MicroEconomics Ch13 SB

Gloria has decided to start her own snow removal business. To purchase the necessary equipment, Gloria withdrew $2,000 from her savings account, which was earning 3% interest, and borrowed an additional $4,000 from the bank at an interest rate of 7%. What is Gloria's annual opportunity cost of the financial capital that has been invested in the business?

$340

Refer to Scenario 13-16. In producing the 7,000 staplers, the firm's average variable cost was

$4.00.

Refer to Table 13-13. What is average fixed cost when output is 40 units?

$1.00

Refer to Scenario 13-6. Tony's accounting profit equals

$170.

Refer to Scenario 13-5. Emily's implicit cost of capital is

$2,000.

Refer to Scenario 13-2. Suppose Chelsea purchases the factory using her own money. What is Chelsea's annual implicit opportunity cost of purchasing the factory?

$3,000

The Big Box corporation produced and sold 500 units of output. The average cost of production per unit was $50. Each unit sold for a price of $65. The Big Box corporation's total revenues are

$32,500.

Refer to Scenario 13-11. Zach's accounting profit for the year was

$6,000.

Refer to Scenario 13-7. What are Wanda's total economic profits?

$96

Economists normally assume that the goal of a firm is to (i) sell as much of its product as possible.(ii)set the price of the product as high as possible.(iii)maximize profit.

(iii) only

Refer to Table 13-1. What is total output when 5 workers are hired?

190

Refer to Table 13-3. If the firm can sell its output for $1 per unit, what is the profit-maximizing level of output?

230 units

Refer to Table 13-2. At which number of workers does diminishing marginal product begin?

3

Bev is opening her own court-reporting business. She financed the business by withdrawing money from her personal savings account. When she closed the account, the bank representative mentioned that she would have earned $300 in interest next year. If Bev hadn't opened her own business, she would have earned a salary of $25,000. In her first year, Bev's revenues were $30,000. Which of the following statements is correct?

Bev's economic profit is $4,700.

When marginal cost is rising, average variable cost

could be rising or falling.

Refer to Scenario 13-13. Joan's production function exhibits

decreasing marginal product.

The marginal product of labor is equal to the

increase in output obtained from a one unit increase in labor.

Refer to Scenario 13-13. Joan's total-cost curve is

increasing at an increasing rate.

Economies of scale occur when a firm's

long-run average total costs are decreasing as output increases.

Constant returns to scale occur when a firm's

long-run average total costs do not vary as output increases.

Economic profit is equal to total revenue minus the

opportunity cost of producing goods and services.

Total revenue equals

price x quantity.

Refer to Figure 13-2. The graph illustrates a typical

production function.

Refer to Table 13-5. Diminishing marginal product begins with the addition of the

third worker.

Analyzing the behavior of the firm enhances our understanding of

what decisions lie behind the market supply curve.