question
Suppose a firm wants to calculate its total revenue. In addition to quantity, it would need to know _____.
answer
price
question
Which of the following is an example of an explicit cost?
answer
materials costs
question
The price of leisure is the ________ forgone wages.
answer
opportunity cost of
question
The CEO of a large company believes that if he raises wages for his workers by 5%, this will lead to a smaller-than-5% increase in worker hours. The CEO believes that wage elasticity of labor supply at his company is ________.
answer
inelastic
question
Under which of the following conditions will a firm take longer to earn significant profits, all else equal?
answer
a firm with high fixed costs
question
In the short run, a type of cost that does not change with the level of output produced is a(n) __________.
answer
fixed cost
question
A firm produces 1,000 widgets. It sells each widget for $1. In order to calculate the firm's average profits, one would need to know _______.
answer
total costs
question
Which of the following is an example of an intertemporal choice in financial markets?
answer
to determine how much to save for retirement
question
A decrease in the price of a product has a substitution effect and ________, which says that after the price decline, the consumer could purchase the same goods as before, and still have money left over to purchase more.
answer
an income effect
question
Suppose a firm is currently experiencing diseconomies of scale. Over time, one would expect firm size to ______.
answer
decrease
question
A factory that makes 1,000 widgets can do so at an average cost of $20 per widget. A factory that makes 2,000 widgets can do so at an average cost of $45 per widget. In this case, the market likely experiences ______.
answer
diseconomies of scale
question
Refer to the figure. When a firm's long run average cost curve is tangent to its short run average cost curve at a point where short run average total costs are falling, that firm is experiencing _______.
answer
economies of scale
question
Which of the following is a microeconomic problem?
answer
determining how many workers a firm needs to hire to maximize profit
question
The rent for the store is an __________.
answer
explicit cost
question
The cost for the delivery truck is an
answer
explicit cost
question
The sacrificed $3,000 in interest that the business owner gave up when he removed $100K from his bank to start the business is an __________.
answer
implicit cost
question
The amount spent on wages for the employees is an __________.
answer
explicit cost
question
The sacrificed wage that the business owner cannot earn from their old job because they have started a new full-time business is an __________.
answer
implicit cost
question
The difference between Economic profit & Accounting profit is & Economic Profit = Total Revenue - Explicit cost - Implicit cost
answer
Economic profit incorporates implicit costs into the cost models when calculating profit
B. Accounting profit = Total Revenue - Explicit cost
C. Accounting profit can overstate the profits if the business owner has spent a lot of money on implicit costs for the business
B. Accounting profit = Total Revenue - Explicit cost
C. Accounting profit can overstate the profits if the business owner has spent a lot of money on implicit costs for the business
question
Fixed inputs are
answer
Inputs that cannot be increased or decreased in a short time in order to increase or decrease output
question
Variable inputs are
answer
Inputs that can be varied within a short time in order to increase or decrease output
question
The mortgage on the factory is a ___________.
answer
fixed cost
question
The payment for the input of raw materials is usually a ___________.
answer
fixed cost
question
In Economics, the Short run is
answer
A time horizon within which output can be adjusted only by changing the amounts of variable inputs used while fixed inputs remain unchanged; At least one cost is a fixed cost
question
In economics, a firm that faces no competitors is referred to as _________________.
answer
a monopoly
question
________________________ arises where many firms are competing in a market to sell differentiated products.
answer
...
question
The term _____________ is used to describe the additional cost of producing one more unit.
answer
total cost
question
The term __________________ describes a situation where in the long-run, the quantity of output rises yet the average cost of production falls.
answer
economies of scale
question
_____________ is calculated by taking the quantity of everything that is sold and multiplying it by the price it was sold at.
answer
Total revenue
question
The long-run average total cost curve is unique because
answer
it allows all factors of production to change.
question
Fixed costs are important because, at least in the ___________, the firm _______________
answer
...
question
Whatever the firm's quantity of production, _____________ must exceed total costs if it is to earn a profit.
answer
...
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