Question 1

Fixed cost is sometimes referred to as

Accepted Answer

A)  sunk cost.
B)  variable cost.
C)  total cost.
D)  economic cost.
E)  accounting cost.F) A) and B)
G) A) and D)

Question 2

As long as there are __________ costs, we are in the short run.

Accepted Answer

A)  variable
B)  fixed
C)  marginal
D)  averageE) B) and D)
F) A) and C)

Question 3

As output rises,

Accepted Answer

A)  AFC rises.
B)  AFC falls.
C)  AFC remains the same.
D)  there is no way of determining what happens to AFC.E) A) and B)
F) A) and C)

Question 4

Use the following Table to answer the question :
-State the minimum points (in dollars and cents) of (a) the AVC, (b) the ATC.

Accepted Answer

(a) $1,665 (must be ...

Question 5

In the long run

Accepted Answer

A)  all costs become fixed.
B)  all costs become variable.
C)  all costs are a combination of fixed and variable.D) A) and C)
E) A) and B)

Question 6

Use the following figure to answer the question : 
-The AFC curve is curve

Accepted Answer

A)  W.
B)  X.
C)  Y.
D)  Z.E) B) and C)
F) A) and D)

Question 7

A variable input is an input that can change

Accepted Answer

A)  in the short run but not in the long run.
B)  in the long run but not in the short run.
C)  in both the long run and the short run.
D)  without changing the level of output.E) B) and C)
F) A) and C)

Question 8

Statement I: Average total cost can be found by dividing output by total cost. Statement II: At one unit of output marginal cost is always zero.

Accepted Answer

A)  Statement I is true and statement II is false.
B)  Statement II is true and statement I is false.
C)  Both statements are true.
D)  Both statements are false.E) A) and D)
F) A) and B)

Question 9

The word economists use when referring to "additional" or "incremental" units of output or costs is _________.

Accepted Answer

The answer of The word economists use when referring to...

Question 10

The decision to go out of business

Accepted Answer

A)  may be made only in the short run.
B)  may be made only in the long run.
C)  may be made in either the short run or the long run.D) A) and B)
E) B) and C)

Question 11

Which economist said, "In the long run, we are simply in another short run"?

Accepted Answer

A)  Adam Smith
B)  Abba Lerner
C)  Theordore K.Quinn
D)  Karl MarxE) A) and B)
F) None of the above

Question 12

Jimmy, Walter, Mike, and Bill run a school for political candidates. The school has fixed costs of $10 million, variable costs of $4 million, and total revenue of $15 million. In the short run the school will _____ and in the long run the school will ___.

Accepted Answer

A)  operate; stay in business
B)  operate; go out of business
C)  shut down; stay in business
D)  shut down; go out of businessE) A) and D)
F) C) and D)

Question 13

In the short run, output

Accepted Answer

A)  can be varied by changing the size of factories.
B)  can be varied by changing the amount of equipment in factories.
C)  can be varied by using the factories and equipment in the industry with more or less of other inputs.
D)  cannot be varied because inputs are fixed.E) B) and C)
F) None of the above

Question 14

Use the following figure to answer the question : 
-Who said "Work expands so as to fill the time available for its completion," and "Work expands to occupy people available for its completion"?

Accepted Answer

A)  Adam Smith
B)  C.Northcote Parkinson
C)  Karl Marx
D)  John Maynard Keynes
E)  Alfred MarshallF) B) and C)
G) All of the above

Question 15

Use the following Table to answer the question :
-Negative returns set in with the _____ worker.

Accepted Answer

The answer of Use the following Table to answer the...

Question 16

Fixed costs are best defined as

Accepted Answer

A)  costs that will not vary with the firm's output level over some period of time.
B)  costs that are paid on a yearly basis rather than a weekly or monthly basis.
C)  costs of inputs that cannot be moved, such as real estate.
D)  costs that will last as long as the firm exists.E) B) and C)
F) None of the above

Question 17

Statement I: Average fixed cost at an output of 4 is double average fixed cost at an output of 8. Statement II: If average variable cost is rising, average total cost may be falling.

Accepted Answer

A)  Statement I is true and statement II is false.
B)  Statement II is true and statement I is false.
C)  Both statements are true.
D)  Both statements are false.E) C) and D)
F) A) and D)

Question 18

The basic characteristic of the short run is that

Accepted Answer

A)  a firm does not have sufficient time to change the amounts of any of the resources it employs.
B)  the firm does not have sufficient time to cut its rate of output to zero.
C)  the firm does not have sufficient time to change the size of its plant.
D)  the time frame is sufficient to allow new firms to enter the industry.E) A) and B)
F) A) and C)

Question 19

Use the following figure to answer the question : 
-If you wanted to produce an output of 7,000, in the long run you would choose a plant whose size was represented by

Accepted Answer

A)  ATC1.
B)  ATC2.
C)  ATC3.
D)  ATC4.
E)  ATC5.F) C) and D)
G) All of the above

Question 20

George and Dick's used car lot has a total revenue of $5 million, fixed costs of $8 million, and variable costs of $6 million. In the short run the firm will _______, and in the long run it will _______.

Accepted Answer

A)  shut down; go out of business
B)  shut down; stay in business
C)  operate; stay in business
D)  operate; go out of businessE) A) and B)
F) None of the above

Exam 8: Cost

Fixed costs are best defined as

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Use the following figure to answer the question : -The AFC curve is curve

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The decision to go out of business

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The basic characteristic of the short run is that

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Use the following Table to answer the question : -Negative returns set in with the _____ worker.

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The word economists use when referring to "additional" or "incremental" units of output or costs is _________.

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In the short run, output

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Which economist said, "In the long run, we are simply in another short run"?

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Statement I: Average total cost can be found by dividing output by total cost. Statement II: At one unit of output marginal cost is always zero.

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Use the following figure to answer the question : -Who said "Work expands so as to fill the time available for its completion," and "Work expands to occupy people available for its completion"?

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George and Dick's used car lot has a total revenue of $5 million, fixed costs of $8 million, and variable costs of $6 million. In the short run the firm will _______, and in the long run it will _______.

Correct AnswerverifiedShow Answer

Use the following Table to answer the question : -State the minimum points (in dollars and cents) of (a) the AVC, (b) the ATC.

Correct Answerverified(a) $1,665 (must be ...View AnswerShow Answer

In the long run

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Use the following figure to answer the question : -If you wanted to produce an output of 7,000, in the long run you would choose a plant whose size was represented by

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Fixed cost is sometimes referred to as

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A variable input is an input that can change

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Jimmy, Walter, Mike, and Bill run a school for political candidates. The school has fixed costs of $10 million, variable costs of $4 million, and total revenue of $15 million. In the short run the school will _____ and in the long run the school will ___.

Correct AnswerverifiedShow Answer

As long as there are __________ costs, we are in the short run.

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As output rises,

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Statement I: Average fixed cost at an output of 4 is double average fixed cost at an output of 8. Statement II: If average variable cost is rising, average total cost may be falling.

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George and Dick's used car lot has a total revenue of $5 million, fixed costs of $8 million, and variable costs of $6 million. In the short run the firm will _, and in the long run it will _.

Correct Answer
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(a) $1,665 (must be ...
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Jimmy, Walter, Mike, and Bill run a school for political candidates. The school has fixed costs of $10 million, variable costs of $4 million, and total revenue of $15 million. In the short run the school will ___ and in the long run the school will _.

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