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Production and Costs13

CLICKER QUESTIONS

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Production and Costs14

CLICKER QUESTIONS

Click on the button to go to the QuestionClick on the button to go to the problem

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Question 1

Question 2

Question 3

Question 4

Question 5

Question 7

Question 8

Question 6 Question 9

Question 10

Checkpoint 14.1

Checkpoint 14.2

Checkpoint 14.4Checkpoint 14.3

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CHECKPOINT 14.1

A. wages paid to employeesB. interest paid to a bank on a building loanC. the cost of the firm using capital that is owned by the

entrepreneur of the firmD. dollars paid to a supplier for materials used in productionE. liability insurance payments made only once a year

Question 1Which of the following is an example of an implicit cost?

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CHECKPOINT 14.1

A. the cost of labor and materialsB. the implicit costs of the businessC. all of the firm's costs including its normal profit and its

economic profitD. the cost of all the factors of production the firm employsE. the firm’s explicit costs

Question 2For a business, opportunity cost equals ____________.

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CHECKPOINT 14.2

A. 30 cars a dayB. 33 cars a dayC. 5 cars a dayD. 5.5 cars a dayE. 3 cars a day

Question 3If 5 workers can wash 30 cars a day and 6 workers can wash 33 cars a day, then the marginal product of the 6th worker equals ________.

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CHECKPOINT 14.2

A. average product of a worker is less than the average product of the previous worker

B. marginal product of a worker exceeds the marginal product of the previous worker

C. average product of labor is at a maximumD. marginal product of labor exceeds the average product of

labor. E. marginal product of labor is at a maximum

Question 4Increasing marginal returns occur when the _________.

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CHECKPOINT 14.2

A. marginal product increasesB. average product exceeds marginal productC. marginal product is less than average productD. marginal product exceeds average productE. total product increases

Question 5Average product increases if _________.

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CHECKPOINT 14.3

A. annual insurance for the hot dog standB. cost of buying the hot dog standC. cost of the hot dogs and condimentsD. interest he pays on the funds he borrowed to pay for

advertisingE. revenue he gets when he sells his first hot dog each day

Question 6Jay set up his hot dog stand near the business district. His total variable cost includes the _______.

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CHECKPOINT 14.3

A. returns from labor increase regardless of the number of workers employed

B. returns from labor eventually decrease as more workers are employed

C. the price of the good fall as output of the good increasesD. the average fixed cost increases as more output is

produced.E. the variable cost decreases as more output is produced

Question 7One reason the ATC curve is U-shaped is that _____.

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CHECKPOINT 14.3

A. the AFC curve shifts upwardB. the AVC curve doesn’t change, but ATC shifts upwardC. the MC curve remains the same, but the AVC curve shift

upwardD. both the MC curve and the AVC curve shift upwardE. both the AFC curve and the ATC curve shift upward

Question 8If the wage rate paid to workers increases, then _____.

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CHECKPOINT 14.4

A. marginal cost decreases as output increasesB. output is increased by increasing all inputs by the same

percentage and total cost increases by smaller percentageC. marginal product increases as labor increases with capital

unchangedD. a firm increases its plant size and labor by the same

percentage, but its output increases by a larger percentageE. marginal product increases as the firm increases its plant

size

Question 9Economies of scale occur whenever ________.

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CHECKPOINT 14.4

A. ATC1

B. ATC2

C. ATC3

D. ATC4

E. either ATC1 or ATC4

Question 10The figure shows four ATC curves of a firm. If the firm produces 3,000 units per day, in the long run, it will use the plant size that corresponds to _______.