Chapter 9 recharge for Bussiness
What accounts for the stark contrast in the number of concrete plants and the number of aircraft manufacturing plants in the United States
They have dramatically different minimum efficient scales
Economically specking, what period of time is sufficient for new firms to enter or for existing firms to exit an industry
long run
Economies of scale explain the downward-sloping part of the_____ curve
long-run average-total-cost
Total ______ costs equal explicit costs plus implicit costs
economic or opportunity
Forgone entrepreneurial income is an example
implicit cost
Why does the law of diminishing returns not account for the U-shape of the long run average-total-cost curve
in the long run all resources and inputs are variable
How does labor specialization allow a worker to become more proficient
it allows a worker to focus on fewer tasks and become more skilled in performing those tasks
The long-run average-total cost curve is derived from the many short-run average-total-cost curves, each of which represents a different
plant size
Under the definition of long run, all resources and inputs are
variable
Which of the following would incur an explicit cost
All of above
What is meant by the phrase "spreading the overhead"
As production increases, average fixed costs declines
Which of the following enables forms to make per-unit comparisons with product price
Average cost data
What does the vertical distance between the average total cost and average variable cost curves measure
Average fixed cost at any level of output
Which of the following is true of average fixed cost when output increases
Average fixed cost declines as output increases
An increase in the price of labor has no effect on which cost curve
Average-fixed-cost
Your company's total sales revenue for the month is 150,00; the costs to produce your product are 12,000 for rent, 6,000 for utilities, and 42,000 for employee wages. What is your accounting profit
90,000
Which of the following explains the concept of explicit costs
A firm's monetary payments made for the use of resources owned by others and A firm's monetary payments to those who supply labor services, materials, fuel, and transportation services
How does minimum efficient scale factor into the number of aircraft concrete manufacturers in the United States
Aircraft manufacturing requires large economies of scale, the economies of scale for concrete manufacturing are exhausted before they grow very large, Concrete manufacturing requires modest economies of scale, Concrete plants have a very limited distribution range
Which of the following are likely to cause cosy curves to shift
Changes in technology and changes in resource prices
Another term for the economies of scale is
Economies of mass production
The U-shape of the long run average-total cost curve results from which of the following
Economies of scale and Diseconomies of scale
Accounting profit is what remains after a firm has paid its ______ costs
Explicit
cost are the monetary payments a firm makes to purchase resources from others
Explicit
Which choices accurately explain the relationship between implicit explicit, and opportunity costs
Explicit and implicit costs are both forms of opportunity costs, Impilcit costs are the opportunity costs using the resources that a firm already owns rather than selling those resources to outsiders for cash, and Explicit costs are opportunity costs because the firm has to forego the best alternatives that could have been purchased with the same money by purchasing X
Which of the following are included in economic costs
Explicit and implicit costs of using resources and Opportunity costs of all resources used
True or false: Economic cost equal explicit cost minus implicit costs
False
Determining normal profit involves estimating which of the following
Forgone entrepreneurial income
How is the long-run average-total-cost curve derived
From all points of tangency of the short-run average-total-cost curves
More efficient technology has what effect on the productivity of all inputs
It increases the productivity of all inputs
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
Marginal data
Since explicit cost involve money that could be used to purchase alternative resources, they are a form of what?
Opportunity cost
Since explicit costs involve money that could be used to purchase alternative resources they are a form of what?
Opportunity costs
What best describes economic costs
Payments that must be made to obtain a resource
Which resource requires the most time for a firm to adjust, given a change in demand?
Plant capacity
What is the effect of an increase in the price of labor on the ATC, AVC, and MC curves
The average-fixed cost curve remains the same and the Average-variable-cost, average total cost, and marginal-cost curves shift upward
A firm's ______ costs are explicit and implicit costs of the resources it has used
economic
What does the long-run average-total-cost curve show
The lowest average total cost at which any chosen output level can be produced after the firm has had time to make adjustment in plant size
How do increases in gasolone prices affect the AVC, MC, and ATC curves of most companies
They all shift upward
How is average fixed cost determined?
Total fixed cost divided by output
The shape of the marginal cost curve reflects which of the following
Total variable cost first increases by decreasing amounts then by increasing amounts
True or false; Implicit costs are the firm's opportunity costs of using its self-owned, self-employed resources
True
A _____ profit is equal to total revenue less explicit costs
accounting
Per-units costs are also referred to as ______ costs
average
The marginal-cost curve intersects with the average-variable cost curve at the
average-variable-cost curve's minimum
How is the average total cost curve determined from graphical information
by adding vertically the average fixed cost and average variable cost curves
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
A firm's monetary payments to those who supply transportation services is an example of
explicit costs
Which costs do not vary will changes in output
fixed
A firm's decision about what output level to produce is typically a ______decision
marginal
What determines the degree of the shift in a firm's AVC, MC, and ATC curves when gasoline prices increase
the level to which gasoline is a major input cost for firm
How are marginal costs and average fixed costs related
they are not related