PRODUCTION AND COSTS SAMPLE QUESTIONS ON SHORTTERM COSTS

PRODUCTION AND COSTS SAMPLE QUESTIONS ON SHORT-TERM COSTS AP Economics 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.