1. AP Microeconomics Mr. Bordelon
Production and Costs Long Run Costs and Economies of Scale Sample Questions
AP Microeconomics
Mr. Bordelon

2. For Heidi, the marginal cost of producing one additional photograph equals the change in _____ divided by the change in the _____.
total cost; number of photographs
marginal cost; number of photographs
total cost; marginal product of photographs
average cost; number of photographs
average cost; price of photographs

3. For Heidi, the marginal cost of producing one additional photograph equals the change in _____ divided by the change in the _____.
total cost; number of photographs
marginal cost; number of photographs
total cost; marginal product of photographs
average cost; number of photographs
average cost; price of photographs

4. 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:
$40.
$19.
$4,000.
$24,000.
$60.

5. 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:
$40.
$19.
$4,000.
$24,000.
$60.

6. When a firm produces a small amount of output, the spreading effect:
is stronger than the diminishing returns effect.
is weaker than the diminishing returns effect.
and diminishing returns effect are equal.
will be zero.
contributes to a vertical short-run average total cost curve.

7. When a firm produces a small amount of output, the spreading effect:
is stronger than the diminishing returns effect.
is weaker than the diminishing returns effect.
and diminishing returns effect are equal.
will be zero.
contributes to a vertical short-run average total cost curve.

8. The vertical difference between curve B and curve C at any quantity of output is:
marginal cost.
fixed cost.
average fixed cost.
average variable cost.
profit.

9. The vertical difference between curve B and curve C at any quantity of output is:
marginal cost.
fixed cost.
average fixed cost.
average variable cost.
profit.

10. When marginal cost is below average variable cost, average variable cost must be:
at its minimum.
at its maximum.
falling.
rising.
equal to zero.

11. When marginal cost is below average variable cost, average variable cost must be:
at its minimum.
at its maximum.
falling.
rising.
equal to zero.

12. 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:
$400.
$300.
$500.
$100.
$600.

13. 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:
$400.
$300.
$500.
$100.
$600.

14. Lindsey’s variable cost of production: stay constant. are equal to 10.
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.
Lindsey’s variable cost of production:
stay constant.
are equal to 10.
equal zero when she produces zero bushels of produce.
fall as soon as she starts producing.
equal $100 when 3 workers are employed.
Quantity of Land
Quantity of Labor
Quantity of Produce 10 1 50 2
100 3
140 4
170 5
190

15. Lindsey’s variable cost of production: stay constant. are equal to 10.
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.
Lindsey’s variable cost of production:
stay constant.
are equal to 10.
equal zero when she produces zero bushels of produce.
fall as soon as she starts producing.
equal $100 when 3 workers are employed.
Quantity of Land
Quantity of Labor
Quantity of Produce 10 1 50 2
100 3
140 4
170 5
190

16. When she hires 4 workers, Lindsey’s variable cost of production is:
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.
When she hires 4 workers, Lindsey’s variable cost of production is:
$50.
$20.
$200.
$250.
$170.
Quantity of Land
Quantity of Labor
Quantity of Produce 10 1 50 2
100 3
140 4
170 5
190

17. When she hires 4 workers, Lindsey’s variable cost of production is:
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.
When she hires 4 workers, Lindsey’s variable cost of production is:
$50.
$20.
$200.
$250.
$170.
Quantity of Land
Quantity of Labor
Quantity of Produce 10 1 50 2
100 3
140 4
170 5
190

18. 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.
When Lindsay decides to produce 50 units of produce she finds her total cost is equal to:
$150.
$50.
$200.
$350.
$250.
Quantity of Land
Quantity of Labor
Quantity of Produce 10 1 50 2
100 3
140 4
170 5
190

19. 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.
When Lindsay decides to produce 50 units of produce she finds her total cost is equal to:
$150.
$50.
$200.
$350.
$250.
Quantity of Land
Quantity of Labor
Quantity of Produce 10 1 50 2
100 3
140 4
170 5
190