TEST BANK FOR PRINCIPLES OF MICROECONOMICS
3E BY OPENSTAX | ALL CHAPTERS (NEWEST EDITION)
2024
The amount of money that a firm receives from the sale of its
output is called - CORRECT ANSWER >>total revenue
Total revenue equals - CORRECT ANSWER >>total output
multiplied by price per unit of output
explicit costs - CORRECT ANSWER >>require an outlay of
money by the firm
Which of the following is an implicit cost?
(i) the owner of a firm forgoing an opportunity to earn a large
salary working for a Wall Street brokerage firm
(ii) interest paid on the firm's debt
(iii) rent paid by the firm to lease office space
a. (ii) and (iii)
b. (i) and (iii)
c. (i) only
d. all of the above are correct - CORRECT ANSWER >>c. (i) only
John owns a shoe-shine business. His accountant most likely
includes which of the following costs on his financial statements?
a. wages John could earn washing windows
b. dividends John's money was earning in the stock market before
John sold his stock and bought a shoe-shine booth
c. the cost of shoe polish
d. all of the above are correct - CORRECT ANSWER >>c. the
cost of shoe polish
,The amount of money that a wheat farmer could have earned if
he had planted barley instead of wheat is - CORRECT ANSWER
>>an implicit cost
Economic profit is equal to
(i) total revenue - (explicit costs + implicit costs)
(ii) total revenue - opportunity costs
(iii) accounting profit + implicit costs - CORRECT ANSWER >>(i)
and (ii)
accounting profit is equal to
(i) total revenue - implicit costs
(ii) total revenue - opportunity costs
(iii) economic profit + implicit costs - CORRECT ANSWER >>(iii)
only
Economic profit - CORRECT ANSWER >>will never exceed
accounting profit
Economists normally assume that the goal of a firm is to -
CORRECT ANSWER >>maximize its profit
a production function is a relationship between - CORRECT
ANSWER >>inputs and quantity of output
the marginal product of labor is equal to the - CORRECT
ANSWER >>increase in output obtained from a one unit increase
in labor
one would expect to observe diminishing marginal product of
labor when - CORRECT ANSWER >>crowded office space
reduces the productivity of new workers
,Which of these assumption is often realistic for s firm in the short
run?
a. the firm can vary both the size of its factory and the number of
workers it employs
b. the firm can vary the size of its factory, but not the number of
workers it employs
c. the firm can vary the number of workers it employs, but not the
size of its factory
d. the firm can vary neither the size of its factory not the number
of workers it employs - CORRECT ANSWER >>c. the firm can
vary the number of workers it employs, but not the size of its
factory
For a certain firm, the number of workers hired is the only variable
input. When this firm's production function is illustrated on a
graph? - CORRECT ANSWER >>the number of workers is
measured on the horizontal axis and the quantity of output is
measured on the vertical axis
When a firm's only variable input is labor, then the slope of the
production function measures the - CORRECT ANSWER
>>marginal product of labor
Let L represent the number of workers hired by a firm, and let Q
represent that firm's quantity of output. Assume two points on the
firm's production function are (L = 12, Q = 122) and (L = 13, Q =
132). Then the marginal product of the 13th worker is
a. 8 units of output.
b. 10 units of output.
c. 122 units of output.
d. 132 units of output. - CORRECT ANSWER >>a. 8 units of
output
, Fixed costs can be defined as costs that - CORRECT ANSWER
>>are incurred even if nothing is produced
average total cost is equal to - CORRECT ANSWER >>total
cost/output
marginal cost equals
(i) change in total cost divided by change in quantity produced
(ii) change in variable cost divided by change in quantity produced
(iii) the average fixed cost of the current unit - CORRECT
ANSWER >>(i) an (ii)
Marginal cost tells us the - CORRECT ANSWER >>amount by
which total cost rises when output is increased by one unit
Marginal cost is equal to averaged total cost when - CORRECT
ANSWER >>average total cost is at its minimum
Refer to Table 13-1. The average fixed cost of producing five
widgets is - CORRECT ANSWER >>$2.00
Refer to Table 13-1. the average variable cost of producing four
widgets is - CORRECT ANSWER >>$2.50
Refer to Table 13-1. The average total cost of producing one
widget is - CORRECT ANSWER >>$11.00
Refer to Table 13-1. The marginal cost of producing the sixth
widget is - CORRECT ANSWER >>$6.00
Refer to table 13-1. What is the variable cost of producing zero
widgets? - CORRECT ANSWER >>$0
Refer to Table 13-1. What is the marginal cost of producing the
first widget? - CORRECT ANSWER >>$1.00
3E BY OPENSTAX | ALL CHAPTERS (NEWEST EDITION)
2024
The amount of money that a firm receives from the sale of its
output is called - CORRECT ANSWER >>total revenue
Total revenue equals - CORRECT ANSWER >>total output
multiplied by price per unit of output
explicit costs - CORRECT ANSWER >>require an outlay of
money by the firm
Which of the following is an implicit cost?
(i) the owner of a firm forgoing an opportunity to earn a large
salary working for a Wall Street brokerage firm
(ii) interest paid on the firm's debt
(iii) rent paid by the firm to lease office space
a. (ii) and (iii)
b. (i) and (iii)
c. (i) only
d. all of the above are correct - CORRECT ANSWER >>c. (i) only
John owns a shoe-shine business. His accountant most likely
includes which of the following costs on his financial statements?
a. wages John could earn washing windows
b. dividends John's money was earning in the stock market before
John sold his stock and bought a shoe-shine booth
c. the cost of shoe polish
d. all of the above are correct - CORRECT ANSWER >>c. the
cost of shoe polish
,The amount of money that a wheat farmer could have earned if
he had planted barley instead of wheat is - CORRECT ANSWER
>>an implicit cost
Economic profit is equal to
(i) total revenue - (explicit costs + implicit costs)
(ii) total revenue - opportunity costs
(iii) accounting profit + implicit costs - CORRECT ANSWER >>(i)
and (ii)
accounting profit is equal to
(i) total revenue - implicit costs
(ii) total revenue - opportunity costs
(iii) economic profit + implicit costs - CORRECT ANSWER >>(iii)
only
Economic profit - CORRECT ANSWER >>will never exceed
accounting profit
Economists normally assume that the goal of a firm is to -
CORRECT ANSWER >>maximize its profit
a production function is a relationship between - CORRECT
ANSWER >>inputs and quantity of output
the marginal product of labor is equal to the - CORRECT
ANSWER >>increase in output obtained from a one unit increase
in labor
one would expect to observe diminishing marginal product of
labor when - CORRECT ANSWER >>crowded office space
reduces the productivity of new workers
,Which of these assumption is often realistic for s firm in the short
run?
a. the firm can vary both the size of its factory and the number of
workers it employs
b. the firm can vary the size of its factory, but not the number of
workers it employs
c. the firm can vary the number of workers it employs, but not the
size of its factory
d. the firm can vary neither the size of its factory not the number
of workers it employs - CORRECT ANSWER >>c. the firm can
vary the number of workers it employs, but not the size of its
factory
For a certain firm, the number of workers hired is the only variable
input. When this firm's production function is illustrated on a
graph? - CORRECT ANSWER >>the number of workers is
measured on the horizontal axis and the quantity of output is
measured on the vertical axis
When a firm's only variable input is labor, then the slope of the
production function measures the - CORRECT ANSWER
>>marginal product of labor
Let L represent the number of workers hired by a firm, and let Q
represent that firm's quantity of output. Assume two points on the
firm's production function are (L = 12, Q = 122) and (L = 13, Q =
132). Then the marginal product of the 13th worker is
a. 8 units of output.
b. 10 units of output.
c. 122 units of output.
d. 132 units of output. - CORRECT ANSWER >>a. 8 units of
output
, Fixed costs can be defined as costs that - CORRECT ANSWER
>>are incurred even if nothing is produced
average total cost is equal to - CORRECT ANSWER >>total
cost/output
marginal cost equals
(i) change in total cost divided by change in quantity produced
(ii) change in variable cost divided by change in quantity produced
(iii) the average fixed cost of the current unit - CORRECT
ANSWER >>(i) an (ii)
Marginal cost tells us the - CORRECT ANSWER >>amount by
which total cost rises when output is increased by one unit
Marginal cost is equal to averaged total cost when - CORRECT
ANSWER >>average total cost is at its minimum
Refer to Table 13-1. The average fixed cost of producing five
widgets is - CORRECT ANSWER >>$2.00
Refer to Table 13-1. the average variable cost of producing four
widgets is - CORRECT ANSWER >>$2.50
Refer to Table 13-1. The average total cost of producing one
widget is - CORRECT ANSWER >>$11.00
Refer to Table 13-1. The marginal cost of producing the sixth
widget is - CORRECT ANSWER >>$6.00
Refer to table 13-1. What is the variable cost of producing zero
widgets? - CORRECT ANSWER >>$0
Refer to Table 13-1. What is the marginal cost of producing the
first widget? - CORRECT ANSWER >>$1.00
