ch 7 quiz

Approximately what percentage of the US labor force is employed by firms that have fewer than 100 employees?

35%

In economics, a firm that faces no competitors is referred to as _________________.

a monopoly

The _____________________ curve will always lie below the curve for average cost because average cost includes _____________ in the numerator of the calculation.

average variable cost; fixed costs

If the firm produces 5 units that it sells at a price of $30.00 each, what will its profits or losses equal?

losses equal $5

The term __________________ describes a situation where the quantity of output rises, but the average cost of production falls.

economies of scale

When __________________ exist, doubling of all inputs will result in more than doubling output, which means __________________________________________.

economies of scale; a larger factory can produce at a lower average cost than a smaller company.

In microeconomics, the term _____________________ is synonymous with economies of scale.

increasing returns to scale

Why would labor be treated as a variable cost?

producing larger quantities of a good or service generally requires more workers

If the firm produces 5 units that it sells for $39.00 each, what will its profits or losses equal?

profits equal $40

_____________ is calculated by taking the quantity of everything that is sold and multiplying it by the sale price.

total revenue

In microeconomics, the term ___________________ is synonymous with decreasing returns of scale.

diseconomies of scale

In order to reduce the harmful affects of recession and carbon emissions, the government provided tax incentives for manufacturing firm's to ___________________ that provide alternative, more efficient methods of combining inputs to produce output.

acquire energy efficient production technologies

In order to determine ____________, the firm's total costs must be divided by the quantity of its output.

average cost

A situation where the level of output, scale and average costs are all rising is called

both a and b are correct 53. _____________________ help to explain why every economy, as it develops, has an increasing proportion of its population living in urban areas. A. Economies of scale B. Constant returns to scale *C. Agglomeration factors D. Diseconomies of scale

A situation known as _____________________ occurs when all production inputs are allowed to expand, but that expansion does not result in much of a change in the average cost of production.

constant returns to scale

Which of the following should typically be ignored because spending has already been made and cannot be changed?

sunk cost

The graph illustrates the electricity market. Consider market competition between firms where price is based on AR and select the most appropriate answer.

this market is imperfectly competitive with excess profits possible in the short-run

___________ include all spending on labor, machinery, tools, and supplies purchased from other firms.

total cost

The marginal cost curve is generally ______________, because diminishing marginal returns implies that additional units are ________________________.

upward-sloping; more costly to produce

Marcella operates a small, but very successful art gallery. All but one of the following can be classified as a variable cost arising from the physical inputs Marcella requires to operate her business. Which is it?

physical space for the gallery