question
Economies of scale may arise from all but one of the following. Which one is it?
answer
government economic subsidies protect firms from competition to avoid losses.
question
If a comparison between average cost and price reveals whether a firm is earning profits, then a comparison between average variable cost and price reveals
answer
whether the firm is earning profit if fixed costs are left out of the calculation.
question
I'MaGadgetCo. produces and sells widgets. Last year, it produced 9,000 widgets and sold each one for $8. To produce the 9,000 widgets, the company incurred variable costs of $27,000 and a total cost of $36,000. I'MaGadgetCo's average fixed cost to produce 9,000 widgets was
answer
$1
question
_____________ is calculated by taking the quantity of everything that is sold and multiplying it by the sale price.
answer
Total revenue
question
___________ include all spending on labor, machinery, tools, and supplies purchased from other firms.
answer
total costs
question
In economics, a firm that faces no competitors is referred to as _________________.
answer
a monopoly
question
Whatever the firm's quantity of production, _____________ must exceed total costs if it is to earn a profit.
answer
total revenue
question
______________ include all of the costs of production that increase with the quantity produced.
answer
variable costs
question
In microeconomics, the term _____________________ is synonymous with economies of scale.
answer
increasing returns to scale
question
If I'maJuiceCo. establishes a bottling plant in Delaware, it will most likely
answer
use production technologies that conserve on the number of workers.
question
The term _____________ is used to describe the additional cost of producing one more unit.
answer
marginal cost
question
The _____________________ curve will always lie below the curve for average cost because average cost includes _____________ in the numerator of the calculation.
answer
average variable cost; fixed costs
question
Which of the following should typically be ignored because spending has already been made and cannot be changed?
answer
sunk costs
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