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Exam 13: The Costs of Production

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Question 151

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The firm's efficient scale is the quantity of output that minimizes

A) average total cost.
B) average fixed cost.
C) average variable cost.
D) marginal cost.

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Question 152

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Economic profit is greater than or equal to accounting profit.

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Question 153

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In some cases, specialization allows larger factories to produce goods at a lower average cost than smaller factories.

Figure 1 b. Figure 2 c. Figure 3 d. Figure 4 ANSWER: a DIFFICULTY: Moderate LEARNING OBJECTIVES: ECON.MANK.252 - Given data on a firm's cost structure, calculate the firm's marginal cost at different quantities. TOPICS: Producer theory Production costs KEYWORDS: BLOOM'S: Comprehension CUSTOM ID: 177.13.3 - MC - MANK08 -Refer to Figure 13-7. Which of the figures represents the production function for a typical firm?

Total revenue minus only implicit costs is called

The Wacky Widget company has total fixed costs of $100,000 per year. The firm's average variable cost is $10 for 10,000 widgets. At that level of output, the firm's average total costs equal

When marginal cost exceeds average total cost,

In his book, An Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith described a visit he made to a

Implicit costs

A student might describe information about the costs of production as

The opportunity cost of capital is an implicit cost almost every business incurs.

​​​Table 13-7 -​Refer to Table 13-7. ​What is total output when 1 worker is hired?

The marginal-cost curve intersects the average-total-cost curve at the minimum point of the marginal-cost curve.

Table 13-5 -Refer to Table 13-5. The marginal product of the fourth worker is

Table 13-12 Eileen's Elegant Earrings produces pairs of earrings for its mail order catalogue business. Each pair is shipped in a separate box. She rents a small room for $150 a week in the downtown business district that serves as her factory. She can hire workers for $275 a week. There are no implicit costs. -Refer to Table 13-12. What is the marginal product of the second worker?

Jamar used to work as an office manager, earning $40,000 per year. He gave up that job to start a life-coaching business. In calculating the economic profit of his life-coaching business, the $40,000 income that he gave up is counted as part of the life-coaching business's

When a firm's only variable input is labor, then the slope of the production function measures the

Adam Smith used a famous example of what type of firm to illustrate economies of scale?

The average-total-cost curve is unaffected by diminishing marginal product.

Figure 13-5 -Refer to Figure 13-5. Which of the curves is most likely to represent average fixed cost?