micro chapter 9

What methods can be used to calculate average total cost? Multiple select question. Total fixed cost divided by output (Q) Total variable cost divided by output (Q) Total cost divided by output (Q) Average fixed cost plus average variable cost

Total cost divided by output (Q) Average fixed cost plus average variable cost

Accounting profit is what remains after a firm has paid its _______ costs. Multiple choice question. implicit opportunity explicit and implicit explicit

explicit

In the ________ run, firms are able to adjust all resources.

long

The law of ______ returns states that as successive units of a variable resource are added to a fixed resource, beyond some point, the marginal product will decline. Multiple choice question. fixed marginal variable diminishing

diminishing

The law of ______ returns states that as successive units of a variable resource are added to a fixed resource, beyond some point, the marginal product will decline. Multiple choice question. fixed variable diminishing marginal

diminishing

Over what period of time can an industry and firms in that industry adjust all resource inputs used? Multiple choice question. The long run Neither the long run nor the short run. Both the long run and the short run The short run

the long run

If economic cost is $96,000 and total revenue is $120,000, what is the economic profit? Multiple choice question. $216,000 $96,000 $24,000 $120,000

$24,000

Your company's total sales revenue for the month is $150,000; the costs to produce your products are $12,000 for rent, $6,000 for utilities, and $42,000 for employee wages. What is your accounting profit? Multiple choice question. $108,000 $132,000 $90,000 $102,000

$90,000

Which of the following explain the concept of explicit costs? (Check all that apply.) Multiple select question. A firm's monetary payments to those who supply labor services, materials, fuel, and transportation services. A firm's monetary payments that self-employed resources could have earned in their best alternative use. A firm's monetary payments received for the use of resources owned by the firm. A firm's monetary payments made for the use of resources owned by others.

A firm's monetary payments to those who supply labor services, materials, fuel, and transportation services. A firm's monetary payments made for the use of resources owned by others.

A firm grows from one to three plants. As a result, the firm's sales increase, leading to greater marketing expertise. This is an example of which of the following? Multiple choice question. Learning by doing Labor specialization Efficient capital Slow decision making

Learning by doing

Start-up firms achieve _________ of scale from learning by doing and through increased specialization of labor, management, and equipment.

economies

True or false: Hourly labor, raw materials, and fuel are examples of resources a firm can easily adjust. True false question. True False

true

Which costs do not vary with changes in output? Multiple choice question. Marginal Variable Fixed Labor

Fixed

A firm's decision about what output level to produce is typically a ______ decision. Multiple choice question. production marginal coordinated sequential

marginal

What is the total revenue if the economic profit is $24,000 and the economic costs are $96,000? Multiple choice question. $4,000 $36,000 $72,000 $120,000

$120,000

Which of the following illustrates constant returns to scale? Multiple choice question. A firm's 10% increase in given inputs, causing a 30% increase in output A firm's 10% increase in given inputs, causing a proportionate 10% increase in output A firm's 10% increase in given inputs, causing a 20% increase in output A firm's 10% increase in given inputs, causing a 5% increase in output

A firm's 10% increase in given inputs, causing a proportionate 10% increase in output

A firm's decision whether to produce a few more or a few less units of output is a decision based on which of the following? Multiple choice question. Marginal data Fixed-cost data Average-cost data Total-cost data

Marginal data

Economies of scale explain the downward-sloping part of the ______ curve. Multiple choice question. short-run average-variable-cost long-run average-total-cost short-run average-total-cost long-run average-fixed-cost

long-run average-total-cost

Average variable cost equals total variable cost divided by total ______. Multiple choice question. costs price output revenue

output

What is the term for the extra cost of producing one more unit of output? Multiple choice question. Fixed cost Marginal cost Total cost Variable cost

Marginal cost

What is meant by the phrase "spreading the overhead"? Multiple choice question. As production increases, average fixed cost declines. As production increases, average variable cost always increases. As production increases, average fixed cost declines and then increases. As production increases, average fixed cost increases.

As production increases, average fixed cost declines.

Which of the following is an example of labor specialization? Multiple select question. Assigning each worker five or six unique tasks Hiring fewer workers and creating fewer job classifications Assigning each worker one task instead of five or six Hiring more workers in order to subdivide tasks

Assigning each worker one task instead of five or six Hiring more workers in order to subdivide tasks

Total fixed cost divided by output plus total variable cost divided by the output yields which of the following? Multiple choice question. Average fixed cost Average variable cost Average total cost Average marginal cost

Average total cost

What is another term for economies of scale? Multiple choice question. Economies of mass production Diseconomies of mass production Diseconomies of scale Economies of output

Economies of mass production

True or false: Important determinants of an industry's structure are economies of scale and revenue. True false question.

False

What is the effect of an increase in the price of labor on the ATC, AVC, and MC curves? Multiple select question. The average-variable-cost, average-total-cost, and marginal-cost curves shift upward. The average-fixed-cost curve remains the same. The average-variable-cost and average-total-cost curves shift upward, and the marginal-cost curve shifts downward. The average-variable-cost, average-total-cost, and marginal-cost curves shift downward.

The average-variable-cost, average-total-cost, and marginal-cost curves shift upward. The average-fixed-cost curve remains the same.

Which of the following sections of a long-run average total cost curve depicts constant returns to scale? Multiple choice question. The beginning high point of the curve The downward-sloping section The upward-sloping section The flat section

The flat section

How is average fixed cost determined? Multiple choice question. Total fixed cost divided by total variable cost Total fixed cost divided by opportunity cost Total fixed cost divided by marginal output Total fixed cost divided by output

Total fixed cost divided by output

What is the term for the total quantity of a specific good produced? Multiple choice question. Marginal product Average product Normal product Total product

Total product

Assuming technology and production techniques are fixed and cannot change, if beyond some point of production a firm experiences declining units of additional output with each additional unit of labor input, then the firm is experiencing the effects of the law of ______. Multiple choice question. marginal utility diminishing returns diminishing marginal costs supply and demand

diminishing returns

The ______ cost of any resource used to produce a good is the value or worth the resource would have in its best alternative use. Multiple choice question. absolute economic explicit accounting

economic

Learning by doing contributes to a firm's ______. Multiple choice question. diseconomies of scale economies of scale fixed costs constant returns to scale

economies of scale

______ costs are the monetary payments a firm makes to purchase resources from others.

explicit

_________ costs are part of the simple existence of a firm's plant and must be paid even when output is zero.

fixed

The lowest level of output at which a firm can minimize long-run average costs is called ______. Multiple choice question. economies of scale maximum efficient scale diseconomies of scale minimum efficient scale

minimum efficient scale

Variable costs change with the level of

output

Increased labor ______ becomes more achievable as a plant increases in size. Multiple choice question. supply demand generalization specialization

specialization

Which of the following is true of average fixed cost when output increases? Multiple choice question. Average fixed cost increases initially, reaches a maximum, and then decreases. Average fixed cost stays the same as output increases. Average fixed cost declines as output increases. Average fixed cost declines initially, reaches a minimum, and then increases.

Average fixed cost declines as output increases.

An increase in the price of labor has no effect on which cost curve? Multiple choice question. Average-fixed-cost Average-total-cost Marginal-cost Average-variable-cost

Average-fixed-cost

How is marginal cost (MC) calculated? Multiple choice question. By dividing the change in total fixed cost by the total output By dividing the change in output by the change in total cost By dividing the change in total cost by the change in output By dividing the change in total fixed cost by the change in output

By dividing the change in total cost by the change in output

Which best characterizes variable costs? Multiple choice question. Costs that change with the level of output Costs that do not change with the level of output Costs that increase when output declines and decrease when output increases Costs that consider the average cost over a period of time

Costs that change with the level of output

By using economies of scale, successful start-up firms are able to shift their short-run cost curves in which directions? Downward and to the right Upward and to the left Downward and to the left Upward and to the right

Downward and to the right

The U-shape of the long-run average-total-cost curve results from which of the following? Multiple select question. Economies of scale Rising resource prices Diseconomies of scale Fixed labor costs

Economies of scale Diseconomies of scale

Which of the following resources can a firm easily and quickly adjust? Multiple select question. Fuel Hourly labor Raw materials Production-line machinery Size of the factory

Fuel Hourly labor Raw materials

Why does the law of diminishing returns not account for the U-shape of the long-run average-total-cost curve? Multiple choice question. In the short run all resources and inputs are variable. In the short run all resources and inputs are fixed. In the long run all resources and inputs are fixed. In the long run all resources and inputs are variable.

In the long run all resources and inputs are variable.

A planning curve is another term for which of the following? Multiple choice question. Long run average-variable-cost curve Long run average-total-cost curve Long run average-fixed-cost curve Long run average-marginal-cost curve

Long run average-total-cost curve

What does the long-run average-total-cost curve show? Multiple choice question. The maximum level of output possible in the short run at all plant sizes The sum total of all of the short-run average-total-cost curves The lowest minimum short-run average-total-cost curve at which a firm must produce to make a profit The lowest average total cost at which any chosen output level can be produced after the firm has had time to make adjustments in plant size

The lowest average total cost at which any chosen output level can be produced after the firm has had time to make adjustments in plant size

What is the definition of total product (TP)? Multiple choice question. The total quantity, or total output, of a particular good or service produced The total output per unit of labor The total additional output or added product associated with adding a unit of a variable resource to the production process The total output of a particular good less total production costs

The total quantity, or total output, of a particular good or service produced

What is the definition of average variable cost? Multiple choice question. Total variable cost divided by marginal cost (MC) Total variable cost divided by change in output (Q) Total variable cost divided by total fixed cost (TFC) Total variable cost divided by output (Q)

Total variable cost divided by output (Q)

Average fixed cost equals total fixed cost divided by the ______. Multiple choice question. amount of output total costs quantity of labor marginal product of labor

amount of output