Transcript Production and Costs Long Run Costs and Economies of Scale

PRODUCTION AND COSTS
LONG RUN COSTS AND
ECONOMIES OF SCALE
SAMPLE QUESTIONS
AP Microeconomics
Mr. Bordelon
For Heidi, the marginal cost of producing one additional
photograph equals the change in _____ divided by the
change in the _____.
a. total cost; number of photographs
b. marginal cost; number of photographs
c. total cost; marginal product of photographs
d. average cost; number of photographs
e. average cost; price of photographs
For Heidi, the marginal cost of producing one additional
photograph equals the change in _____ divided by the
change in the _____.
a. total cost; number of photographs
b. marginal cost; number of photographs
c. total cost; marginal product of photographs
d. average cost; number of photographs
e. average cost; price of photographs
When a cherry orchard in Oregon adds an additional
worker, the total cost of production increases by $24,000.
Adding the worker increases total cherry output by 600
pounds. Therefore, the marginal cost of the last pound of
cherries produced is:
a. $40.
b. $19.
c. $4,000.
d. $24,000.
e. $60.
When a cherry orchard in Oregon adds an additional
worker, the total cost of production increases by $24,000.
Adding the worker increases total cherry output by 600
pounds. Therefore, the marginal cost of the last pound of
cherries produced is:
a. $40.
b. $19.
c. $4,000.
d. $24,000.
e. $60.
When a firm produces a small amount of output, the
spreading effect:
a. is stronger than the diminishing returns effect.
b. is weaker than the diminishing returns effect.
c. and diminishing returns effect are equal.
d. will be zero.
e. contributes to a vertical short-run average total cost
curve.
When a firm produces a small amount of output, the
spreading effect:
a. is stronger than the diminishing returns effect.
b. is weaker than the diminishing returns effect.
c. and diminishing returns effect are equal.
d. will be zero.
e. contributes to a vertical short-run average total cost
curve.
The vertical difference between curve B and curve C at any
quantity of output is:
a. marginal cost.
b. fixed cost.
c. average fixed cost.
d. average variable cost.
e. profit.
The vertical difference between curve B and curve C at any
quantity of output is:
a. marginal cost.
b. fixed cost.
c. average fixed cost.
d. average variable cost.
e. profit.
When marginal cost is below average variable cost,
average variable cost must be:
a. at its minimum.
b. at its maximum.
c. falling.
d. rising.
e. equal to zero.
When marginal cost is below average variable cost,
average variable cost must be:
a. at its minimum.
b. at its maximum.
c. falling.
d. rising.
e. equal to zero.
Suppose Bonnie spends $300 per month to rent the
building, $100 per month to pay for insurance for her
business, and $100 per worker per month for every worker
she hires. Given this information, Bonnie’s fixed costs
equal:
a. $400.
b. $300.
c. $500.
d. $100.
e. $600.
Suppose Bonnie spends $300 per month to rent the
building, $100 per month to pay for insurance for her
business, and $100 per worker per month for every worker
she hires. Given this information, Bonnie’s fixed costs
equal:
a. $400.
b. $300.
c. $500.
d. $100.
e. $600.
The table provides information about the production function for Lindsay’s
Farm, which uses labor and land to produce its produce. The price of labor
is $50 per worker per week and the price of land is $20 per acre.
Quantity of Land
Quantity of Labor
Quantity of
Produce
10
0
0
10
1
50
10
2
100
10
3
140
10
4
170
10
5
190
Lindsey’s variable cost of production:
a. stay constant.
b. are equal to 10.
c. equal zero when she produces zero bushels of produce.
d. fall as soon as she starts producing.
e. equal $100 when 3 workers are employed.
The table provides information about the production function for Lindsay’s
Farm, which uses labor and land to produce its produce. The price of labor
is $50 per worker per week and the price of land is $20 per acre.
Quantity of Land
Quantity of Labor
Quantity of
Produce
10
0
0
10
1
50
10
2
100
10
3
140
10
4
170
10
5
190
Lindsey’s variable cost of production:
a. stay constant.
b. are equal to 10.
c. equal zero when she produces zero bushels of produce.
d. fall as soon as she starts producing.
e. equal $100 when 3 workers are employed.
The table provides information about the production function for Lindsay’s
Farm, which uses labor and land to produce its produce. The price of labor
is $50 per worker per week and the price of land is $20 per acre.
Quantity of Land
Quantity of Labor
Quantity of
Produce
10
0
0
10
1
50
10
2
100
10
3
140
10
4
170
10
5
190
When she hires 4 workers, Lindsey’s variable cost of production is:
a. $50.
b. $20.
c. $200.
d. $250.
e. $170.
The table provides information about the production function for Lindsay’s
Farm, which uses labor and land to produce its produce. The price of labor
is $50 per worker per week and the price of land is $20 per acre.
Quantity of Land
Quantity of Labor
Quantity of
Produce
10
0
0
10
1
50
10
2
100
10
3
140
10
4
170
10
5
190
When she hires 4 workers, Lindsey’s variable cost of production is:
a. $50.
b. $20.
c. $200.
d. $250.
e. $170.
The table provides information about the production function for Lindsay’s Farm, which
uses labor and land to produce its produce. The price of labor is $50 per worker per
week and the price of land is $20 per acre.
Quantity of Land
Quantity of Labor
Quantity of
Produce
10
0
0
10
1
50
10
2
100
10
3
140
10
4
170
10
5
190
When Lindsay decides to produce 50 units of produce she finds her total cost is
equal to:
a.
$150.
b.
$50.
c.
$200.
d.
$350.
e.
$250.
The table provides information about the production function for Lindsay’s Farm, which
uses labor and land to produce its produce. The price of labor is $50 per worker per
week and the price of land is $20 per acre.
Quantity of Land
Quantity of Labor
Quantity of
Produce
10
0
0
10
1
50
10
2
100
10
3
140
10
4
170
10
5
190
When Lindsay decides to produce 50 units of produce she finds her total cost is
equal to:
a.
$150.
b.
$50.
c.
$200.
d.
$350.
e.
$250.