Econ chapter 4

The________ summarizes the output of the business, given the level of inputs; a-marginal function b-average cost c-marginal revenue d-production function

d-production function

What is the difference between revenue and cost; a-production b-input c-output d-profit

d-profit

The technology or knowledge necessary for the production process is called; a-production input b-Business know how c-Technology input d-knowledge input

b-Business know how

Add too many inputs, your business may experience; a- increasing marginal revenue b-diminishing marginal product c-diminishing cost input d-accelerated production function

b-diminishing marginal product

Simple grass mowing business, the lawnmower and labor would be; a-outputs b-inputs c-production d-profit

b-inputs

Long live physical equipment and structures that a business uses in its production process are called; a-boot b-land c-capital d-function

b-land

Fixed costs are also known as________costs because they are much harder for a business to change; a-short term b-long term c-variable d-static

b-long term

The added expense of producing one more unit of output is called the; a-marginal product b-marginal cost c-average cost d-production cost

b-marginal cost

Economist generally assume that the main goal of most businesses in economy is to; a-be responsible corporate citizens b-maximize profits c-provide jobs for the local population d-avoid having to make very many decisions

b-maximize profits

_______ is the added revenue from producing and selling one more unit of output; a-added revenue b-marginal profit c-marginal cost d-marginal revenue

d-marginal revenue

Profit maximizing business will increase production as long as; a-marginal cost exceeds marginal revenue b-marginal price exceeds average product c-average product exceeds marginal price d-marginal revenue exceeds marginal cost

d-marginal revenue exceeds marginal cost

Marginal cost is the added expense of producing one more unit of output; T or F

True

Outputs are always good; T or F

True

Production function tells you, given the inputs, what the output will be; T or F

True

Revenue is the money that customers pay for the output of a business; T or F

True

The average product is calculated by dividing input by the number of hours worked; T or F

True

The marginal product is the extra amount of output a firm can generate by adding one more hour of labor( or one more worker); T or F

True

Cost is what a business receives after subtracting expenses from revenue; T or F

False

Inputs for a business are the goods and services that it sells to its customer; T or F

False

Marginal revenue is the additional revenue business gets from producing or selling one more unit of input; T or F

False

Businesses have two types of cost: fixed and variable; T or F

True

The total cost of production is determined by adding which of the following costs; a-Labor, capital and land, intermediate inputs, and accumulating business know how b-Labor, capital, revenue, and marginal product c-Labor, land, capital, and revenue d-Labor, business know how, capital, and land

a-Labor, capital and land, intermediate inputs, and accumulating business know how

The difference between long-term and short-term profit maximization is that in the short term; a-businesses focus on achieving as much profit as they can given that fixed cost cannot be changed b-Business is focus it on achieving as much profit as they can, given that they can vary all inputs, even to the point of shutting down c-businesses are not able to maximize profits because they can vary all their input, making the calculations too complicated d-businesses focus on achieving as much profit as they can, but in the long term, businesses always eventually shut down

a-businesses focus on achieving as much profit as they can given that fixed cost cannot be changed

What word describes the money that a business pays for it's inputs; a-cost b-output c-revenue d-production

a-cost

Many times, technology is__________ in the equipment a company buys; a-embodied b-not present c-produced d-part of the production process

a-embodied

If June can earn $1500 in revenue from painting two houses, how much can she earn revenue from painting three houses(I assume she is just one house painter and a large market of house painters, and that she can easily find a third customer); a-exactly $2250 b-less than $2250 c-more than $2250 d-exactly $4500

a-exactly $2250

One strategy for long term profit maximization is; a-innovation b-offering consistently higher prices c-being the lowest price competitor d-utilization of private business incubators

a-innovation

The goods or services purchased by business for me to use in the production process are known as; a-intermediate inputs b-intermediate outputs c-Production inputs d-production processes

a-intermediate inputs

The hours of work supplied by various types of workers are for to by economists as; a-labor b-production c-revenue d- cost

a-labor

What happens to the marginal product of labor if more capital is added to production process;a-more capital generally causes the marginal product of labor to rise b-more capital cause the marginal product of labor not to diminish c-more capital generally causes the marginal product of labor to fall d-more capital affect the marginal product of capital not the marginal product of labor

a-more capital generally causes the marginal product of labor to rise

The main objective of a business in a market economy is; a-profit maximization b-controlling costs c-decreasing revenue d-managing the production function

a-profit maximization

Marginal cost generally________ quantity produced; a-rises with b-decreases with c-stays the same with varying d-is not related to

a-rises with

Theodore can make six pizzas in one hour. If Theodore's labor has a diminishing marginal product, what must be true about the number of pizzas that theodore can make in three hours; a-must be less than 12 b-must be less than 18 c-must be equal to 18 d-must be greater than 18

b-must be less than 18

What word scribes the money that customers pay for the output of a business; a-cost b-revenue c-input d-output

b-revenue

_______________ is the amount of money a company receives for selling a product or service; a-profit b-revenue c-cost d-average marginal revenue

b-revenue

Variable costs are also known as; a-long-term costs b-short term costs c-production costs d-variable average product

b-short term costs

Variable costs are revenant for; a-long-term strategic planning b-short term every day decision making c-Business is only d-calculating fixed cost percentages

b-short term every day decision making

________ shows the potential cost for each level of output; a-production function b-average marginal cost c-The cost function d-The production process

c-The cost function

Inputs to production do not include; a-labor b-land c-average product d-business know-how

c-average product

The short term cost function assumes that; a-all variable costs are equal b-fixed cost can be changed easily c-fixed cost can't be changed d-variable cost can be fixed

c-fixed cost can't be changed

Example of variable costs is; a-rent on the building a business occupies(for set time) b-loans on equipment purchased(for set time) c-hourly labor(changes w output) d-Insurance premiums to protect assets

c-hourly labor(changes w output)

Inputs used by a business in the production process include; a-revenue b-profit c-labor d-cost

c-labor

The price of labor per unit times he mad of labor used is called; a-marginal cost b-marginal Labor c-labor cost d-labor input

c-labor cost

Output divided by the number of hours worked or by the number of workers is called the; a-average input b-average product c-marginal product d-marginal revenue

c-marginal product

Additional money a business gets from producing and selling one more unit of output is; a-marginal product b-long-term revenue c-marginal revenue d-average profit

c-marginal revenue

Simple lawnmowing business when you have a push mode and labor as input, by adding an additional input in the form of a gas self-propelled mower (capital), what would be the impact on output; a-output would remain the same b-output would decrease c-output would increase d-Labor would decrease

c-output would increase

Average product is not as reliable indicator of how business is doing as it used to be because of; a-variable expenses b-fixed expenses c-outsourcing labor d-outsourcing profit

c-outsourcing Labor

In short run profit maximization, businesses focus on the__________, holding fixed cost constant; a-long-term cost function b-average input cost c-short term cost function d-short term production function

c-short term cost function

In the process of long-term profit maximization, the business makes decisions under the assumption that it can; a-change only short term cost b-change only long-term costs c-vary all the inputs d-eliminate all unnecessary expenses

c-vary all the inputs

If Sara can produce 25 muffins for total cost of $15, but her production process is subject increasing marginal cost, which of the following to be the total cost of producing 100 muffins; a-$15 b-$17.50 c-$60 d-$80

d-$80

Which of the following is an example of a profit maximizing business; a-A charitable organization that provides medical care for disaster victims b-local government to provide a police force c-household in which a family member takes care of the children d-an accountant who makes her living preparing tax returns for other people

d-an accountant who makes her living preparing tax returns for other people

Profit is the difference between revenue and; a-marginal product b-average product c-long term costs d-cost

d-cost

What word describes the goods and services that are used to produce outputs for a business; a-production b-cost c-revenue d-inputs

d-inputs

_________ is the added cost to produce one more unit of output; a-marginal product b-marginal revenue c-average cost d-marginal cost

d-marginal cost

The extra amount of output business can generate by adding one more hour labor is called; a-marginal revenue b-labor input c-marginal cost d-marginal product

d-marginal product

As the market price of a good rises, businesses will respond by producing more of that good because; a-The rise in price causes marginal cost to fall b-marginal cost exceeds marginal revenue after the price increase c-laws and regulations require them to do so d-marginal revenue exceeds marginal cost after the price increase

d-marginal revenue exceeds marginal cost after the price increase

What is the economic process of turning inputs into outputs that a business will sell to customers; a-revenue b-profit c-profit maximization d-production

d-production

Economist think of a business as a machine, where you put in put in one end and get outputs from the other end. This metaphor is called the; a-revenue process b-cost proces c-profit process d-production function

d-production function