question
Which of the following is most likely to be an implicit cost for company x?
A. Foregone rent from the building owned and used by company x.
B. Rental payments to IBM equipment
C. Payments for Raw materials purchased from company Y.
D. Transportation costs paid to a nearby trucking company.
A. Foregone rent from the building owned and used by company x.
B. Rental payments to IBM equipment
C. Payments for Raw materials purchased from company Y.
D. Transportation costs paid to a nearby trucking company.
answer
A
question
Accounting Profits are typically?
answer
Greater than economic profits because the former does not take implicit costs into account.
question
Suppose that a business incurred implicit costs of $500,000 and explicit costs of $5 million in a specific year. If the firm sold 100,000 units of its output at $50 per unit its accounting:
A. profits were $100,000 and its economic profits were zero.
B. losses were $500,000 and its economic losses were zero.
C. profits were $500,000 and its economic profits were $1 million.
D. Profits were zero and its economic losses were $500,000.
A. profits were $100,000 and its economic profits were zero.
B. losses were $500,000 and its economic losses were zero.
C. profits were $500,000 and its economic profits were $1 million.
D. Profits were zero and its economic losses were $500,000.
answer
D
question
Which of the following is a short run adjustment?
A. A local bakery hires 2 additional workers
B. Six new firms enter the plastics industry.
C. The number of farms in the united states declines by 5%
D. BMW constructs a new assembly plant in south Carolina.
A. A local bakery hires 2 additional workers
B. Six new firms enter the plastics industry.
C. The number of farms in the united states declines by 5%
D. BMW constructs a new assembly plant in south Carolina.
answer
A
question
The long run is characterized by?
answer
The ability of the firm to changes its plant size
question
The Law of Diminishing Returns indicates that:
answer
As extra units of a variable resources are added to a fixed resource, marginal product will decline beyond some point.
question
The first, second, and third workers employed by a firm add 24, 18, and 9 units to a total product respectively. Therefore, we can conclude that:
A. marginal product of the third worker is 9
B. the third worker has to work with poorer quality tools and raw materials.
C. the firm will not want to hire more than three workers.
D. the first workers puts forth more effort than the second and third workers.
A. marginal product of the third worker is 9
B. the third worker has to work with poorer quality tools and raw materials.
C. the firm will not want to hire more than three workers.
D. the first workers puts forth more effort than the second and third workers.
answer
A
question
For most producing firms:
answer
Average total costs decline as output is carried to a certain level, and then begin to rise.
question
In the short run the sure screen t shirt co is producing 500 units of output. its average variable costs are $2.00 and its average fixed costs are $.50. The firms total costs:
A. are $2.50
B. are $1,250
C. are $750
D. are $1,100
A. are $2.50
B. are $1,250
C. are $750
D. are $1,100
answer
B
question
When diseconomies of scales occur:
answer
the long run average total cost curve rises
question
If a firm increases all of its inputs by 10% and its output increases by 15%, then:
A. it is encountering diseconomies of scale
B. it is encountering economies of scale
C. the law of diminishing returns is taking hold
D. the firms long run ATC curve will be rising
A. it is encountering diseconomies of scale
B. it is encountering economies of scale
C. the law of diminishing returns is taking hold
D. the firms long run ATC curve will be rising
answer
B
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