Principles of Microeconomics

TEST BANK FORPRINCIPLES OFMICROECONOMICS 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




Totalrevenue equals - CORRECT ANSWER >>total output
B B B B B B B




multipliedby 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




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




Johnownsashoe-shinebusiness.Hisaccountant most likely includes
B B B B B B B B B




which ofthe following costs on his financialstatements?
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




Johnsold 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




costof shoe polish
B B B B

,The amount of money that a wheat farmer could have earned if hehad
B B B B B B B B B B B B B




planted barley instead ofwheat is -
B B CORRECT ANSWER 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




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 +implicitcosts - CORRECT ANSWER>>(iii) B B B B B B B B




only
B




Economicprofit- CORRECT ANSWER >>willneverexceed
B B B B B B B




accountingprofit
B B




Economists normally assume that the goal of a firm is to -
B B B B B B B B B B B




C
BBBBBBBBBBB >>maximizeitsprofit B B




ORRECT ANSWER
B B




a production function is a relationship between - CORRECT
B B B B B B B B




ANSWER >>inputs andquantity ofoutput
B B B B B B




the marginal product oflaborisequal to the -CORRECT ANSWER
B B B B B B B B B B B




>>increaseinoutputobtainedfromaoneunitincreaseinlabor
B B B B B B B B B




one would expect to observe diminishing marginal product oflabor
B B B B B B B B B




when - CORRECT ANSWER>>crowded office space reduces the
B B B B B B B B B




productivity ofnew workers
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 itemploys
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 itemploys
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




sizeofitsfactory
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




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 input.
B B B B B B B B B B B B B




When this firm's production function is illustrated on a graph?
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




the horizontal axis and the quantity of output is measured on the
B B B B B B B B B B B




verticalaxis
B 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




productionfunctionmeasuresthe - 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




output
B

, Fixed costs can be defined as costs that - CORRECT ANSWER
B B B B B B B B B




>>areincurredevenifnothingisproduced
B B B B B B




averagetotalcostisequalto - 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) theaveragefixedcostofthecurrent unit - CORRECT
B B B B B B B B B




ANSWER >>(i)an (ii)
BB B B B




Marginalcosttells usthe - CORRECT ANSWER >>amountby
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




Marginalcostisequal toaveraged total costwhen - CORRECT
B B B B B B B B B B




ANSWER >>average totalcostisatits minimum
BB 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




Refer to Table 13-1. The marginal cost of producing the sixthwidgetis
B B B B B B B B B B B




- CORRECT ANSWER >>$6.00
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




Refer to Table 13-1. What is the marginal cost of producing thefirst
B B B B B B B B B B B B




widget? - CORRECT ANSWER >>$1.00
B B B B B