10			1,800

33.

Refer to Tabular array xiii-2. What is the marginal product of the second worker?

34.

At what level of output will average variable price equal average total cost?

a.	when marginal cost equals boilerplate full cost
b.	for all levels of output in which average variable cost is falling
c.	when marginal price equals average variable cost
d.	There is non a level of output where this occurs, equally long equally fixed costs are positive.

35.

When a business firm is able to put idle equipment to apply by hiring another worker,

a.	variable costs will ascent.
b.	variable costs will autumn.
c.	fixed costs will fall.
d.	stock-still costs and variable costs will rise.

36.

Consider the following information about baseball game production at Bob'due south Baseball Manufacturing plant:

Worker	Marginal Production
1	three
ii	5
3	viii
4	x
5	vii
half-dozen	4
7	two

Bob pays all his workers the same wage and labor is his only variable cost. From this information we can conclude that Bob'southward boilerplate variable cost decreases

a.	as output rises from 0 to 10, merely rises after that.
b.	equally output rises from 0 to 26, but rises after that.
c.	as output rises from 0 to 33, but increases later on that.
d.	continually as output rises.

37.

In the long run,

a.	inputs that were stock-still in the short run remain fixed.
b.	inputs that were fixed in the short run go variable.
c.	inputs that were variable in the short run become fixed.
d.	variable inputs are rarely used.

The figure below depicts average full cost functions for a firm that produces automobiles. Utilize the figure to answer the following questions.

Figure thirteen-7

38.

Refer to Figure xiii-vii. This firm experiences diseconomies of scale at what output levels?

a.	output levels above North
b.	output levels between Thousand and North
c.	output levels below M
d.	All of the above are correct, if the firm is operating in the long run.

39.

Constant returns to scale occur when

a.	long-run total costs are constant equally output increases.
b.	long-run average total costs are constant equally output increases.
c.	the firm's long-run average cost curve is falling equally output increases.
d.	the firm'due south long-run average cost curve is rising equally output increases.

40.

In the long run, a house that produces and sells computers gets to choose

a.	how many workers to hire.
b.	the size of its factories.
c.	which short-run average-full-cost bend to use.
d.	All of the above are right.

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