Quiz Micro Chap 10 & 11

In perfectly competition, the price of the product is determined where the market

Supply curve and market demand curve intersect

Total cost equals

TFC + TVC

The position of a firm's short run cost curve depends on two factors: select all that apply

Technology Prices of factors of product

A proprietorship is a firm with

a single owner who has unlimited liability

The principal-agent problem is the issue of inducing

agents to act in the best interests of principals

The short run is a time frame in which

at least one factor of production is fixed

Team production is a production process in which

Individuals specialize in mutually supportive tasks.

In a perfectly competitive market, there are

many buyers and many sellers

three ways of coping with the principal-agent problem are

ownership, incentive pay, long term contracts

A market structure in which many firms are selling an identical product is called

perfect competition

A cost that has already been made and cannot be recovered is called a

sunk cost

Average total costs are total costs divided by

total output

The break-even point is defined as occurring at an output rate at which

total revenue equals total opportunity cost

Which of the following is not pros for partnership type of firm:

Simple decision making

In the table below, if the firm sells 5 units of output, it's total revenue is Quantity Sold. Price 5. $15 6 $15 7. $15

$75

economies of scale refer to

The range of output over which the long-run average cost falls as output increases.

In the long run, for a perfectly competitive market, if economic profit is - greater than zero, than some firms will market and the market supply curve will shift rightward - equal to zero, then there is no entry or exit of firms into or out of the market - less than zero, then some firms will exit the market and the market supply curve will shift leftward - all of the choices are correct

- all of the choices are correct

The table below provides information about the relationship between labor and various product measures. The total product that can be produced with 6 units of labor is Labor. Total Product. Marginal. Average (Workers) (Units) Product. Product 0. 0. 1 3 2 4.5 3 14 4. 3 5. 19 6. 1

20

The table below gives cost at Jan's bike shop. Unfortunately, Jan's record keeping has been spotty. Each worker is paid $100 a day. Labor costs are the only variable costs of production. What is the total cost of producing 50 bikes? Labor. Output. Total. Total. Total cost (Workers) (Bikes). Fixed Variable (Dollars) Cost $ Cost $ 0. 0. 200. ______. ___________ 1. 20. ______. ______. ___________ 2. 50. ______. ______. ___________ 3. 60. ______. ______. ___________ 4. 64. ______. ______. ___________

400

The table below shows the total product of producing baseball hats. The marginal product of the 4th worker is equal to Labor. Total product (Workers per day). (Hats per day) 0. 0 1. 4 2. 10 3. 18 4. 25 5. 30

7 baseball hats

A perfectly competitive firm's demand curve is

A horizontal line

The table below gives techniques jitter coffee company can use to package 5,000 lbs of coffee. Which technique is technologically inefficient? Technique Capital. Labor (Units). (Units) A. 70. 20 B. 80. 60 C. 120. 20 D. 5. 180

B and C

The four-firm concentration ratio measures

A) competitiveness B) profitability C) technological efficiency

Which of the following curves is not U-shaped?

AFC or average fixed cost curve

Which of the following best defines "economies of scope"?

Because firms use specialized resources to produce a range of goods, as the number of products produced increases, the cost of producing a unit decreases.

Economic depreciation is the

Change in the market value of capital over a given period.

A firm's total variable cost (TVC) is defined as a cost that

Changes as the firm changes its output

A perfect competitive firm maximizes it's profit by

Choosing to produce the quantity that sets MC equal to MR

Which of the following forms of business organizations is likely is likely to suffer most from the principal agent problem between the owners and managers of the business?

Corporations

Economies of scale exist when the

Cost of producing a unit of a good falls as it's output increases.

All of the following except _____ are a firm's opportunity cost of production is the sum of the cost of using resources.

Economic efficiency

Which of the following statements regarding the long-term equilibrium is TRUE?

Entry and exit stop when firms make zero economic profit

A period of time in which the quantity of all factors of production used by a firm can be varied is called the

Long run

A firm's average variable cost is $60, its total fixed cost is $3,000, and its output is 600 units. It's average total cost is

More than $64

A perfectly competitive firm is definitely making an economic profit when

P > ATC.

For a perfectly competitive firm, in the long-run equilibrium

P=MC=ATC=MR

The long-run average cost curve is the

Relationship between the lowest attainable average total cost and output when both the plant size and labor are varied.

Average product equals the

Total amount of output produced divided by the quantity of labor employed.

A firm's shutdown point is the quantity and price at which the firm's total revenue just equals its

Total variable cost

A firm's total cost (TC) equals the sum of its fixed cost plus its

Variable cost

technological efficiency occurs when the firm produces a given output

by using the least amount of inputs

Total variable cost is the sum of all

costs that rise as output increases

In perfect competition, the product of a single firm

has many perfect substitutes produced by other firms