Refer to Table 13-1. What Is Total Output When 2 Workers Are Hired?

Multiple Choice

Place the letter of the choice that best completes the statement or answers the question.

ane.

Industrial organization is the written report 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 weather they face.

two.

Which of the following would be categorized as an implicit cost?

(i)	wages of workers
(ii)	raw material costs
(iii)	forgone investment opportunities

a.	(i) and (iii)
b.	(iii) only
c.	(ii) and (iii)
d.	All of the above are right.

three.

An example of an implicit cost of product would be

a.	the income an entrepreneur could have earned working for someone else.
b.	the cost of raw materials for producing bread in a bakery.
c.	the price of a delivery truck in a business that rarely makes deliveries.
d.	All of the above are right.

4.

Economic profit is equal to

(i)	total revenue - (explicit costs + implicit costs).
(ii)	total revenue - opportunity costs.
(iii)	accounting turn a profit + implicit costs.

a.	(i) only
b.	(i) and (ii)
c.	(two) and (three).
d.	All of the in a higher place are correct.

5.

To an economist, it is conceivable that the objective that motivates an individual entrepreneur to start a business arises from

a.	an innate love for the blazon of concern that he or she starts.
b.	a want to earn a turn a profit.
c.	an altruistic desire to provide the world with a good product.
d.	All of the above are correct.

six.

When a firm is making a profit-maximizing production decision, which of the following principles of economics is likely to be most important to the firm'due south decision?

a.	The price of something is what you give up to go information technology.
b.	A country's standard of living depends on its ability to produce goods and services.
c.	Prices rising when the authorities prints besides much money.
d.	Governments can sometimes ameliorate market outcomes.

Refer to the following information to answer the following questions.

Scenario thirteen-2

Zach took $500,000 out of the banking company and used it to start his new cookie business concern. The bank account pays four percentage interest per yr. During the get-go twelvemonth of his business, Zach sold 12,000 boxes of cookies for $3 per box. Too, during the beginning yr, the cookie business incurred costs that required outlays of money amounting to $fourteen,000.

vii.

Refer to Scenario 13-2. Zach'south accounting profit for the year was

a.	$-478,000.
b.	$-56,000.
c.	$2,000.
d.	$22,000.

eight.

Refer to Scenario 13-2. Zach'southward economic turn a profit for the year was

a.	$-478,000.
b.	$-56,000.
c.	$ii,000.
d.	$22,000.

Use the post-obit information to respond the following questions.

Scenario thirteen-iii

Tony is a wheat farmer, but he also spends part of his twenty-four hours teaching guitar lessons. Due to the popularity of his local state western band, Farmer Tony has more than students requesting lessons than he has time for if he is to also maintain his farming business organization. Farmer Tony charges $25 an 60 minutes for his guitar lessons. One spring day, 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.

ix.

Refer to Scenario xiii-iii. Tony's accounting profit equals

a.	$-lxxx.
b.	$130.
c.	$170.
d.	$260.

10.

Dolores used to work as a high school instructor for $twoscore,000 per year but quit in guild to kickoff her ain catering concern. To buy the necessary equipment, she withdrew $twenty,000 from her savings, (which paid 3 percent interest) and borrowed $30,000 from her uncle, whom she pays 3 percent involvement per twelvemonth. Last yr she paid $25,000 for ingredients and had acquirement of $60,000. She asked Louis the auditor and Greg the economist to summate her turn a profit for her.

a.	Louis says her profit is $34,100 and Greg says her profit is $vi,500.
b.	Louis says her turn a profit is $34,100 and Greg says she lost $half-dozen,500.
c.	Louis says her turn a profit is $35,000 and Greg says she lost $5,000.
d.	Louis says her profit is $33,500 and Greg says her profit is 33,500.

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 one unit increase in labor.
c.	increase in labor necessary to generate a one unit increase in output.
d.	increase in output obtained from a one unit increase in labor.

The figure below depicts a production function for a firm that produces cookies. Use the figure to answer the following questions.

Effigy 13-1

12.

Refer to Effigy 13-1. With regard to cookie production, the figure implies

a.	diminishing marginal product of workers.
b.	diminishing marginal cost of cookie product.
c.	decreasing toll of cookie product.
d.	increasing marginal product of workers.

The figure beneath depicts a full cost function for a business firm that produces cookies. Employ the effigy to answer the post-obit questions.

Figure xiii-ii

13.

Refer to Figure 13-2. The changing slope of the total cost bend reflects

a.	decreasing boilerplate variable cost.
b.	decreasing average total cost.
c.	decreasing marginal product.
d.	increasing fixed cost.

14.

For a business firm, the product role represents the relationship between

a.	implicit costs and explicit costs.
b.	quantity of inputs and total price.
c.	quantity of inputs and quantity of output.
d.	quantity of output and total cost.

xv.

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

a.	boilerplate full cost.
b.	opportunity cost.
c.	variable cost.
d.	marginal cost.

xvi.

Boilerplate full price equals

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

Scenario 13-four

For the following questions, assume that a given firm experiences decreasing marginal product of labor with the addition of each worker regardless of the current output level.

17.

Refer to Scenario 13-four. Average fixed cost will be

a.	always ascension.
b.	always falling.
c.	U-shaped.
d.	constant.

Effigy 13-3

18.

Refer to Figure 13-three. Which of the above marginal cost curves reflects the being of diminishing marginal product?

19.

If marginal price is rising,

a.	average variable price must exist falling.
b.	average fixed cost must be rising.
c.	marginal production must exist falling.
d.	marginal product must be rising.

20.

Diminishing marginal product suggests that the marginal

a.	cost of an extra worker is unchanged.
b.	cost of an extra worker is less than the previous worker's marginal cost.
c.	product of an extra worker is less than the previous worker's marginal product.
d.	product of an extra worker is greater than the previous worker's marginal product.

21.

Diminishing marginal production suggests that

a.	additional units of output get less plush as more than output is produced.
b.	marginal price is upward sloping.
c.	the house is at total chapters.
d.	All of the to a higher place are correct.

22.

Johnny is a sophomore in college and has a 1.5 cumulative grade signal average (GPA). Johnny's cumulative GPA will fall even further next semester if he performs worse than

(i)	his cumulative GPA.
(ii)	he ever performed before.
(iii)	he did last semester.

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

The curves below reflect data near the toll construction of a house. Employ the figure to answer the following questions.

Effigy 13-5

23.

Refer to Figure 13-five. Which of the curves is near likely to represent average fixed toll?

24.

Refer to Figure 13-five. This particular business firm is necessarily experiencing increasing marginal production when curve

a.	A is falling.
b.	B is falling.
c.	C is falling.
d.	D is falling.

25.

Refer to Figure 13-5. This particular house is necessarily experiencing diminishing marginal production when curve

(i)	A is rising.
(two)	B is rise.
(three)	C is rising.

a.	(i) only
b.	(iii) only
c.	(i) and (2)
d.	All of the above are correct.

26.

Total cost can be divided into two types. Those 2 types are

a.	fixed costs and variable costs.
b.	fixed costs and marginal costs.
c.	variable costs and marginal costs.
d.	boilerplate costs and marginal costs.

27.

For a construction visitor that builds houses, which of the post-obit costs would exist a fixed cost?

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

28.

Which of the following measures of cost is best described as "the cost of a typical unit of output if total cost is divided evenly over all the units produced?"

a.	average stock-still cost
b.	average variable cost
c.	boilerplate full cost
d.	marginal cost

Refer to the following information to answer the following questions.

Scenario 13-five

A certain firm produces and sells staplers. Last year, it produced 5,000 staplers and sold each stapler for $8. In producing the five,000 staplers, it incurred variable costs of $30,000 and a total cost of $45,000.

29.

Refer to Scenario 13-v. The firm's fixed costs amounted to

a.	$15,000.
b.	$xxx,000.
c.	$40,000.
d.	$fifty,000.

Refer to the figures below to answer the post-obit questions.

Figure 13-vi

xxx.

Refer to Figure thirteen-6. Which of the figures represents the total price curve for a firm?

a.	Effigy ane
b.	Effigy 2
c.	Figure iii
d.	Figure iv

Utilise the following data to answer the following questions.

Table xiii-1

Measures of Cost for ABC Inc. Widget Manufactory
Quantity of Widgets	Variable Costs	Total Costs	Fixed Costs
0			$10
1	$ ane
ii	$ 3	$thirteen
3	$ 6	$16
4	$ten
5		$25
six	$21		$10

31.

Refer to Table 13-1. The marginal cost of producing the sixth widget is

a.	$ane.00.
b.	$3.50.
c.	$5.00.
d.	$6.00.

32.

Refer to Table 13-1. What is the variable cost of producing nada widgets?

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

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

Adrian's Premium Boxing Service subcontracts with a chocolate manufacturer to box premium chocolates for their post gild catalogue concern. She rents a small-scale room for $150 a week in the downtown concern district that serves equally her factory. She can rent workers for $275 a week.

Table 13-ii

Number of Workers	Chocolates Produced per Week	Marginal Product of Labor	Toll of Mill	Price of Workers	Total Cost of Inputs
0	0
1		330	150	275	425
ii	630
3		150		825	975
4	890
five	950	60		1,375
6		10			1,800

33.

Refer to Tabular array 13-2. 1 week, Adrian earns a profit of $125. If her revenue for the week is $1100, how many boxes of chocolate did she produce?

34.

Harry Potter is a small street vendor service who contracts to produce and sell molded plastic souvenirs (key chains, commemorative plastic coins, plastic animals, etc.) at small, county carnivals. As possessor of the firm, Harry must decide how much of each production to produce. A key element of this decision is

a.	how costs will vary as he changes the level of product.
b.	the price of bookkeeping services.
c.	the fixed cost of production.
d.	the toll of his selling booth.

35.

When a firm is able to put idle equipment to use past hiring some other worker,

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

36.

At Bert's Bootery, the total toll of producing 20 pairs of boots is $400. The marginal cost of producing the twenty-start pair of boots is $83. Nosotros tin can conclude that the boilerplate

a.	variable cost of 21 pairs of boots is $23.
b.	full cost of 21 pairs of boots is $23.
c.	total price of 21 pairs of boots is $15.09.
d.	total cost of 21 pairs of boots cannot exist calculated from the information given.

37.

One of the most important properties of cost curves is that

a.	for almost producers , the average total cost curve never crosses the marginal cost curve.
b.	the average stock-still cost curve must somewhen rising.
c.	the average total cost curve first rises, then falls with increased output.
d.	the marginal cost curve eventually rises with the quantity of output.

38.

In the long run,

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

39.

The long-run average full toll curve is always

a.	flatter than the short-run boilerplate total cost curve, only not necessarily horizontal.
b.	horizontal.
c.	falling as output increases.
d.	rising every bit output increases.

xl.

When, for a firm, long-run average full cost decreases as the quantity of output increases, we have a situation of

a.	economies of scale.
b.	diseconomies of calibration.
c.	coordination problems arising from the large size of the firm.
d.	fixed costs profoundly exceeding variable costs.

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