WorksheetsReview Chapter 13
Total questions: 20
Worksheet time: 10mins
Economists normally assume that the goal of a firm is to
maximize its total revenue
maximize its profit
minimize its explicit costs
minimize its total cost
The amount of money that a firm pays to buy inputs is called
total cost
variable cost
marginal cost
fixed cost
Kirsten sells 300 glasses of lemonade at $0.50 each. Her total costs are $125. Her profits are
$25
$124.50
$125
$150
An example of an opportunity cost that is also an implicit cost is
a lease payment
the cost of raw materials
the value of the business owner’s time
All of the above are correct
Scenario 13-4
Wanda owns a lemonade stand. She produces lemonade using five inputs: water, sugar, lemons, paper cups, and labor. Her costs per glass are as follows: $0.01 for water, $0.02 for sugar, $0.03 for lemons, $0.02 for cups, and $0.10 for the opportunity cost of her labor. She can sell 300 glasses for $0.50 each.
Refer to Scenario 13-4. What are Wanda’s explicit costs per glass?
$0.18
$0.10
$0.08
$0.02
Scenario 13-4
Wanda owns a lemonade stand. She produces lemonade using five inputs: water, sugar, lemons, paper cups, and labor. Her costs per glass are as follows: $0.01 for water, $0.02 for sugar, $0.03 for lemons, $0.02 for cups, and $0.10 for the opportunity cost of her labor. She can sell 300 glasses for $0.50 each.
Refer to Scenario 13-4. What are Wanda’s implicit costs per glass?
$0.18
$0.10
$0.08
$0.02
Scenario 13-4
Wanda owns a lemonade stand. She produces lemonade using five inputs: water, sugar, lemons, paper cups, and labor. Her costs per glass are as follows: $0.01 for water, $0.02 for sugar, $0.03 for lemons, $0.02 for cups, and $0.10 for the opportunity cost of her labor. She can sell 300 glasses for $0.50 each.
Refer to Scenario 13-4. What are Wanda’s total costs per glass?
$0.18
$0.10
$0.08
$0.02
Scenario 13-4
Wanda owns a lemonade stand. She produces lemonade using five inputs: water, sugar, lemons, paper cups, and labor. Her costs per glass are as follows: $0.01 for water, $0.02 for sugar, $0.03 for lemons, $0.02 for cups, and $0.10 for the opportunity cost of her labor. She can sell 300 glasses for $0.50 each.
Refer to Scenario 13-4. What are Wanda’s total accounting profits?
$150
$126
$96
$24
Scenario 13-4
Wanda owns a lemonade stand. She produces lemonade using five inputs: water, sugar, lemons, paper cups, and labor. Her costs per glass are as follows: $0.01 for water, $0.02 for sugar, $0.03 for lemons, $0.02 for cups, and $0.10 for the opportunity cost of her labor. She can sell 300 glasses for $0.50 each.
Refer to Scenario 13-4. What are Wanda’s total economic profits?
$150
$126
$96
$54
Which of the following is the best example of a variable cost?
monthly wage payments for hired labor
annual property tax payments for a building
monthly rent payments for a warehouse
annual insurance payments for a warehouse
Refer to Table 13-7. The average fixed cost of producing five widgets is
$1.00
$2.00
$3.00
$5.00
Refer to Table 13-7. The average variable cost of producing four widgets is
$2.00
$2.50
$3.33
$5.00
Refer to Table 13-7. The average total cost of producing one widget is
$1.00
$10.00
$11.00
$22.00
Refer to Table 13-7. The marginal cost of producing the sixth widget is
$1.00
$3.50
$5.00
$6.00
Refer to Table 13-7. What is the variable cost of producing zero widgets?
$0.00
$1.00
$10.00
$5.00
One assumption that distinguishes short-run cost analysis from long-run cost analysis for a profit-maximizing firm is that in the short run,
output is not variable
the number of workers used to produce the firm's product is fixed
the size of the factory is fixed
there are no fixed costs
Economies of scale occur when a firm’s
marginal costs are constant as output increases
long-run average total costs are decreasing as output increases
long-run average total costs are increasing as output increases
marginal costs are equal to average total costs for all levels of output
In the long run Firm A incurs total costs of $1,050 when output is 30 units and $1,200 when output is 40 units. Firm A exhibits
diseconomies of scale because total cost is rising as output rises
diseconomies of scale because average total cost is rising as output rises
economies of scale because total cost is rising as output rises
economies of scale because average total cost is falling as output rises
Refer to Figure 13-9. Which of the curves is most likely to characterize the short-run average total cost curve of the smallest factory?
ATCA
ATCB
ATCC
ATCD
Refer to Figure 13-9. Which curve represents the long-run average total cost?
ATCA
ATCB
ATCC
ATCD
