chapter 9

What is the average fixed cost if the average total cost is $100 and the average variable cost is $75? Multiple choice question.

$25 Reason: Average total cost ($100) equals average fixed cost (?) plus average variable cost ($75).

What is the average fixed cost if the average total cost is $100 and the average variable cost is $75? Multiple choice question.

$25 Reason: Average total cost ($100) equals average fixed cost (?) plus average variable cost ($75).

If the change in total product is 10 units and the change in labor input is 1, what is marginal product? Multiple choice question. 10 0.1 Reason: Marginal product is the change in total product divided by the change in input. 5 Reason: Marginal product is the change in total product divided by the change in input. 20 Reason: Marginal product is the change in total product divided by the change in input.

10

If total variable cost is $100, total fixed cost is $100, and output is 10, what is average variable cost?

10 AVC = TVC/output.

If total variable cost is $100, total fixed cost is $100, and output is 10, what is average variable cost? Multiple choice question. $10 $1,000 $200 $20

10 Reason: AVC = TVC/output.

When output is 10, what is the total cost if total fixed cost is $50 and total variable cost is $75? Multiple choice question. $

125 Reason: Total cost = fixed cost + variable cost.

Suppose at an output level of 150 units a firm's average fixed cost is $25 and average variable cost is $50. Then the average total cost of the firm is ______. Multiple choice question. $2 Reason: Average total cost equals average fixed cost plus average variable cost. $0.50 Reason: Average total cost equals average fixed cost plus average variable cost. $75 $1,250 Reason: Average total cost equals average fixed cost plus average variable cost.

75

Where does the marginal-cost curve intersect the average-total-cost curve? Multiple choice question. Halfway between the minimum and maximum point of average total cost Reason: When marginal costs are lower than average costs, they pull average costs downward. When they are higher, they pull average costs upward. Therefore, they meet at the minimum point of average total cost. When average total cost is zero At the minimum point of average total cost At the maximum point of average total cost Reason: When marginal costs are lower than average costs, they pull average costs downward. When marginal costs are higher than average costs, they pull average costs upward.

At the minimum point of average total cost

Which curve first falls and then rises? Multiple choice question. Marginal revenue curve Average variable cost curve Demand curve Average fixed cost curve

Average variable cost curve

When a firm considers its economic costs, it considers which of the following? Multiple select question. Its explicit costs only Its implicit costs only Explicit and implicit costs All opportunity costs of resources used

Explicit and implicit costs All opportunity costs of resources used

True or false: Economic costs equal explicit costs minus implicit costs. True false question. True False

False

Which of the following are examples of implicit costs? Multiple select question. Materials Forgone rent Forgone wages Utilities

Forgone rent Forgone wages

Which of the following resources can a firm easily and quickly adjust? Multiple select question. Production-line machinery Reason: Correct choices are all variable inputs. Hourly labor Fuel Size of the factory Reason: Correct choices are all variable inputs. Raw materials

Hourly labor Fuel Raw materials

What type of opportunity cost does a firm incur when it uses resources that it already possesses instead of selling them for cash? Multiple choice question. Input Explicit Long-run Implicit

Implicit

Which of the following best describes the average variable cost curve? Multiple choice question. It is U-shaped. It is downward sloping throughout. It is upward sloping throughout. It is L-shaped.

It is U-shaped.

In the short run, if a firm wants to vary its output, what resources can it adjust? Multiple select question. Labor Materials Plant size Quantity of machinery

Labor Materials

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? Multiple choice question. Short run Production cycle Fiscal year Long run

Long run

Which of the following costs can a firm control directly and immediately? Multiple choice question. Fixed costs Reason: Fixed costs cannot be controlled in the short run. Marginal costs Average variable costs Total costs

Marginal costs

Which resource requires the most time for a firm to adjust, given a change in demand? Multiple choice question. Hourly labor Reason: Hourly labor can be quickly and easily adjusted. Fuel Reason: Fuel can be quickly and easily adjusted. Raw materials Reason: Raw materials can be quickly and easily adjusted. Plant capacity

Plant capacity

The long-run average-total-cost curve is derived from the many short-run average-total-cost curves, each of which represents a different ______. Multiple choice question. quantity of labor industry plant size management team

Plant size

What determines the shape of the long-run average-total-cost curve? Multiple choice question. Managerial specialization Profit Marginal cost Technology

Technology

Marginal cost includes which of the following? Multiple select question. All fixed and variable costs The cost savings resulting from not producing the last unit of output The cost savings resulting from producing an additional unit of output All the cost associated with producing the last unit of output

The cost savings resulting from not producing the last unit of output All the cost associated with producing the last unit of output

Economically speaking, what period of time is sufficient for new firms to enter or for existing firms to exit an industry? Multiple choice question. A fiscal year The short run A single production run The long run

The long run

What does the long-run average-total-cost curve show? Multiple choice question. The maximum level of output possible in the short run at all plant sizes The lowest minimum short-run average-total-cost curve at which a firm must produce to make a profit The sum total of all of the short-run average-total-cost curves The lowest average total cost at which any chosen output level can be produced after the firm has had time to make adjustments in plant size

The lowest average total cost at which any chosen output level can be produced after the firm has had time to make adjustments in plant size

True or false: Hourly labor, raw materials, and fuel are examples of resources a firm can easily adjust. True false question.

True

True or false: Implicit costs are the firm's opportunity costs of using its self-owned, self-employed resources. True false question. True False

True

In microeconomics, the long run is also known as which of the following? Multiple choice question. Break-even period Inventory-depletion period Fixed-plant period Variable-plant period

Variable-plant period

Multiple Choice Question Average fixed cost equals total fixed cost divided by the ______. Multiple choice question. quantity of labor marginal product of labor total costs amount of output

amount of output

Average total cost goes up when marginal cost is greater than ______. Multiple choice question. average fixed cost average variable cost marginal revenue average total cost

average total cost

Answer Mode Fill in the Blank QuestionYour Answer correct '' Total economic ---- Correct Unavailable costs equal explicit costs plus implicit costs.

economic or opportunity

----costs are part of the simple existence of a firm's plant and must be paid even when output is zero. Listen to the complete question

fixed

Forgone entrepreneurial income is an example of a(n) ______. Multiple choice question. marginal cost explicit cost payment made to an entrepreneur implicit cost

implicit cost

From the industry's viewpoint, the shortBlank 1Blank 1 short , Incorrect Unavailable run includes enough time for existing firms to dissolve and leave the industry or for new firms to be created and enter the industry.

long

Average product declines when ______. Multiple choice question. marginal product is at a maximum total product is negative average product is less than marginal product marginal product is less than average product

marginal product is less than average product

When total product declines, marginal product ______. Multiple choice question. continues rising at an increasing rate is zero Reason: Marginal product is zero when total product is at a maximum. is negative continues rising but at a decreasing rate

negative

The long-run average-total-cost curve is derived from the many short-run average-total-cost curves, each of which represents a different ______. Multiple choice question. industry management team quantity of labor plant size

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

The shape of a long-run average-total-cost curve will determine ______. Multiple choice question. the number of firms in the industry the number and size of firms in the industry the profitability of firms in the industry Reason: Profitability is determined by price relative to average total costs, not the shape of the long run average cost curve. the size of firms in the industry

the number and size of firms in the industry

When total revenue earned by an entrepreneur is equal to the sum of explicit and implicit costs, then the entrepreneur earns a(n) ______. Multiple choice question. accounting loss zero economic profit economic profit Reason: An economic profit is earned if revenues exceed the sum of all explicit and implicit costs. economic loss

zero economic profit

Which of the following explain the concept of explicit costs? (Check all that apply.) Multiple select question. A firm's monetary payments made for the use of resources owned by others. A firm's monetary payments that self-employed resources could have earned in their best alternative use. A firm's monetary payments to those who supply labor services, materials, fuel, and transportation services. A firm's monetary payments received for the use of resources owned by the firm.

A firm's monetary payments to those who supply labor services, materials, fuel, and transportation services.A firm's monetary payments made for the use of resources owned by others.

If a firm estimates that its level of output will be 40 units, it will most likely select the plant size depicted by which short-run cost curve in the accompanying figure? Multiple choice question.

ATC-2 ATC-2 would not lower costs for the firm to the lower cost of production depicted by ATC-3.

What is the difference between accounting profit and economic profit? Multiple choice question. Accounting profit equals total revenue less explicit costs. Economic profit equals total revenue less economic costs (explicit and implicit). Accounting profit equals total revenue less economic costs. Economic profit equals total revenue less explicit costs. Accounting profit equals total revenue less fixed costs. Economic profit equals total revenue less implicit costs. Accounting profit equals total revenue less implicit costs. Economic profit equals total revenue less explicit costs.

Accounting profit equals total revenue less explicit costs. Economic profit equals total revenue less economic costs (explicit and implicit).

---profit is the firm's total revenue less its explicit costs, whereas ------profit is the firm's total revenue less economic costs (explicit and implicit).

Blank 1: Accounting Blank 2: economic

costs are the monetary payments a firm makes to purchase resources from others.

Explicit

Which of the following is true regarding a firm's plant capacity? Multiple choice question. It is fixed in the long run. It is fixed in the short run. It is flexible in the short run. It is stable in the long run.

It is fixed in the short run.

Which of the following are types of resources that require more time for a firm to adjust, given a change in demand? Multiple select question. Raw materials Reason: Raw materials can be adjusted quickly and easily by a firm. Size of the factory Amount of machinery Hourly labor Reason: Hourly labor can be adjusted quickly and easily by a firm.

Size of the factory Amount of machinery