Chapter 13
if Tanya sells 200 glasses of fruit punch at $0.50 each, her total revenues are...
$100.
if Kumar sells 300 glasses of iced tea at $0.50 each, his total revenues are...
$150.
daphne sells 300 glasses of lemonade at $0.50 each. her total costs are $125. her profits are...
$25.
suppose a certain firm is able to produce 165 units of output per day when 15 workers are hired. the firm is able to produce 176 units of output per day when 16 workers are hired, holding other inputs fixed. the marginal product of the 16th worker is...
11 units of output.
grace is a self-employed artist. she can make 20 pieces of pottery per week. she is considering hiring her sister Kate to work for her. both she and Kate can make 35 pieces of pottery per week. what is Kate's marginal product?
15 pieces of pottery.
the average fixed cost curve...
always declines with increased levels of output.
the value of a business owner's time is an example of...
an opportunity cost.
which of the following expressions is correct?
average total cost = (total cost)/(quantity of output).
when marginal cost is less than average total cost,
average total cost is falling.
if marginal cost is equal to average total cost, then...
average total cost is minimized.
when marginal cost exceeds average total cost,
average total cost must be rising.
the firm's efficient scale is the quantity of output that minimizes...
average total cost.
economists normally assume that the goal of a firm is to...
b. maximize its profit.
variable cost divided by the change in quantity produced is... a. average variable cost. b. marginal cost. c. average total cost. d. None of the above is correct.
d.
in the long run Firm A incurs total costs of $1,200 when output is 30 units and $1,400 when output is 40 units. Firm A exhibits...
economies of scale because average total cost is falling as output rises.
total cost can be divided into two types of costs:
fixed costs and variable costs.
which of the following explains why long-run average cost at first decreases as output increases?
gains from specialization of inputs.
a production function describes...
how a firm turns inputs into output.
a difference between explicit and implicit costs is that...
implicit costs do not require a direct monetary outlay by the firm, whereas explicit costs do.
the difference between accounting profit and economic profit is...
implicit costs.
the marginal product of labor is equal to the...
increase in output obtained from a one unit increase in labor.
in the short run, a firm incurs fixed costs...
whether it produces output or not.
marginal cost is equal to...
∆TC/∆Q.
the marginal cost curve crosses the average total cost curve at...
a. the efficient scale. b. the minimum point on the average total cost curve. c. a point where the marginal cost curve is rising.
the length of the short run...
is different for different types of firms.
when a factory is operating in the short run,
it cannot adjust the quantity of fixed inputs.
economies of scale occur when a firm's...
long-run average total costs are decreasing as output increases.
constant returns to scale occur when a firm's...
long-run average total costs do not vary as output increases.
diseconomies of scale occur when...
long-run average total costs rise as output increases.
marginal cost
measures of cost is best described as "the increase in total cost that arises from an extra unit of production."
profit is defined as total revenue...
minus total cost.
total revenue equals
price x quantity.
the marginal product of an input in the production process is the increase in...
quantity of output obtained from an additional unit of that input.
a production function is a relationship between inputs and...
quantity of output.
explicit costs...
require an outlay of money by the firm.
the most likely explanation for economies of scale is...
specialization of labor.
total revenue
the amount of money that a firm receives from the sale of its output.
which of the following is an example of an implicit cost?
the owner of a firm forgoing an opportunity to earn a large salary working for a Wall Street brokerage firm. foregone rent on office space owned and used by the firm.
since the 1980s, Wal-Mart stores have appeared in almost every community in America. wal-Mart buys its goods in large quantities and, therefore, at cheaper prices. wal-Mart also locates its stores where land prices are low, usually outside of the community business district. many customers shop at Wal-Mart because of low prices. local retailers, like the neighborhood drug store, often go out of business because they lose customers. this story demonstrates that
there are economies of scale in retail sales.
average total cost is equal to...
total cost/output.
economic profit
total revenue minus both explicit and implicit costs.
accounting profit
total revenue minus only explicit costs.