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