 |
| 1 | |
Suppose you could paint your own house in 20 hours or you could hire a professional to do it for you in 12 hours. You value your time at $12 per hour; the professional will charge you $200 plus the cost of the paint. The opportunity cost of painting your own house is: |
| | A) | $200 |
| | B) | $240 |
| | C) | $40 |
| | D) | $96 |
|
|
|
| 2 | |
The distinguishing feature of the short run is that: |
| | A) | at least one input is fixed |
| | B) | output is fixed |
| | C) | input prices are variable |
| | D) | technology is variable |
|
|
|
| 3 | |
The WXY Corporation has fixed costs of $30. Its total variable costs (TVC) vary with output as shown in the following table.
 <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/1113273090/384258/quiz20c_3.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (4.0K)</a>]]>
Refer to the table. The marginal cost of the fourth unit of output is: |
| | A) | $30 |
| | B) | $40 |
| | C) | $50 |
| | D) | $60 |
|
|
|
| 4 | |
Answer the next question based on the cost data in the following table:
 <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/1113273090/384258/quiz20c_4.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (8.0K)</a>]]>
Refer to the data. At what output level does marginal cost equal average variable cost? |
| | A) | 2 units |
| | B) | 3 units |
| | C) | 4 units |
| | D) | both 2 units and 4 units |
|
|
|
| 5 | |
Use the following diagram to answer the next question.
 <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/1113273090/384258/quiz20c_5.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (6.0K)</a>]]>
Refer to the diagram. Average fixed cost is: |
| | A) | line 1 |
| | B) | line 2 |
| | C) | line 3 |
| | D) | the vertical distance between lines 2 and 3 |
|
|
|
| 6 | |
Use the following data to answer the next question. The letters A, B, and C designate three successively larger plant sizes.
 <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/1113273090/384258/quiz20c_6.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (12.0K)</a>]]>
Refer to the data. In the long run, the firm should use plant size "A" for: |
| | A) | all possible levels of output |
| | B) | 100 to 200 units of output |
| | C) | 300 to 600 units of output |
| | D) | 600 or more units of output |
|
|
|
| 7 | |
Suppose that when output is 20 units, TC = $120, TVC = $100, and MC = $10. At this output: |
| | A) | MC < AVC |
| | B) | AFC = AVC |
| | C) | AFC = $1 |
| | D) | AVC is minimized |
|
|
|
| 8 | |
Use the following data to answer the next question. The letters A, B, and C designate three successively larger plant sizes.
 <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/1113273090/384258/quiz20c_8.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (12.0K)</a>]]>
Refer to the data. If these are the only three plant sizes available, what is the long run average cost of producing 600 units? |
| | A) | $4 |
| | B) | $6 |
| | C) | $28 |
| | D) | $38 |
|
|
|
| 9 | |
Suppose a particular firm exhibits constant returns to scale as it increases its output over any reasonable range. If it increases all its inputs by 10%, its: |
| | A) | total cost will increase by less than 10% |
| | B) | average total cost will increase by 10% |
| | C) | output will increase by 10% |
| | D) | long run average cost curve will shift to the right by 10% |
|
|
|
| 10 | |
Insurance is typically a fixed cost. Accordingly, an increase in a firm's insurance premiums will shift up the firm's short-run: |
| | A) | average total cost curve |
| | B) | marginal cost curve |
| | C) | average variable cost curve |
| | D) | total fixed cost curve but leave its average fixed cost curve unaffected |
|
|
.