Chapter Thirteen - Assignment Essays

question

Economists normally assume that the goal of a firm is to

answer

maximize its profit

question

If Danielle sells 300 wrist bands for $0.50 each, her total revenues are

answer

$150

question

The Three Amigo's company produced and sold 500 dog beds. The average cost of production per
dog bed was $50. Each dog be sold for a price of $65. The Three Amigo's total costs are

answer

$25,000

question

Trevor's Tire Company produced and sold 500 tires. The average cost of production per tire was $50. Each tire sold for a price of $65. Trevor's Tire Company's total profits are

answer

$7,500

question

A firm's opportunity costs of production are equal to its

answer

explicit costs + implicit costs

question

The value of the business owner's time is an example of an

answer

implicit cost of production

question

The amount of money that firm pays to buy inputs is called

answer

total cost

question

Bubba is a shrimp fisherman who used $2,000 from his personal savings account to buy a boat and equipment for his shrimp business. The savings account paid 2% interest. What is Bubba's annual opportunity cost of the financial capital that he invested in his business?

answer

$40

question

Bubba is a shrimp fisherman who could earn $5,000 as a fishing tour guide. Instead, he is a full-time shrimp fisherman. In calculating the economic profit of his shrimp business, the $5,000 that Bubba gave up is counted as part of the shrimp business's

answer

implicit costs

question

A difference between explicit and implicit costs is that implicit costs

answer

do not require a direct monetary outlay by the firm, whereas explicit costs do

question

Economic profit is equal to total revenue minus the

answer

opportunity cost of producing goods and services

question

Accounting profit is equal to total revenue minus

answer

the explicit cost of producing goods and services

question

The things that must be forgone to acquire a good are called

answer

opportunity cots

question

Assume a certain firm regards the number of workers it empolys as variable but regards the size of its factory as fixed. This assumption is often realistic in the

answer

short run but not in the long run

question

A production function describes how a firm turns

answer

inputs into output

question

The marginal product of labor is equal tot eh increase in output obtained from

answer

one unit increase in labor

question

When the marginal product of an input declines as the quantity of that input increases, the production function exhibits

answer

diminishing marginal product

question

Kate is a florist. Kate can arrange 20 bouquets per day. She is considering hiring her husband William to work for her. Together Kate and William can arrange 35 bouquets per day. What is William's
marginal product?

answer

15 bouquets

question

Kate is a florist. Kate can arrange 20 bouquets per day. She is considering hiring her husband William to work for her. William can arrange 18 bouquets per day. What would be the total daily output of
Kate's firm if she hired her husband?

answer

38 bouquets

question

As Bubba's Bubble Gum Company adds workers while using the same amount of machinery, some
workers may be underutilized because they have little work to do while waiting in line to use the
machinery. When this occurs, Bubba's Bubble Gum Company encounters

answer

diminishing marginal product

question

A total-cost curve shows the relationship between quantity of output produced and

answer

the total cost of production

question

If the total cost curve gets steeper as output increases, the firm is experiencing

answer

diminishing marginal product

question

One assumption that distinguishes short-run cost analysis from long0run cost analysis for a profit-maximizing firm is that in the short run, the

answer

size of the factory is fixed

question

Marginal cost is the change in total cost resulting from the production of

answer

one more unit of output

question

Fixed cost remains the same irrespective of units of

answer

output produced

question

The cost of mortgage on the building is

answer

fixed

question

The cost of jet fuel for an airplane is

answer

variable

question

Average total cost curves decline at first because fixed cost is

answer

spread out over larger amounts of production

question

If a firm produces nothing, what cost will be zero?

answer

variable cost

question

The cost of producing the typical unit of output is the firm's

answer

average total cost

question

The average fixed cost curve always declines with

answer

increased levels of output

question

The efficient scale of the firm is the quantity of output that minimizes

answer

average total cost

question

When marginal cost is less than average total cost, average total cost is

answer

falling

question

Suppose that a firm's long-run average total costs of producing televisions decreases as it produces between 10,000 and 20,000 televisions. For this range of output, the firm is experiencing

answer

economies of sale

question

Average total cost is increasing whenever marginal cost is

answer

greater than average total cost

question

Marginal cost is equal to average total cost when average total cost is at its

answer

minimum

question

Lease payments for the land on which a firm's factory stands is an example of an

answer

explicit cost of produciton

question

Economies of scale arise when workers are able to

answer

specialize in a particular task

question

Assuming that implicit costs are positive, accounting profit is

answer

greater than economic profit

question

Constant returns to scale occur when the firm's long-run average total costs are

answer

constant as output increases

question

Diseconomies of scale occur when a firm's long-run average total costs are

answer

increasing as output increases

question

Firms may experience diseconomies of scale when large management structures are

answer

bureaucratic and inefficient

1 of 42

question

Economists normally assume that the goal of a firm is to

answer

maximize its profit

question

If Danielle sells 300 wrist bands for $0.50 each, her total revenues are

answer

$150

question

The Three Amigo's company produced and sold 500 dog beds. The average cost of production per
dog bed was $50. Each dog be sold for a price of $65. The Three Amigo's total costs are

answer

$25,000

question

Trevor's Tire Company produced and sold 500 tires. The average cost of production per tire was $50. Each tire sold for a price of $65. Trevor's Tire Company's total profits are

answer

$7,500

question

A firm's opportunity costs of production are equal to its

answer

explicit costs + implicit costs

question

The value of the business owner's time is an example of an

answer

implicit cost of production

question

The amount of money that firm pays to buy inputs is called

answer

total cost

question

answer

$40

question

answer

implicit costs

question

A difference between explicit and implicit costs is that implicit costs

answer

do not require a direct monetary outlay by the firm, whereas explicit costs do

question

Economic profit is equal to total revenue minus the

answer

opportunity cost of producing goods and services

question

Accounting profit is equal to total revenue minus

answer

the explicit cost of producing goods and services

question

The things that must be forgone to acquire a good are called

answer

opportunity cots

question

Assume a certain firm regards the number of workers it empolys as variable but regards the size of its factory as fixed. This assumption is often realistic in the

answer

short run but not in the long run

question

A production function describes how a firm turns

answer

inputs into output

question

The marginal product of labor is equal tot eh increase in output obtained from

answer

one unit increase in labor

question

When the marginal product of an input declines as the quantity of that input increases, the production function exhibits

answer

diminishing marginal product

question

answer

15 bouquets

question

answer

38 bouquets

question

answer

diminishing marginal product

question

A total-cost curve shows the relationship between quantity of output produced and

answer

the total cost of production

question

If the total cost curve gets steeper as output increases, the firm is experiencing

answer

diminishing marginal product

question

One assumption that distinguishes short-run cost analysis from long0run cost analysis for a profit-maximizing firm is that in the short run, the

answer

size of the factory is fixed

question

Marginal cost is the change in total cost resulting from the production of

answer

one more unit of output

question

Fixed cost remains the same irrespective of units of

answer

output produced

question

The cost of mortgage on the building is

answer

fixed

question

The cost of jet fuel for an airplane is

answer

variable

question

Average total cost curves decline at first because fixed cost is

answer

spread out over larger amounts of production

question

If a firm produces nothing, what cost will be zero?

answer

variable cost

question

The cost of producing the typical unit of output is the firm's

answer

average total cost

question

The average fixed cost curve always declines with

answer

increased levels of output

question

The efficient scale of the firm is the quantity of output that minimizes

answer

average total cost

question

When marginal cost is less than average total cost, average total cost is

answer

falling

question

Suppose that a firm's long-run average total costs of producing televisions decreases as it produces between 10,000 and 20,000 televisions. For this range of output, the firm is experiencing

answer

economies of sale

question

Average total cost is increasing whenever marginal cost is

answer

greater than average total cost

question

Marginal cost is equal to average total cost when average total cost is at its

answer

minimum

question

Lease payments for the land on which a firm's factory stands is an example of an

answer

explicit cost of produciton

question

Economies of scale arise when workers are able to

answer

specialize in a particular task

question

Assuming that implicit costs are positive, accounting profit is

answer

greater than economic profit

question

Constant returns to scale occur when the firm's long-run average total costs are

answer

constant as output increases

question

Diseconomies of scale occur when a firm's long-run average total costs are

answer

increasing as output increases

question

Firms may experience diseconomies of scale when large management structures are

answer

bureaucratic and inefficient

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