1. Cornelius and Zira are in the banana export business with Dr. Milo. Milo asks them to choose the appropriate term for the amount of money that a firm receives from the sale of its output? a. total gross profit b. total net profit c. total revenue d. net revenue 2. General Urko is getting into the rifle production business. In general, a firm's opportunity costs of production consist of ? a. its explicit costs only |b. its implicit costs only c. its explicit costs and implicit costs combined d. its explicit costs, implicit costs, and total revenue combined 3. Thufir Hawat has decided to add accounting to his mentat skills. Which of the following does NOT calculate accounting profit or economic profit properly? a. Accounting profit = Total revenue - Explicit costs b. Economic profit = Total revenue - Total opportunity costs c. Economic profit = Total revenue Explicit costs Implicit costs d. Accounting profit = Total revenue Total opportunity costs 4. Macbeth and Duncan are beating their swords into ploughs and taking up farming. Suppose adding another unit of labour leads to an increase in farm output that is smaller than increases in output that resulted from adding previous units of labour. What important property does this suggest? a. diminishing labour b. negative marginal labour c. diminishing marginal product d. negative marginal product 5. In preparing for a presentation on the economy of Gamma Hydra Four, Jean-Luc Picard wants to know which of the following describes a short-run Neoclassical production function? a. The production function depicts the relationship between the quantity of labour and the quantity of output. b. The slope of the production function measures marginal cost. c. The quantity of output is measured along the horizontal axis. d. Marginal product is always constant. 6. Falstaff and Agrippa are having an argument about firm theory. Which is often realistic for a firm in the short run? a. The firm can vary the size of its factory and the number of workers. b. The firm can vary the size of its factory, but not the number of workers. c. The firm can vary the number of workers, but not the size of its factory. d. The firm can vary neither the size of its factory nor the number of workers it employs. 7. Jean-Claude Van Damme is learning about production. What can you tell Jean-Claude about fixed costs? Ja. They vary inversely with production. b. They vary in proportion with production. c. They are incurred only when production is large enough. d. They are incurred even if nothing is produced. 11:34 Economics 1100 Quiz 4 000 8. Don Adriano de Armado wants to know what distinguishes short-run cost analysis from long-run cost analysis for a profit- maximizing firm in the short run? a. Output is not variable. b. The number of workers used to produce the firm's product is fixed. c. The size of the factory is fixed. d. There are no fixed costs. 9. The Abbot of Westminister and Marcus Andronicus want to know what does average total cost tell us? a. the total cost of the first unit of output, if total cost is divided evenly over all the units produced b. the cost of a typical unit of output, if total cost is divided evenly over all the units produced c. the cost of the last unit of output, if total cost does not include a fixed cost component d. the variable cost of a firm that is producing at least one unit of output 10. Some costs do NOT vary with the quantity of output produced said Troilus to Cassandra. What are those costs then called asked Cassandra? They are: a. marginal costs b.Javerage costs c. fixed costs d. incurred costs Scenario 13-Cinco A pharmacy produces and sells luxury condoms. Last year, it produced 5000 condoms and sold each condom for $8. In producing the 5000 condoms, it incurred variable costs of $30 000 and a total cost of $45 000. 11. Refer to Scenario 13-cinco. In producing the 5000 condoms, what was the firm's average fixed cost? a. $3 b. $4 c.$5 d I$6 11:35 Economics 1100 Quiz 4 000 Table 13-Drie Three Amigos is a small company that has a subcontract to produce instructional materials for Manitoban children in public school districts. The owner rents several small rooms in an office building in the suburbs for $600 a month and has leased computer equipment that costs $480 a month. Output (instructional Lessons per Fixed Variable Total Cost Average Variable Total Cost Marginal month) Average Average Costs Costs Fixed Cost Cost Cost $1080 1 $1080 $400 $1480 $400 2 $965 $450 3 $1350 $2430 4 $1900 $475 $2500 $216 6. $4280 $700 7 $4100 $5400 $135 9 $7300 10 $10 880 $980 12. Refer to Table 13-Drie. Greg Mankiw wants to know what the marginal cost of creating the tenth instructional lesson is in a given month? a. $900 b. $1250 c. $2500 d. $3060 13. John Kenneth Galbraith owns and operates a small lemonade stand in Boston. When JKG is producing a small quantity of lemonade, he has few workers and the equipment is not being fully utilized. If he can easily put idle resources to use, what will happen to the costs of production? a. The marginal cost of an extra worker is large. |b. The marginal cost of one more glass of lemonade is small. c. The average variable cost of an extra worker will increase. d. The average variable cost of an extra worker will decrease. 14. Commander Data and Calpurnia while taking a break from their weekly poker game want to know why so very often are long-run average-total-cost curves U-shaped? a. because of the same reasons that average-total-cost curves are often U-shaped b. because of constant returns to scale c. because of increasing coordination problems at low levels of production and increasing specialization of workers at high levels of production d. because of increasing specialization of workers at low levels of production and increasing coordination problems at high levels of production Figure 13-Ses ATC, ATC2 ATC 11:35 Economics 1100 Quiz 4 000 Figure 13-Ses ATC, ATC, ATC Quantity Output 15. Refer to Figure 13-Ses which depicts singing costs for Britney Spears. When does Britney experience diseconomies of scale? a. if it changes its level of output from Q, to Q2 b. if it changes its level of output from Q, to Q, c. if it changes its level of output from Q, to Q d. if it changes its level of output from Q, to Q 16. Selena Gomez has been told her music company is experiencing diseconomies of scale. When do diseconomies of scale cur? a. when average fixed costs are falling b. when average fixed costs are constant c. when long-run average total costs rise as output increases d. when long-run average total costs fall as output increases 17. If the relative price of a ticket to a Justin Bieber concert is three times the price of a meal at a MacDonald's Restaurant, what is the opportunity cost of a concert ticket? a. the slope of the budget constraint b. the slope of the indifference curve c. the intercept on the concert axis d. the intercept on the restaurant axis 18. Assume that a Lakehead student named Florence Nightingale spends all of her income on cola and candy bars. During exam week at Lakehead, the price of a candy bar is $1.00 and a can of cola costs $0.75. If she has $20 of income, what could she choose to consume? a. 3 candy bars and 18 cans of cola b. 7 candy bars and 16 cans of cola c. 8 candy bars and 15 cans of cola d. 17 candy bars and 4 cans of cola Figure Vingt-et-un-3 () (D) Quantity I Quantity