Econ Test 3
At 2 units of output in above Table, the average variable cost is: a. $13 b. $6 c. $12 d. $21
$13
Hideki is the owner/operator of Hideki's Flower Shop. Last year he earned $100,000 in totalrevenue. His explicit costs were $60,000 paid to his employees and suppliers (assume that thisamount represents the total opportunity cost of these resources). During the course of the year hereceived three offers to work for other flower shops with the highest offer being $60,000 per year.Calculate Hideki's accounting and economic profit. a. Accounting profit = $40,000; economic profit = $0 b. Accounting profit = $60,000; economic profit = $40,000. c. Accounting profit = $40,000; economic profit = negative $20,000. d. Accounting profit = $0; economic profit = negative $40,000.
Accounting profit = $40,000; economic profit = negative $20,000.
1. Accounting costs and economic costs differ because: a. Economic costs include implicit costs and accounting costs do not. b. Accounting costs include implicit costs and economic costs do not. c. Economic costs include explicit costs and accounting costs do not. d. Accounting costs include explicit costs and economic costs do not
Economic costs include implicit costs and accounting costs do not.
Accounting costs and economic costs differ because: a. Economic costs include implicit costs and accounting costs do not. b. Accounting costs include implicit costs and economic costs do not. c. Economic costs include explicit costs and accounting costs do not. d. Accounting costs include explicit costs and economic costs do not.
Economic costs include implicit costs and accounting costs do not.
Indicate if the following statement is True or False: ATC is TFC + TVC. a. True b. False
False
ndicate if the following statement is True or False:A perfectly competitive firm faces a demand curve that is perfectly inelastic. A) True B) False
False
At the profit-maximizing output for a perfectly competitive firm: A) Average revenue = average total cost. B) Marginal cost = price. C) Total revenue = price. D) Total cost = total revenue.
Marginal cost = price
The law of diminishing returns states that beyond some point, the: a. Returns on stocks and bonds diminish with higher security prices. b. Addition to total utility diminishes as more units of a good are consumed. c. Marginal physical product of a variable input diminishes as more of that input is used. d. The total physical product of any good diminishes as more of a variable input is used
Marginal physical product of a variable input diminishes as more of that input is used.
The period in which at least one input is fixed in quantity is the: a. Long run. b. Production run. c. Short run. d. Investment decision
Short run.
Which of the following will become smaller and smaller as the firm expands output? a. average total cost. b. average fixed cost . c. marginal cost. d. total fixed cost
average fixed cost
Variable inputs are defined as any resource that: a. varies with the size of the firm's plant. b. cannot be changed as output changes. c. can be changed as output changes. d. can be increased or decreased hourly
can be changed as output changes.
. If a firm's long-run average cost curve is rising, it is experiencing: a. a constant returns to scale. b. economies of scale. c. diseconomies of scale. d. none of the above
diseconomies of scale.
If, at the present output level, price exceeds marginal cost, the purely competitive firm A) is maximizing its profit or minimizing its loss. B) should increase output to maximize its profit or minimize its loss. C) should reduce output to maximize its profit or minimize its loss. D) should increase its price to maximize its profit or minimize its loss. E) is clearly incurring a loss and should leave the industry.
should increase output to maximize its profit or minimize its loss.
Which of the following is not characteristic of a purely competitive industry?A) a large number of sellers B) relatively small firms C) ease of entry into the industry D) substantial differences in the products of sellers E) a selling price determined by market forces
substantial differences in the products of sellers