Question 1

Andy wants to maximize his grade-point average. Having spent six hours studying for his final exam in economics, Andy calculates his grade and discovers that even with a perfect score on the final, he will not pass the course. He decides to study two more hours so he will not have wasted the first six hours. Is this a good decision? Why or why not?

Accepted Answer

The answer of Andy wants to maximize his grade-point average....

Question 2

Use the figure to answer the following question(s).
Figure 8-9 
-Using Figure 8-9, calculate the firm's approximate average total cost when it produces 50 units.

Accepted Answer

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

Question 3

Use the figure to answer the following question(s).
Figure 8-10 
-Using Figure 8-10, calculate the firm's approximate average total cost when it produces 12 units.

Accepted Answer

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

Question 4

Figure 8-7 
-Which of the following is true for Figure 8-7?

Accepted Answer

Firms producing output rates less than q₁ or more than q₂ will find it difficult to survive because they are likely operating outside the range of efficient production, where costs are minimized.

Question 5

James opened a baseball manufacturing operation, and initially the more balls he made, the lower the per-unit cost. Now, as output expands, his per-unit costs are rising. He concludes that diseconomies of scale have set in. Is he correct? Why?

Accepted Answer

The answer of James opened a baseball manufacturing operation, and...

Question 6

Use the figure to answer the following question(s).
Figure 8-10 
-In Figure 8-10, which output would minimize the firm's average total cost of production?

Accepted Answer

The firm's average total cost of production is minimized at the output level where the average total cost curve is at its lowest point, which is typically at the bottom of the U-shaped curve.

Question 7

Suppose you are planning to open a lemonade stand. List separately all the explicit and implicit costs that might be involved.

Accepted Answer

The answer of Suppose you are planning to open a...

Question 8

Use the figure to answer the following question(s).
Figure 8-9 
-Using Figure 8-9, calculate the firm's approximate total cost when average total cost is at a minimum.

Accepted Answer

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

Question 9

Use the figure to answer the following question(s).
Figure 8-11 
-Which of the following is true for a firm with the costs illustrated in Figure 8-11?

Accepted Answer

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

Question 10

Use the figure to answer the following question(s).
Figure 8-10 
-Using Figure 8-10, calculate the firm's approximate total cost when average total cost is at a minimum.

Accepted Answer

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

Question 11

Use the figure to answer the following question(s).
Figure 8-8 
-In Figure 8-8, which output level would be most closely associated with the point where diminishing marginal returns have begun?

Accepted Answer

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

Question 12

Mr. Jones pays his employees by the hour. He believes they purposely work slowly to maximize their personal satisfaction. What can he do to provide them with a stronger incentive to work efficiently?

Accepted Answer

The answer of Mr. Jones pays his employees by the...

Question 13

Figure 8-12 -In Figure 8-12, which of the following would most likely cause the average total cost curve of a firm producing molded plastic chairs to shift from ATC₁ to ATC₂?

Accepted Answer

An increase in the price of the plastic used to produce the chairs would increase production costs, causing the average total cost curve to shift upwards from ATC1 to ATC2.

Question 14

Use the figure to answer the following question(s).
Figure 8-11 
-The average variable cost (AVC) and average total cost (ATC) for a firm are indicated in Figure 8-11. The firm's total cost of producing 20 units is

Accepted Answer

The total cost (TC) is calculated by multiplying the average total cost (ATC) by the quantity produced. If the ATC is $6 for 20 units, then TC = 20 units * $6 = $120.

Question 15

The AB Manufacturing Company has hired an economist to evaluate its financial situation. She explains to the board of directors that the company is making zero economic profit. Should the company go out of business?

Accepted Answer

The answer of The AB Manufacturing Company has hired an...

Question 16

The boss observes that her 10 workers produce 1,000 widgets a day. She concludes that she can employ 20 workers and make 2,000 widgets, 30 to make 3,000, or 40 to make 4,000. Explain why this observation is either correct or incorrect.

Accepted Answer

The answer of The boss observes that her 10 workers...

Question 17

Kim used to work at "The Big One" accounting firm, and she earned $50,000 a year. She saved her money and has now invested $100,000 in her own firm. Profit is $20,000 a year, which Kim receives as her only compensation. She concludes that this is great because a 20 percent return is much better than the 8 percent she could get in another investment (the opportunity cost of the funds). What is wrong with this line of thinking?

Accepted Answer

The answer of Kim used to work at "The Big...

Question 18

Use the figure to answer the following question(s).
Figure 8-9 
-In Figure 8-9, which output would minimize the firm's average total cost of production?

Accepted Answer

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

Question 19

Use the figure to answer the following question(s).
Figure 8-8 
-In Figure 8-8, which output minimizes per-unit cost?

Accepted Answer

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

Question 20

Figure 8-13 
-Movement from point b to point c in Figure 8-13 indicates that the firm is experiencing

Accepted Answer

Movement from point b to point c indicates that the firm is experiencing diseconomies of scale, as it suggests an increase in average costs with increased production.

Quiz 8: Costs and the Supply of Goods

Use the figure to answer the following question(s) . Figure 8-9 -Using Figure 8-9, calculate the firm's approximate average total cost when it produces 50 units.

Use the figure to answer the following question(s) . Figure 8-10 -Using Figure 8-10, calculate the firm's approximate average total cost when it produces 12 units.

Figure 8-7 -Which of the following is true for Figure 8-7?

James opened a baseball manufacturing operation, and initially the more balls he made, the lower the per-unit cost. Now, as output expands, his per-unit costs are rising. He concludes that diseconomies of scale have set in. Is he correct? Why?

Use the figure to answer the following question(s) . Figure 8-10 -In Figure 8-10, which output would minimize the firm's average total cost of production?

Suppose you are planning to open a lemonade stand. List separately all the explicit and implicit costs that might be involved.

Use the figure to answer the following question(s) . Figure 8-9 -Using Figure 8-9, calculate the firm's approximate total cost when average total cost is at a minimum.

Use the figure to answer the following question(s) . Figure 8-11 -Which of the following is true for a firm with the costs illustrated in Figure 8-11?

Use the figure to answer the following question(s) . Figure 8-10 -Using Figure 8-10, calculate the firm's approximate total cost when average total cost is at a minimum.

Use the figure to answer the following question(s) . Figure 8-8 -In Figure 8-8, which output level would be most closely associated with the point where diminishing marginal returns have begun?

Mr. Jones pays his employees by the hour. He believes they purposely work slowly to maximize their personal satisfaction. What can he do to provide them with a stronger incentive to work efficiently?

Figure 8-12 -In Figure 8-12, which of the following would most likely cause the average total cost curve of a firm producing molded plastic chairs to shift from ATC₁ to ATC₂?

Use the figure to answer the following question(s) . Figure 8-11 -The average variable cost (AVC) and average total cost (ATC) for a firm are indicated in Figure 8-11. The firm's total cost of producing 20 units is

The AB Manufacturing Company has hired an economist to evaluate its financial situation. She explains to the board of directors that the company is making zero economic profit. Should the company go out of business?

The boss observes that her 10 workers produce 1,000 widgets a day. She concludes that she can employ 20 workers and make 2,000 widgets, 30 to make 3,000, or 40 to make 4,000. Explain why this observation is either correct or incorrect.

Use the figure to answer the following question(s) . Figure 8-9 -In Figure 8-9, which output would minimize the firm's average total cost of production?

Use the figure to answer the following question(s) . Figure 8-8 -In Figure 8-8, which output minimizes per-unit cost?

Figure 8-13 -Movement from point b to point c in Figure 8-13 indicates that the firm is experiencing

Quiz 8: Costs and the Supply of Goods

Use the figure to answer the following question(s) . Figure 8-9 -Using Figure 8-9, calculate the firm's approximate average total cost when it produces 50 units.

Use the figure to answer the following question(s) . Figure 8-10 -Using Figure 8-10, calculate the firm's approximate average total cost when it produces 12 units.

Figure 8-7 -Which of the following is true for Figure 8-7?

James opened a baseball manufacturing operation, and initially the more balls he made, the lower the per-unit cost. Now, as output expands, his per-unit costs are rising. He concludes that diseconomies of scale have set in. Is he correct? Why?

Use the figure to answer the following question(s) . Figure 8-10 -In Figure 8-10, which output would minimize the firm's average total cost of production?

Suppose you are planning to open a lemonade stand. List separately all the explicit and implicit costs that might be involved.

Use the figure to answer the following question(s) . Figure 8-9 -Using Figure 8-9, calculate the firm's approximate total cost when average total cost is at a minimum.

Use the figure to answer the following question(s) . Figure 8-11 -Which of the following is true for a firm with the costs illustrated in Figure 8-11?

Use the figure to answer the following question(s) . Figure 8-10 -Using Figure 8-10, calculate the firm's approximate total cost when average total cost is at a minimum.

Use the figure to answer the following question(s) . Figure 8-8 -In Figure 8-8, which output level would be most closely associated with the point where diminishing marginal returns have begun?

Mr. Jones pays his employees by the hour. He believes they purposely work slowly to maximize their personal satisfaction. What can he do to provide them with a stronger incentive to work efficiently?

Figure 8-12 -In Figure 8-12, which of the following would most likely cause the average total cost curve of a firm producing molded plastic chairs to shift from ATC1 to ATC2?

Use the figure to answer the following question(s) . Figure 8-11 -The average variable cost (AVC) and average total cost (ATC) for a firm are indicated in Figure 8-11. The firm's total cost of producing 20 units is

The AB Manufacturing Company has hired an economist to evaluate its financial situation. She explains to the board of directors that the company is making zero economic profit. Should the company go out of business?

The boss observes that her 10 workers produce 1,000 widgets a day. She concludes that she can employ 20 workers and make 2,000 widgets, 30 to make 3,000, or 40 to make 4,000. Explain why this observation is either correct or incorrect.

Use the figure to answer the following question(s) . Figure 8-9 -In Figure 8-9, which output would minimize the firm's average total cost of production?

Use the figure to answer the following question(s) . Figure 8-8 -In Figure 8-8, which output minimizes per-unit cost?

Figure 8-13 -Movement from point b to point c in Figure 8-13 indicates that the firm is experiencing

Figure 8-12 -In Figure 8-12, which of the following would most likely cause the average total cost curve of a firm producing molded plastic chairs to shift from ATC₁ to ATC₂?