CHAPTER 22: Cost Curves
MULTIPLE CHOICE
1. In Problem 2, if Mr. Dent Carr’s total costs were 5s2 + 50s + 20, then if he repairs 10 cars, his average
variable costs will be
a.
$100.
b.
$102.
c.
$150.
d.
$200.
e.
$75.
2. In Problem 2, if Mr. Dent Carr’s total costs were 2s2 + 50s + 75, then if he repairs 25 cars, his average
variable costs will be
a.
$150.
b.
$200.
c.
$103.
d.
$100.
e.
$75.
3. In Problem 2, if Mr. Dent Carr’s total costs were 2s2 + 75s + 100, then if he repairs 25 cars, his average
variable costs will be
a.
$250.
b.
$125.
c.
$129.
d.
$175.
e.
$87.50.
4. In Problem 2, if Mr. Dent Carr’s total costs were 2s2 + 20s + 40, then if he repairs 10 cars, his average
variable costs will be
a.
$44.
b.
$80.
c.
$40.
d.
$60.
e.
$30.
5. In Problem 2, if Mr. Dent Carr’s total costs were 4s2 + 40s + 20, then if he repairs 10 cars, his average
variable costs will be
a.
$120.
b.
$82.
c.
$160.
d.
$80.
e.
$60.
6. In Problem 3, Rex Carr could pay $10 for a shovel that lasts one year and pay $5 a car to his brother
Scoop to bury the cars, or he could buy a low-quality car smasher that costs $200 a year to own and
that smashes cars at a marginal cost of $1 per car. If it is also possible for Rex to buy a high-quality
hydraulic car smasher that cost $650 per year to own and if with this smasher he could dispose of cars
at a cost of $.75 per car, it would be worthwhile for him to buy this high-quality smasher if he planned
to dispose of
a.
at least 1,800 cars per year.
b.
no more than 900 cars per year.
c.
at least 1,810 cars per year.
d.
no more than 1,800 cars per year.
e.
at least 900 cars per year.
7. In Problem 3, Rex Carr could pay $10 for a shovel that lasts one year and pay $5 a car to his brother
Scoop to bury the cars, or he could buy a low-quality car smasher that costs $200 a year to own and
that smashes cars at a marginal cost of $1 per car. If it is also possible for Rex to buy a high-quality
hydraulic car smasher that cost $300 per year to own and if with this smasher he could dispose of cars
at a cost of $.75 per car, it would be worthwhile for him to buy this high-quality smasher if he planned
to dispose of
a.
at least 400 cars per year.
b.
no more than 400 cars per year.
c.
no more than 200 cars per year.
d.
at least 410 cars per year.
e.
at least 200 cars per year.
8. In Problem 3, Rex Carr could pay $10 for a shovel that lasts one year and pay $5 a car to his brother
Scoop to bury the cars, or he could buy a low-quality car smasher that costs $200 a year to own and
that smashes cars at a marginal cost of $1 per car. If it is also possible for Rex to buy a high-quality
hydraulic car smasher that cost $550 per year to own and if with this smasher he could dispose of cars
at a cost of $.80 per car, it would be worthwhile for him to buy this high-quality smasher if he planned
to dispose of
a.
at least 1,760 cars per year.
b.
no more than 1,750 cars per year.
c.
at least 1,750 cars per year.
d.
no more than 875 cars per year.
e.
at least 875 cars per year.
9. In Problem 3, Rex Carr could pay $10 for a shovel that lasts one year and pay $5 a car to his brother
Scoop to bury the cars, or he could buy a low-quality car smasher that costs $200 a year to own and
that smashes cars at a marginal cost of $1 per car. If it is also possible for Rex to buy a high-quality
hydraulic car smasher that cost $550 per year to own and if with this smasher he could dispose of cars
at a cost of $.75 per car, it would be worthwhile for him to buy this high-quality smasher if he planned
to dispose of
a.
at least 1,410 cars per year.
b.
no more than 700 cars per year.
c.
no more than 1,400 cars per year.
d.
at least 1,400 cars per year.
e.
at least 700 cars per year.
10. In Problem 3, Rex Carr could pay $10 for a shovel that lasts one year and pay $5 a car to his brother
Scoop to bury the cars, or he could buy a low-quality car smasher that costs $200 a year to own and
that smashes cars at a marginal cost of $1 per car. If it is also possible for Rex to buy a high-quality
hydraulic car smasher that cost $450 per year to own and if with this smasher he could dispose of cars
at a cost of $.80 per car, it would be worthwhile for him to buy this high-quality smasher if he planned
to dispose of
a.
at least 1,260 cars per year.
b.
at least 1,250 cars per year.
c.
no more than 625 cars per year.
d.
no more than 1,250 cars per year.
e.
at least 625 cars per year.
11. Mary Magnolia in Problem 4 has variable costs equal to y2/F, where y is the number of bouquets she
sells per month and where F is the number of square feet of space in her shop. If Mary has signed a
lease for a shop with 800 square feet, if she is not able to get out of the lease or to expand her store in
the short run, and if the price of a bouquet is $6 per unit, how many bouquets per month should she
sell in the short run?
a.
800
b.
400
c.
2,400
d.
3,600
e.
2,640
12. Mary Magnolia in Problem 4 has variable costs equal to y2/F, where y is the number of bouquets she
sells per month and where F is the number of square feet of space in her shop. If Mary has signed a
lease for a shop with 1,000 square feet, if she is not able to get out of the lease or to expand her store in
the short run, and if the price of a bouquet is $5 per unit, how many bouquets per month should she
sell in the short run?
a.
2,500
b.
500
c.
1,000
d.
3,750
e.
2,750
13. Mary Magnolia in Problem 4 has variable costs equal to y2/F, where y is the number of bouquets she
sells per month and where F is the number of square feet of space in her shop. If Mary has signed a
lease for a shop with 1,400 square feet, if she is not able to get out of the lease or to expand her store in
the short run, and if the price of a bouquet is $3 per unit, how many bouquets per month should she
sell in the short run?
a.
1,400
b.
3,150
c.
700
d.
2,100
e.
2,310
14. Mary Magnolia in Problem 4 has variable costs equal to y2/F, where y is the number of bouquets she
sells per month and where F is the number of square feet of space in her shop. If Mary has signed a
lease for a shop with 400 square feet, if she is not able to get out of the lease or to expand her store in
the short run, and if the price of a bouquet is $5 per unit, how many bouquets per month should she
sell in the short run?
a.
200
b.
1,500
c.
1,000
d.
400
e.
1,100
15. Mary Magnolia in Problem 4 has variable costs equal to y2/F, where y is the number of bouquets she
sells per month and where F is the number of square feet of space in her shop. If Mary has signed a
lease for a shop with 1,000 square feet, if she is not able to get out of the lease or to expand her store in
the short run, and if the price of a bouquet is $3 per unit, how many bouquets per month should she
sell in the short run?
a.
1,500
b.
500
c.
2,250
d.
1,000
e.
1,650
16. Touchie MacFeelie’s production function is 0.1J1/2 L3/4, where J is the number of old jokes used and L
is the number of hours of cartoonists’ labor. Touchie is stuck with 400 old jokes for which he paid 4
dollars each. If the wage rate for cartoonists is 3 dollars, then the total cost of producing 128 comics
books is
a.
2,368 dollars.
b.
1,184 dollars.
c.
3,552 dollars.
d.
2,496 dollars.
e.
592 dollars.
17. Touchie MacFeelie’s production function is 0.1J1/2 L3/4, where J is the number of old jokes used and L
is the number of hours of cartoonists’ labor. Touchie is stuck with 1,600 old jokes for which he paid 6
dollars each. If the wage rate for cartoonists is 5 dollars, then the total cost of producing 108 comics
books is
a.
15,007.50 dollars.
b.
5,002.50 dollars.
c.
10,113 dollars.
d.
10,005 dollars.
e.
2,501.25 dollars.
18. Touchie MacFeelie’s production function is 0.1J1/2 L3/4, where J is the number of old jokes used and L
is the number of hours of cartoonists’ labor. Touchie is stuck with 400 old jokes for which he paid 2
dollars each. If the wage rate for cartoonists is 5 dollars, then the total cost of producing 54 comics
books is
a.
1,205 dollars.
b.
1,807.50 dollars.
c.
602.50 dollars.
d.
1,259 dollars.
e.
301.25 dollars.
19. Touchie MacFeelie’s production function is 0.1J1/2 L3/4, where J is the number of old jokes used and L
is the number of hours of cartoonists’ labor. Touchie is stuck with 900 old jokes for which he paid 4
dollars each. If the wage rate for cartoonists is 6 dollars, then the total cost of producing 24 comics
books is
a.
3,720 dollars.
b.
3,696 dollars.
c.
1,848 dollars.
d.
5,544 dollars.
e.
924 dollars.
20. Touchie MacFeelie’s production function is 0.1J1/2 L3/4, where J is the number of old jokes used and L
is the number of hours of cartoonists’ labor. Touchie is stuck with 1,600 old jokes for which he paid 3
dollars each. If the wage rate for cartoonists is 2 dollars, then the total cost of producing 108 comics
books is
a.
2,481 dollars.
b.
5,070 dollars.
c.
4,962 dollars.
d.
7,443 dollars.
e.
1,240.50 dollars.
21. Recall that Touchie McFeelie’s production function for comics books is 0.1J1/2 L3/4. Suppose that
Touchie can vary both jokes and cartoonists’ labor. If old jokes cost $3 each and cartoonists’ labor
costs $18 per hour, then the cheapest way to produce comics books requires using jokes and labor in
the ratio
a.
J/L = 6.
b.
J/L = 8.
c.
J/L = 2.
d.
J/L = 2/3.
e.
J/L = 4.
22. Recall that Touchie McFeelie’s production function for comics books is 0.1J1/2 L3/4 Suppose that
Touchie can vary both jokes and cartoonists’ labor. If old jokes cost $3 each and cartoonists’ labor
costs $9 per hour, then the cheapest way to produce comics books requires using jokes and labor in the
ratio
a.
J/L = 1.
b.
J/L = 3.
c.
J/L = 4.
d.
J/L = 2/3.
e.
J/L = 2.
23. Recall that Touchie McFeelie’s production function for comics books is 0.1J1/2 L3/4. Suppose that
Touchie can vary both jokes and cartoonists’ labor. If old jokes cost $4 each and cartoonists’ labor
costs $24 per hour, then the cheapest way to produce comics books requires using jokes and labor in
the ratio
a.
J/L = 6.
b.
J/L = 8.
c.
J/L = 2/3.
d.
J/L = 2.
e.
J/L = 4.
24. Recall that Touchie McFeelie’s production function for comics books is 0.1J1/2 L3/4. Suppose that
Touchie can vary both jokes and cartoonists’ labor. If old jokes cost $2 each and cartoonists’ labor
costs $12 per hour, then the cheapest way to produce comics books requires using jokes and labor in
the ratio
a.
J/L = 6.
b.
J/L = 2.
c.
J/L = 2/3.
d.
J/L = 8.
e.
J/L = 4.
25. Recall that Touchie McFeelie’s production function for comics books is 0.1J1/2 L3/4. Suppose that
Touchie can vary both jokes and cartoonists’ labor. If old jokes cost $1 each and cartoonists’ labor
costs $3 per hour, then the cheapest way to produce comics books requires using jokes and labor in the
ratio
a.
J/L = 4.
b.
J/L = 2/3.
c.
J/L = 3.
d.
J/L = 1.
e.
J/L = 2.