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