Optional HW ch 9 & 10
What is the total revenue if the economic profit is $24,000 and the economic costs are $96,000?
$120,000
If economic cost is $96,000 and total revenue is $120,000, what is the economic profit?
$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?
$90,000
What is the definition of total product (TP)?
The total quantity, or total output, of a particular good or service produced
A(n) ______ profit is equal to total revenue less explicit costs.
accounting
If the change in total product is 10 units and the change in labor input is 1, what is marginal product?
10
What is the average product If total product is 30 and there are 3 units of labor? Multiple choice question.
10
A company has three workers. It adds an additional laborer and its total product increases by 21. What is the company's marginal product? Multiple choice question.
21
If total product is 50 and the units of labor used is 10, then the average product is
5
Which of the following explain the concept of explicit costs? (Check all that apply.)
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.
Which industry requires the most time for its firms to alter plant capacity?
Aircraft manufacturing
Which of the following are types of resources that require more time for a firm to adjust, given a change in demand?
Amount of machinery Size of the factory
What are the components of plant capacity?
Amount of machinery and equipment Size of the factory building
Why does marginal product eventually diminish as units of labor are added?
Because the number of workers increases relative to the amount of capital equipment
Subtracting explicit and implicit costs from total revenue yields which of the following?
Economic profit
When a firm considers its economic costs, it considers which of the following?
Explicit and implicit costs All opportunity costs of resources used
True or false: Economic costs equal explicit costs minus implicit costs.
False
Which of the following are examples of implicit costs?
Forgone wages Forgone rent
Which of the following resources can a firm easily and quickly adjust?
Hourly labor Raw materials Fuel
What type of opportunity cost does a firm incur when it uses resources that it already possesses instead of selling them for cash?
Implicit
Which of the following is true regarding a firm's plant capacity? Multiple choice question.
It is fixed in the short run.
A time period during which a firm can adjust the quantities of all the resources that it employs, including plant capacity, is known as which of the following?
Long run
_______ product is the change in total product divided by the change in labor input.
Marginal
What happens to marginal product when total product is increasing but at a decreasing rate? Multiple choice question.
Marginal product is positive but falling.
Which best describes economic costs?
Payments that must be made to obtain a resource
What does it mean to the entrepreneur when economic profit is zero?
The entrepreneur is covering all explicit and implicit costs, including a normal profit.
How is marginal product (MP) defined? Multiple choice question.
The extra output or added product associated with adding a unit of a variable resource
Which of the following are examples of a long-run adjustment period?
The two days it takes a t-shirt maker to add sewing machines and silk-screen printers The three years it takes an oil refining company to build a new plant
What is the term for the total quantity of a specific good produced? Multiple choice question.
Total product
What is the definition of economic profit?
Total revenue minus economic costs (explicit and implicit)
True or false: Implicit costs are the firm's opportunity costs of using its self-owned, self-employed resources. True false question.
True
True or false: The short run and the long run are conceptual periods rather than calendar time periods.
True
In microeconomics, the long run is also known as which of the following? Multiple choice question.
Variable-plant period
Generally speaking, there are two types of calculable profits. Of these, _________ profit is what remains after a firm has paid its explicit costs.
accounting
In a manufacturing plant with no labor, adding labor increases output and marginal product. However, at some point increasing labor will no longer increase output at the same rate. Adding even more labor eventually causes marginal product to decline, because there will simply not be enough space for so many workers to work. This is an example of the law of ________ returns.
diminishing
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.
diminishing returns
A firm's _______ costs are the explicit and implicit costs of the resources it has used.
economic
A firm's ________ costs are the explicit and implicit costs of the resources it has used. Listen to the complete question
economic
The ______ cost of any resource used to produce a good is the value or worth the resource would have in its best alternative use.
economic
Total ______ costs equal explicit costs plus implicit costs.
economic or opportunity
Accounting profit is what remains after a firm has paid its _______ costs. Multiple choice question.
explicit
________ costs are the monetary payments a firm makes to purchase resources from others.
explicit
What type of opportunity cost does a firm incur when it uses resources that it already possesses instead of selling them for cash?
implicit
Forgone entrepreneurial income is an example of a(n) ______.
implicit cost
Forgone entrepreneurial income is an example of a(n) ______. Multiple choice question.
implicit cost
The size of the factory, the amount of machinery and equipment, and other capital resources define _______ __________ . (Enter one word in each blank.) Listen to the complete question
plant, size
The _______ run refers to a period of time too brief for a firm to alter its plant capacity yet long enough to permit a change in the degree to which the fixed plant is used.
short
True or false: Hourly labor, raw materials, and fuel are examples of resources a firm can easily adjust.
true
When total product is at its maximum, marginal product is ______. Multiple choice question.
zero
When total revenue earned by an entrepreneur is equal to the sum of explicit and implicit costs, then the entrepreneur earns a(n) ______.
zero economic profit
