ECON 247 - Final Units 6-10 Questions and Detailed
Correct Answers | Graded A+ | 2026/2027 Update |
Athabasca University
What is one of the most important properties of cost curves?
a. the average-total-cost curve first rises, then falls with increased output
b. for most producers, the average-total-cost curve never crosses the marginal
cost curve.
c. the marginal-cost-curve eventually rises with the quantity of output.
d. the average-fixed-cost curve must eventually rise. - ANSWERS c. the
marginal-cost curve eventually rises with the quantity of output
When would one expect to observe a diminishing marginal product of labour?
a. when union workers are told to reduce their work effort in preparation for a
new round of collective bargaining talks.
b. when only new workers are trained in using the most productive capital.
c. when workers are discouraged about the lack of help from other workers.
d. when crowded factory space reduces the productivity of new workers. -
ANSWERS d. when crowded factory space reduces the productivity of new
workers.
What is the efficient scale of a firm?
,a. the quantity of output that minimizes average total cost
b. the quantity of output that maximizes total revenue
c. the quantity of output that minimizes average variable cost
d. the quantity of output that maximizes marginal product. - ANSWERS a. the
quantity of output that minimizes average total cost
What is added to profit to obtain total revenue?
a. capital profit
b. operational cost
c. net profit
d. total cost - ANSWERS d. total cost
Economic profit is equal to
a. total revenue minus the explicit cost of producting goods and services
b. total revenue minus the opportunity cost of producing goods and services.
c. accounting revenue minus the accounting cost of producing goods and services.
d. explicit revenue minus the explicit cost of producing goods and services. -
ANSWERS b. total revenue minus the opportunity cost of producing goods and
services.
When a firm is making a profit-maximixing production decision, which of the
following principles of economics is likely to be most important to the firm's
decision?
,a. the cost of something is what you give up to get it.
b. a country's standard of living depends on its ability to produce goods and
services.
c. prices rise when the government prints too much money.
d. governments can sometimes improve market outcomes. - ANSWERS a. the
cost of something is what you give up to get it.
Jack is a tomato farmer. If Jack plants no seeds on his farm, he gets no harvest. If
he plants one package of seeds, he gets 300 tomatoes. If he plants two packages
of seed, he gets 500 tomatoes. If he plants three packages of seeds, he gets 600
tomatoes. A package of seeds cost $100, and the costs of seeds are his only costs.
When can we predict will happen to Jack's production function?
a. it will decrease at a decreasing rate.
b. it will decrease at an increasing rate.
c. it will increase at a decreasing rate.
d. it will increase at an increasing rate. - ANSWERS c. it will increase at a
decreasing rate.
In the short run, when are a firm's fixed costs equal to zero?
a. when the firm incurs profits.
b. when the firm produces no output.
c. fixed costs are always greater than zero.
d. when the firm incurs no variable cost. - ANSWERS c. fixed costs are always
greater than zero.
, In the long run, what happens to inputs?
a. inputs that were fixed in the short run remain fixed.
b. inputs that were variable in the short run will increase.
c. inputs that were fixed in the short run become variable.
d. inputs that were variable in the short run will decrease. - ANSWERS c.
inputs that were fixed in the short run become variable.
What is the relationship between economic profit and accounting profit?
a. economic profit is most often equal to accounting profit
b. economic profit is a less complete measure of profitability than accounting
profit.
c. economic profit will never exceed accounting profit.
d. economic profit is always at least as large as accounting profit. - ANSWERS
c. economic profit will never exceed accounting profit.
Harry's Hotdogs is a small street vendor business owned by Harry Huggins. Harry
is trying to get a better understanding of his costs by categorizing them as fixed or
variable. Which of the following costs are most likely to be considered fixed costs?
a. the cost of mustard
b. the cost of wages paid to workers that sell hotdogs.
c. the cost of his vending permit.
c. the cost of hotdog buns. - ANSWERS c. the cost of his vending permit.
Correct Answers | Graded A+ | 2026/2027 Update |
Athabasca University
What is one of the most important properties of cost curves?
a. the average-total-cost curve first rises, then falls with increased output
b. for most producers, the average-total-cost curve never crosses the marginal
cost curve.
c. the marginal-cost-curve eventually rises with the quantity of output.
d. the average-fixed-cost curve must eventually rise. - ANSWERS c. the
marginal-cost curve eventually rises with the quantity of output
When would one expect to observe a diminishing marginal product of labour?
a. when union workers are told to reduce their work effort in preparation for a
new round of collective bargaining talks.
b. when only new workers are trained in using the most productive capital.
c. when workers are discouraged about the lack of help from other workers.
d. when crowded factory space reduces the productivity of new workers. -
ANSWERS d. when crowded factory space reduces the productivity of new
workers.
What is the efficient scale of a firm?
,a. the quantity of output that minimizes average total cost
b. the quantity of output that maximizes total revenue
c. the quantity of output that minimizes average variable cost
d. the quantity of output that maximizes marginal product. - ANSWERS a. the
quantity of output that minimizes average total cost
What is added to profit to obtain total revenue?
a. capital profit
b. operational cost
c. net profit
d. total cost - ANSWERS d. total cost
Economic profit is equal to
a. total revenue minus the explicit cost of producting goods and services
b. total revenue minus the opportunity cost of producing goods and services.
c. accounting revenue minus the accounting cost of producing goods and services.
d. explicit revenue minus the explicit cost of producing goods and services. -
ANSWERS b. total revenue minus the opportunity cost of producing goods and
services.
When a firm is making a profit-maximixing production decision, which of the
following principles of economics is likely to be most important to the firm's
decision?
,a. the cost of something is what you give up to get it.
b. a country's standard of living depends on its ability to produce goods and
services.
c. prices rise when the government prints too much money.
d. governments can sometimes improve market outcomes. - ANSWERS a. the
cost of something is what you give up to get it.
Jack is a tomato farmer. If Jack plants no seeds on his farm, he gets no harvest. If
he plants one package of seeds, he gets 300 tomatoes. If he plants two packages
of seed, he gets 500 tomatoes. If he plants three packages of seeds, he gets 600
tomatoes. A package of seeds cost $100, and the costs of seeds are his only costs.
When can we predict will happen to Jack's production function?
a. it will decrease at a decreasing rate.
b. it will decrease at an increasing rate.
c. it will increase at a decreasing rate.
d. it will increase at an increasing rate. - ANSWERS c. it will increase at a
decreasing rate.
In the short run, when are a firm's fixed costs equal to zero?
a. when the firm incurs profits.
b. when the firm produces no output.
c. fixed costs are always greater than zero.
d. when the firm incurs no variable cost. - ANSWERS c. fixed costs are always
greater than zero.
, In the long run, what happens to inputs?
a. inputs that were fixed in the short run remain fixed.
b. inputs that were variable in the short run will increase.
c. inputs that were fixed in the short run become variable.
d. inputs that were variable in the short run will decrease. - ANSWERS c.
inputs that were fixed in the short run become variable.
What is the relationship between economic profit and accounting profit?
a. economic profit is most often equal to accounting profit
b. economic profit is a less complete measure of profitability than accounting
profit.
c. economic profit will never exceed accounting profit.
d. economic profit is always at least as large as accounting profit. - ANSWERS
c. economic profit will never exceed accounting profit.
Harry's Hotdogs is a small street vendor business owned by Harry Huggins. Harry
is trying to get a better understanding of his costs by categorizing them as fixed or
variable. Which of the following costs are most likely to be considered fixed costs?
a. the cost of mustard
b. the cost of wages paid to workers that sell hotdogs.
c. the cost of his vending permit.
c. the cost of hotdog buns. - ANSWERS c. the cost of his vending permit.
