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PRODUCTION AND COSTSSAMPLE QUESTIONS ON SHORT-TERM COSTSAP Economics
Mr. Bordelon
For Heidi, the marginal cost of producing one additional photograph equals the change in _____ divided by the change in the _____.
a. total cost; number of photographs
b. marginal cost; number of photographs
c. total cost; marginal product of photographs
d. average cost; number of photographs
e. average cost; price of photographs
For Heidi, the marginal cost of producing one additional photograph equals the change in _____ divided by the change in the _____.
a. total cost; number of photographs
b. marginal cost; number of photographs
c. total cost; marginal product of photographs
d. average cost; number of photographs
e. average cost; price of photographs
When a cherry orchard in Oregon adds an additional worker, the total cost of production increases by $24,000. Adding the worker increases total cherry output by 600 pounds. Therefore, the marginal cost of the last pound of cherries produced is:
a. $40.
b. $19.
c. $4,000.
d. $24,000.
e. $60.
When a cherry orchard in Oregon adds an additional worker, the total cost of production increases by $24,000. Adding the worker increases total cherry output by 600 pounds. Therefore, the marginal cost of the last pound of cherries produced is:
a. $40.
b. $19.
c. $4,000.
d. $24,000.
e. $60.
When a firm produces a small amount of output, the spreading effect:
a. is stronger than the diminishing returns effect.
b. is weaker than the diminishing returns effect.
c. and diminishing returns effect are equal.
d. will be zero.
e. contributes to a vertical short-run average total cost curve.
When a firm produces a small amount of output, the spreading effect:
a. is stronger than the diminishing returns effect.
b. is weaker than the diminishing returns effect.
c. and diminishing returns effect are equal.
d. will be zero.
e. contributes to a vertical short-run average total cost curve.
The vertical difference between curve B and curve C at any quantity of output is:
a. marginal cost.
b. fixed cost.
c. average fixed cost.
d. average variable cost.
e. profit.
The vertical difference between curve B and curve C at any quantity of output is:
a. marginal cost.
b. fixed cost.
c. average fixed cost.
d. average variable cost.
e. profit.
When marginal cost is below average variable cost, average variable cost must be:
a. at its minimum.
b. at its maximum.
c. falling.
d. rising.
e. equal to zero.
When marginal cost is below average variable cost, average variable cost must be:
a. at its minimum.
b. at its maximum.
c. falling.
d. rising.
e. equal to zero.
Suppose Bonnie spends $300 per month to rent the building, $100 per month to pay for insurance for her business, and $100 per worker per month for every worker she hires. Given this information, Bonnie’s fixed costs equal:
a. $400.
b. $300.
c. $500.
d. $100.
e. $600.
Suppose Bonnie spends $300 per month to rent the building, $100 per month to pay for insurance for her business, and $100 per worker per month for every worker she hires. Given this information, Bonnie’s fixed costs equal:
a. $400.
b. $300.
c. $500.
d. $100.
e. $600.
The table provides information about the production function for Lindsay’s Farm, which uses labor and land to produce its produce. The price of labor is $50 per worker per week and the price of land is $20 per acre.
Lindsey’s variable cost of production:
a. stay constant.
b. are equal to 10.
c. equal zero when she produces zero bushels of produce.
d. fall as soon as she starts producing.
e. equal $100 when 3 workers are employed.
Quantity of Land Quantity of Labor Quantity of Produce
10 0 0
10 1 50
10 2 100
10 3 140
10 4 170
10 5 190
The table provides information about the production function for Lindsay’s Farm, which uses labor and land to produce its produce. The price of labor is $50 per worker per week and the price of land is $20 per acre.
Lindsey’s variable cost of production:
a. stay constant.
b. are equal to 10.
c. equal zero when she produces zero bushels of produce.
d. fall as soon as she starts producing.
e. equal $100 when 3 workers are employed.
Quantity of Land Quantity of Labor Quantity of Produce
10 0 0
10 1 50
10 2 100
10 3 140
10 4 170
10 5 190
The table provides information about the production function for Lindsay’s Farm, which uses labor and land to produce its produce. The price of labor is $50 per worker per week and the price of land is $20 per acre.
When she hires 4 workers, Lindsey’s variable cost of production is:
a. $50.
b. $20.
c. $200.
d. $250.
e. $170.
Quantity of Land Quantity of Labor Quantity of Produce
10 0 0
10 1 50
10 2 100
10 3 140
10 4 170
10 5 190
The table provides information about the production function for Lindsay’s Farm, which uses labor and land to produce its produce. The price of labor is $50 per worker per week and the price of land is $20 per acre.
When she hires 4 workers, Lindsey’s variable cost of production is:
a. $50.
b. $20.
c. $200.
d. $250.
e. $170.
Quantity of Land Quantity of Labor Quantity of Produce
10 0 0
10 1 50
10 2 100
10 3 140
10 4 170
10 5 190
The table provides information about the production function for Lindsay’s Farm, which uses labor and land to produce its produce. The price of labor is $50 per worker per week and the price of land is $20 per acre.
When Lindsay decides to produce 50 units of produce she finds her total cost is equal to:
a. $150.
b. $50.
c. $200.
d. $350.
e. $250.
Quantity of Land Quantity of Labor Quantity of Produce
10 0 0
10 1 50
10 2 100
10 3 140
10 4 170
10 5 190
The table provides information about the production function for Lindsay’s Farm, which uses labor and land to produce its produce. The price of labor is $50 per worker per week and the price of land is $20 per acre.
When Lindsay decides to produce 50 units of produce she finds her total cost is equal to:
a. $150.
b. $50.
c. $200.
d. $350.
e. $250.
Quantity of Land Quantity of Labor Quantity of Produce
10 0 0
10 1 50
10 2 100
10 3 140
10 4 170
10 5 190
