Econ Final Review
In the above table, based on the four-firm concentration ratio, which industry is the most concentrated?
Blodgets
The above table shows the short-run total product schedule for the campus book store. At what levels of books sold per hour will the marginal product of labor be greater than the average product of labor?
Both A and B are correct
Technological efficiency occurs when the firm produces a given output
By using the least amount of inputs
The principal-agent problem refers to the fact hat firms must
Devise incentives to get employees to work in the best interest of the firms owners
A company needs to know the price of each resourcce
Economic Efficiency
The difference between the market price a new car used by a firm and the market price of the same car one year laters known as
Economic depreciation
Electric utility companies have built larger and larger electric generating stations and, as a result, the long run-average cost of producing each kilowatt hour decreased. this is an example of
Economies of Scale
When Fatz confectionery can lower the cost of manufacturing and packaging a pound of candy by doubling the quantity manufactured and package each day, it will achieve
Economies of scale
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
Which of the following statements regarding principal-agent relations is correct?
Managers are both principals and agents
Dell uses outsourcing, that is, dell buys the components of the computers it produces from other firms. This is an example of
Market coordination
The average product of labor is equal to the
total product divided by the total number of workers hired
Which of the following statements is true?
when marginal product is less than average product, average product is decreasing
An advantage of the corporate form of organization is that
Owners have limited liability
The long run is a period of time in which
all factors of production are variable
An example of a variable factor of production in the short run is
an employee
Economists define the short run as a period of time so short that
at least one factor of production cannot be varied
The short run is a time frame in which
at least one factor of production is fixed
In the above figure the long run average cost curve exhibits diseconomies of scale
between 20 and 25 units per hour
In the long run, a firm can vary
both its labor and its capital
If a firms marginal product of labor is less than its average product of labor, then an increase in the quantity of labor it empolys definitely will
decrease its average product of labor
Taco Bell produces both tacos and burriros because when it does so, taco bell experiences
economies of scope
The average total cost curves for plant 1 are shown in the figure above. Over what range of output is it efficient to operate plant 2?
greater than 25
Use the data in the table above and suppose that labor is the only variable factor of production. When 122 dozen donuts are produced at Decent Donuts, the MC curve
has a postive slope
The marginal product of labor is equal to the
increase in the total product that results from hiring one more worker with all other inputs remaining the same
As output increases, total cost blank, total fixed cost blank, and total variable cost, blank.
increase;does not change;increases
A firms average total cost is 80 and its fixed cost is 1000 and its output is 100 units. Its average variable cost
is more than $60
The output at which average variable cost is a minimum is blank than the output at which blank is a minimum
less than; average total cost
Silivios Pizza is a small pizzeria
less than; increases
Diseconomies of scale definietly means that as the firm increases its output it
long-run average total cost increases
All the decisions made by people who operate firms have one overriding objective, which is to
make maximum attainable profit
When the total product curve is drawn in a figure that measures employment along the horizontal axis, it is a graph that shows the
maximum output attainable for each quantity of labor employed
Total product is
maximum output that a given quantity of labor can produce
In the short run
no firm experiences economies of scale.
One reason why firms replace markets for some activities is that firms
reduce the number or transactions required
A cost that has already been made and cannot be recovered is called
sunk cost
After constructing a new factory the cost of building the factory is
sunk cost
When a firm is experiencing economies of scale
the lrac curve slopes downward
the long run is distinguished from the short run because only in the long run
the quantities of all factors of production can be varied
The short run is a period of time in which
the quantity of at least one factor of production is fixed
In the short run
the size of the plant is fixed
The above table gives techniques jitters coffee company can use to package 5,000 pounds of coffee. If the cost of capital is $50 per unit and the cost of labor is $100 per unit, the economically efficient technique for packaging 5000 pounds of coffee is
A
The table above shows four methods of producing 10 computer desks a day. If the cost of a worker is $100 a day and the cost of capital is $100 a day, the method that is economically efficient is
A
Using the data in the above table, if the price of an hour of labor is $20 and the price of a unit of capital is $10, then the most economically efficient technique for producing 100 sweaters is
A
In the above figure, the marginal cost curve is curve
A.
When Acme Inc. produces a certain amount of output by using the least amount of inputs, Acme Inc. definitely
Achieves technological efficiency
By making most of its employees owners of the company, United Airlines attempted to
Address the principal-agent problem between the workers and managers
Mr.Sweet opened a candy store. He rented a building for $30,000 a year.
$115,000
The above table gives some production and cost information for Flaming Fernados, a resaurant that sell fiery frijoles. What is the average total cost of producing 4500 frijoles?
$2
The table above gives production information for Bobs baseball cap company.
$200
Tudors Deli and Catering could have sold their delivery van on December 31,2010. If they could sell the same van on December 31, 2011 for 13,000 then the economic depreciation is
$3,000
The table above gives costs at Jans Bike Shop
$300
The above table shows some cost data for traces tents. What is the average total cost when output is 3?
$40
Suppose that Tracy and Pat start a business. Because of a series of bad decisions by Tracy, the company goes bankrupt, owning a total of 50,000. Tracy is penniless and pat is a millionaire. Fit ehe company were organized as a partnership, Pat would be responsible for
$50,000 of debt
Bud opened a flower shop. What was Buds opportunity cost of running his business?
$57,300
Heidi quit her job as a chef to start her own restaurant. What is Heidi's economic profit for the year?
-$10,000
If an industry were perfectly competitive, the four-firm concentration ration would be close to blank and the HH index would be close to
0 0
Silvios pizza is a small pizzeria
11.00
The above table shows the market shares for all the landscaping services in a suburban area. the herfindahl hirschman index equals
1600
Cindys sweaters production function is shown in the above table. Cindy rents town knitting machines for $30 a day each and hires workers at a wage rate of $40 a day. What is the marginal cost of the 19th sweater?
20.00
Using the table above, what is the marginal product of the 5th worker hired at decent donuts?
22 dozen donuts per day
Using the data in the above table, if the firm employs 5 workers, total product and average product and marginal product of the fifth worker are
25, 5.00. and 2 respectively
Sheila sports shop is a very popular sporting goods store. Sheila costs for resources bought in the market equal
330,000 per year
In the above table, the marginal product of the third worker is
4
The above table shows the total product of producing baseball hats. The average product of 3 workers is equal to
6.00 baseball hats
The above table shows the market shares for all the landscaping services in a suburban area. The four-firm concentration ratio equals
65 percent
In the above table, the marginal product of the 7th worker is 6. What is the total product when 7 workers are employed?
70
Based on the above table, which shows the firms and sales in an industry, what is the four-firm concentration ratio
74
There are six firms in an industry, with market shares of 50 percent, 25 percent, 10 percent, 10 percent, 3 percent, and 2 percent. The four firm concentration ratio is blank and the HHI is
95;3338
An economic profit for a self employed entrepreneur is
A profit over and above opportunity cost
In a corporation, the managers are the stockholders
Agents
If as output increase average product increase, then
Average variable cost decreases
In the above figure, the toal fixed cost curve is curve
C.
Over the years, the U.S. economy has become increasingly
Competitive
Where large amounts of capital are used, the dominant form of business organization is the
Corporation
Unlimited liability is NOT a characteristic of
Corporations
Which of the following types of business organization have limited liability?
D 111 only
The average total cost curves for plants ABC and D are shown in the above figure. It is possible that long run average cost curve runs through points
D E and F
A firm finds that it can produce several different goods at a lower average cost by using some of the same production facilities than it could if it produced each of the goods with separte production facilities. This firm is
Gaining economies of scope
The above table shows the market shares for all the landscaping services in a suburban area. A merger between the three largest firms would
Increase the four-firm concentration ratio and increase the herfindal-hirschman index
Profit Maximization
Increases the likelihood that a firm will survive.
If a firm chooses to produce 100 unites of output for $150 with 10 units of labor and 12 units of capital when they could produce the same 100 units for $120 with 10 units of labor and 8 units of capital, the firm is technologically
Inefficient, Inefficient
Which of the following statements does not correctly characterize normal profit?
It is equal to a firms total revenue minus its opportunity cost
What is the major advantage of the corporte form of business organization
Its owners have limited liability
Even though the market for bricks has a low concentration ratio nationally, the us justice department might still scrutinize any mergers in this industry because the
Market is regional not national, and the regional concentration might by high
The most important goal of the firm is to
Maximize its profits
The table below shows four alternative techniques for assembling a car. The cost of labor is $20 and the cost of capital is $10 per hour. Which of the four techniques for assembling a car is economically efficient?
T-4
In the above table, if the price of labor is $10 per hour and the price of capital is $20 per unit, which method of producing 50 space crafts is economically efficient?
Techniquie Y
Which of the following is a correct statement?
Technological efficiency depends only on production methods, while economic efficiency depends on the costs of resources.
Emma owns a firm that produces umbrellas. Currently emma produces 2500 umbrellas a day. Emma cannot produce more umbrellas in a day unless she purchases another machine or else hires more workers. Emma is
Technologically
Joe quits his job as an insurance agent and opens his own sporting goods store. If something accountant are greater than zero then
There is not enough information to determine his economic profit, if any.
Kris wants to purchase a house. She buys newspapers to read the classified advertisements and spends her evenings with realtors looking at houses. Kris has incurred th blank costs of making a purchases.
Transactions
The national concentration ratio
Underestimates concentration for the newspaper industry and overestimates it for the automobile industry
The owner of a proprietorship has blank liability and blank required to use all of his or her entire wealth to pay for the firms losses
Unlimited; might be
Under oligoply, there are blank firms selling products that are
a few; either identical or different