XYZ Corporation produced 300 units of output but sold only 250 of the units it produced. The average cost of production for each unit of output produced was $100. Each of the 250 units sold was sold for a price of $85. What would total revenue for XYZ Corporation be?

Select one:

a.-$3750

b.$21,250

c.-$21,250

d.$3750

When do economies of scale arise?

Select one:

a.when workers are able to specialize in a particular task

b.when fixed costs are large relative to variable costs

c.when individuals in a society make purchases due to a current trend

d.when an economy is self-sufficient in production

What must be happening when marginal cost is greater than average total cost?

Select one:

a.Marginal cost is rising.

b.Marginal cost is falling.

c.Average total cost is rising.

d.Average total cost is falling.

At all levels of production beyond the point where the marginal-cost curve crosses the average variable cost curve, what happens to average variable cost?

Select one:

a.It falls and then rises.

b.It falls.

c.It rises and then falls.

d.It rises.

When a firm is able to put idle equipment to use by hiring another worker, what will result?

Select one:

a.Variable costs will rise.

b.Fixed costs will fall.

c.Variable costs will fall.

d.Fixed costs and variable costs will rise.

What is the term for the amount of money that a wheat farmer could have earned if he had planted barley instead of wheat?

Select one:

a.an explicit cost

b.an implicit cost

c.forgone accounting profit

d.an accounting cost

If marginal cost is rising, what must be happening?

Select one:

a.Marginal product must be rising.

b.Marginal product must be falling.

c.Average variable cost must be falling.

d.Average fixed cost must be rising.

What does the concept of average total cost represent?

Select one:

a.the cost of the last unit of output, if total cost does not include a fixed cost component

b.the cost of a typical unit of output, if total cost is divided evenly over all the units produced

c.the variable cost of a firm that is producing at least one unit of output

d.the total cost of the first unit of output, if total cost is divided evenly over all the units produced

Suppose a certain firm is able to produce 160 units of output per day when 15 workers are hired. Holding other inputs fixed, the firm is able to produce 180 units of output per day when 16 workers are hired. What is the marginal product of the 16th worker?

Select one:

a.20 units of output

b.21 units of output

c.19 units of output

d.22 units of output

On a 200-acre farm, a farmer is able to produce 3000 bushels of wheat when he hires two workers. He is able to produce 4400 bushels of wheat when he hires three workers. How many bushels of wheat could the farmer produce when he hires four workers?

Select one:

a.6000

b.5800

c.5700

d.6400

Which of the following would be an example of an implicit cost of production?

Select one:

a.the cost of employee training programs

b.the cost of a delivery truck in a business that rarely makes deliveries

c.the cost of raw materials for producing bread in a bakery

d.the cost of lost income a student could have earned had they not gone to university

Assume a certain firm regards the number of workers it employs as variable. Under which of the following conditions is this variable assumption often realistic?

Select one:

a.If the size of its factory is not fixed, then it refers to the short run.

b.If the size of its factory is fixed, then it refers to the short run.

c.If the size of its factory is fixed, then it refers to the long run.

d.If the size of its factory is not fixed, then it refers to the short run and the long run.

What is the term for things that must be forgone to acquire a good?

Select one:

a.competitors

b.opportunity costs

c.substitutes

d.explicit costs

A certain firm manufactures and sells computer chips. Suppose that last year it sold four million chips at a price of $8 per chip. Which of the following terminology correctly accounts for the $32 million to this firm?

Select one:

a.Its total revenue amounted to $32 million.

b.Its explicit costs amounted to $32 million.

c.Its accounting profit amounted to $32 million.

d.Its economic profit amounted to $32 million.

John owns a shoe-shine business. Which of the following costs does his accountant most likely include on his financial statements?

Select one:

a.dividends John's money was earning in the stock market before John sold his shares and bought a shoe-shine booth

b.the cost of shoe polish

c.wages John could have earned for unclaimed overtime labour hours

d.wages John could earn washing windows

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's decision?

Select one:

a.A country's standard of living depends on its ability to produce goods and services.

b.Prices rise when the government prints too much money.

c.The cost of something is what you give up to get it.

d.Governments can sometimes improve market outcomes.

What is the fundamental reason that marginal cost eventually rises as output increases?

Select one:

a.rising average fixed cost

b.economies of scale

c.diseconomies of scale

d.diminishing marginal product

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

Select one:

a.variable cost

b.opportunity cost

c.total cost

d.fixed cost

Which assumption is often realistic for a firm in the short run?

Select one:

a.The firm can vary both the size of its factory and the number of workers it employs.

b.The firm can vary the number of workers it employs, but not the size of its factory.

c.The firm can vary the size of its factory, but not the number of workers it employs.

d.The firm can vary neither the size of its factory nor the number of workers it employs.

Zach took $500,000 out of the bank and used it to start his new cookie business. The bank account pays 4% interest per year. During the first year of his business, Zach sold 15,000 boxes of cookies for $3 per box. Also, during the first year, the cookie business incurred costs that required outlays of money amounting to $14,000. What was Zach's accounting profit for the year?

Select one:

a.-$455,000

b.-$56,000

c.$1000

d.$31,000

Average total cost is equal to

Select one:

a.average cost minus average quantity of output.

b.total cost divided by output.

c.average variable cost plus total fixed cost.

d.output divided by total variable cost.

How does the average-fixed-cost curve behave?

Select one:

a.It always declines with increased levels of output.

b.It always rises with increased levels of output.

c.It declines as long as it is above marginal cost.

d.It declines as long as it is below marginal cost.

When do constant returns to scale occur?

Select one:

a.when a firm's long-run average-cost curve is rising as output increases

b.when long-run total costs are constant as output increases

c.when long-run average total costs are constant as output increases

d.when a firm's long-run average-cost curve is falling as output increases

For a certain firm, the number of workers hired is the only variable input. When this firm's production function is illustrated on a graph, what is measured on the axes?

Select one:

a.The number of workers is measured on the horizontal axis, and profit is measured on the vertical axis.

b.The number of workers is measured on the horizontal axis, and the quantity of output is measured on the vertical axis.

c.The number of workers is measured on the horizontal axis, and total cost is measured on the vertical axis.

d.The number of workers is measured on the horizontal axis, and variable cost is measured on the vertical axis.

A total-cost curve shows

Select one:

a.the relationship between the total cost of production and total revenue.

b.the relationship between the total cost of production and profit.

c.the relationship between the quantity of an input used and the total cost of production.

d.the relationship between the quantity of output produced and the total cost of production.

Long-run average-total-cost curves are often U-shaped

Select one:

a.for the same reasons that short-run average-total-cost curves have the identical U-shape.

b.because of increasing coordination problems at low levels of production and increasing specialization of workers at high levels of production.

c.because of constant returns to scale.

d.because of increasing specialization of workers at low levels of production and increasing coordination problems at high levels of production.

What relationship does a production function measure?

Select one:

a.inputs and costs

b.inputs and profit

c.inputs and revenue

d.inputs and quantity of output

What is added to profit to obtain total revenue?

Select one:

a.total cost

b.net profit

c.capital profit

d.operational cost