Question 1

Figure 13-5 
-Refer to Figure 13-5.Why doesn't the total cost curve begin at the origin (the point 0,0)?

Accepted Answer

The total cost curve does not begin at the origin because fixed costs are positive when output is zero. Fixed costs are the costs that a firm must pay regardless of the level of output, such as rent or equipment. These costs must be paid even if the firm produces nothing, which is why the total cost curve starts above the origin at the point where fixed costs are incurred.

Question 2

Scenario 13-8
Suppose that a given firm experiences decreasing marginal product of labor with the addition of each worker regardless of the current output level.
-Refer to Scenario 13-8.Average fixed cost will be

Accepted Answer

Average fixed cost (AFC) falls as output increases because fixed costs are spread over more units of output, regardless of the marginal product of labor.

Question 3

Figure 13-4 
-Refer to Figure 13-4.Which of the curves is most likely to represent average fixed cost?

Accepted Answer

Average fixed cost (AFC) is always declining as output increases because it is the total fixed cost divided by the quantity produced. As output increases, the fixed cost is spread over a larger number of units, causing AFC to decrease. Curve A shows a declining trend, which is consistent with the concept of average fixed cost.

Question 4

Figure 13-6 
-The marginal cost curve crosses the average total cost curve at

Accepted Answer

The answer of Figure 13-6 
-The marginal cost curve crosses...

Question 5

Figure 13-4 
-Refer to Figure 13-4.Curve A is always declining because of

Accepted Answer

Curve A represents average fixed cost, which declines as output increases because fixed costs are spread over a larger number of units.

Question 6

Scenario 13-8
Suppose that a given firm experiences decreasing marginal product of labor with the addition of each worker regardless of the current output level.
-Refer to Scenario 13-8.Average total cost will be

Accepted Answer

Average total cost is typically U-shaped because initially, as output increases, average total cost decreases due to spreading fixed costs over more units. However, as the firm experiences decreasing marginal product of labor, variable costs increase, causing average total cost to eventually rise.

Question 7

Figure 13-6 
-Refer to Figure 13-6.Which of the figures represents the production function for a firm?

Accepted Answer

The answer of Figure 13-6 
-Refer to Figure 13-6.Which of...

Question 8

Figure 13-6 
-Refer to Figure 13-6.Which of the figures represents the total cost curve for a firm?

Accepted Answer

The answer of Figure 13-6 
-Refer to Figure 13-6.Which of...

Question 9

Figure 13-5 
-Refer to Figure 13-5.Which of the following can be inferred from the figure above?

Accepted Answer

The answer of Figure 13-5 
-Refer to Figure 13-5.Which of...

Question 10

The minimum points of the average variable cost and average total cost curves occur where

Accepted Answer

The minimum points of the average variable cost and average total cost curves occur where the marginal cost curve intersects those curves. This is because when the marginal cost curve intersects the average variable cost and average total cost curves at their minimum points, it is equal to the average variable cost and average total cost, meaning that there is no further decrease in cost when producing an additional unit of output. Thus, this is the point where firms want to produce to maximize their profits.

Question 11

Scenario 13-8
Suppose that a given firm experiences decreasing marginal product of labor with the addition of each worker regardless of the current output level.
-Refer to Scenario 13-8.Average variable cost will be

Accepted Answer

When a firm experiences decreasing marginal product of labor, it means that each additional worker contributes less to output than the previous one. This leads to increasing marginal costs, which in turn causes average variable costs to rise as more output is produced.

Question 12

Figure 13-4 
-Refer to Figure 13-4.Which curve is most likely to represent marginal cost?

Accepted Answer

The answer of Figure 13-4 
-Refer to Figure 13-4.Which curve...

Question 13

Figure 13-4 
-Refer to Figure 13-4.Curve D is increasing because of

Accepted Answer

The answer of Figure 13-4 
-Refer to Figure 13-4.Curve D...

Question 14

Figure 13-4 
-Refer to Figure 13-4.Curve A represents which type of cost curve?

Accepted Answer

The answer of Figure 13-4 
-Refer to Figure 13-4.Curve A...

Question 15

Figure 13-4 
-Refer to Figure 13-4.Curve D intersects curve C

Accepted Answer

Curve D intersects curve C at the efficient scale, where the firm produces output at the minimum average total cost. This point represents the optimal level of production for the firm, where it can minimize its costs and maximize its profits. Therefore, the best choice is C.

Question 16

Scenario 13-8
Suppose that a given firm experiences decreasing marginal product of labor with the addition of each worker regardless of the current output level.
-Refer to Scenario 13-8.Marginal cost will be

Accepted Answer

Since the firm is experiencing decreasing marginal product of labor, the additional cost per unit of output will increase with each additional unit of labor, leading to rising marginal cost at all points.

Question 17

Figure 13-6 
-Refer to Figure 13-6.Which of the figures represents the marginal cost curve for a firm?

Accepted Answer

The marginal cost curve for a firm typically has a U-shape, which is represented by Figure 1. This shape reflects initially decreasing marginal costs due to increasing returns, followed by increasing marginal costs due to diminishing returns.

Question 18

Figure 13-4 
-Refer to Figure 13-4.Which curve is most likely to represent average total cost?

Accepted Answer

The average total cost curve typically has a U-shape due to economies and diseconomies of scale, which is most likely represented by curve C.

Question 19

Figure 13-4 
-Refer to Figure 13-4.Curve C represents which type of cost curve?

Accepted Answer

Curve C represents the average total cost curve, which is the sum of average variable cost and average fixed cost.

Question 20

Figure 13-4 
-Refer to Figure 13-4.Curve D represents which type of cost curve?

Accepted Answer

The answer of Figure 13-4 
-Refer to Figure 13-4.Curve D...

Quiz 13: The Costs of Production

Figure 13-5 -Refer to Figure 13-5.Why doesn't the total cost curve begin at the origin (the point 0,0) ?

Scenario 13-8 Suppose that a given firm experiences decreasing marginal product of labor with the addition of each worker regardless of the current output level. -Refer to Scenario 13-8.Average fixed cost will be

Figure 13-4 -Refer to Figure 13-4.Which of the curves is most likely to represent average fixed cost?

Figure 13-6 -The marginal cost curve crosses the average total cost curve at

Figure 13-4 -Refer to Figure 13-4.Curve A is always declining because of

Scenario 13-8 Suppose that a given firm experiences decreasing marginal product of labor with the addition of each worker regardless of the current output level. -Refer to Scenario 13-8.Average total cost will be

Figure 13-6 -Refer to Figure 13-6.Which of the figures represents the production function for a firm?

Figure 13-6 -Refer to Figure 13-6.Which of the figures represents the total cost curve for a firm?

Figure 13-5 -Refer to Figure 13-5.Which of the following can be inferred from the figure above?

The minimum points of the average variable cost and average total cost curves occur where

Scenario 13-8 Suppose that a given firm experiences decreasing marginal product of labor with the addition of each worker regardless of the current output level. -Refer to Scenario 13-8.Average variable cost will be

Figure 13-4 -Refer to Figure 13-4.Which curve is most likely to represent marginal cost?

Figure 13-4 -Refer to Figure 13-4.Curve D is increasing because of

Figure 13-4 -Refer to Figure 13-4.Curve A represents which type of cost curve?

Figure 13-4 -Refer to Figure 13-4.Curve D intersects curve C

Scenario 13-8 Suppose that a given firm experiences decreasing marginal product of labor with the addition of each worker regardless of the current output level. -Refer to Scenario 13-8.Marginal cost will be

Figure 13-6 -Refer to Figure 13-6.Which of the figures represents the marginal cost curve for a firm?

Figure 13-4 -Refer to Figure 13-4.Which curve is most likely to represent average total cost?

Figure 13-4 -Refer to Figure 13-4.Curve C represents which type of cost curve?

Figure 13-4 -Refer to Figure 13-4.Curve D represents which type of cost curve?