question
Cash payments to a steel mill for steel used in production would be an example of:
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C. Explicit Cost
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Sam quits his job as an airline pilot and opens his own pilot training school. He was earning $40,000 as pilot. He withdraws $10,000 from his savings where he was earning 6% interest and uses the money in his new business. He uses a building he owns as hanger and could rent it out for $5,000 a year. Sam's explicit cost this year equals?
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B. 39,000
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A firms opportunity cost of using resources provided by the firm's owner is called?
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D. Implicit Cost
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Normal profit is defined as a
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D. Minimum necessary to keep a firm
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The change in total cost that results in the production of one additional unit is called
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C. Marginal cost
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the marginal cost is the
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A. both b and C
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Ex 7-7 by filing in the blanks it can be determined that the second unit of the output is?
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E. 1,800
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by filling in the blanks for 7-8 the fixed cost for producing 6 pizzas is shown to be equal to
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A. $100
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By filling in the blank for 7-8 the variable cost of producing 4 pizzas is shown to be equal to
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A. $10
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As shown in ex. 7-9 the total cost for producing 5 units is
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C. $250
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By filling in the blanks in ex 7-12 the AVC of 3 pizzas is shown to be equal to
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B. $13.33
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Which of the following best describes marginal cost
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A. Change in total cost when one additional unit of output is produced
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If the minimum points of all the possible short run average cost curves become successively
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C. there are economies of sale
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Diseconomies of scale exist over the range of output for which the long run average cost curve is
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C. rising
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The primary source of scale diseconomies appears to be:
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E. the organization difficulties of managing
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Given the short-run average total cost curves in ex 7-15, what level of output per week minimizes ATC?
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B. 1,000 units
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Given the average run total cost curves in exhibit 7-17 what level of output per week minimizes average total cost?
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B. Q2
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Which of the following correctly explain why sellers in a perfectly competitive market are price takers?
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A. the change in total cost
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Which of the following best explains why a firm in a perfectly competitive market must take the price determined in the market?
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B. if a price taker increased its price, consumers would buy from other suppliers
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Under perfect competition, firm is a price take because?
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D. setting a price higher than the going price results in
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A perfectly competitive firm in the short run answer can earn
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D. All of the above
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A perfectly competitive firm maximizes profits or minimizes losses in the short run by producing at the out put level
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A. marginal revenue equals marginal cost
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In the short run a firm should shut down its operation if
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C. its losses are greater than TFC at the MR = MC point
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If a firm equates MR and MC then
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D. profits are at the maximum or losses are at the minimum
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Consider a firm with the following cost info... the price of the output is?
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B.$14
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if a fishing boat owner brings 10K fish to a market price is $7 per fish...
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E. 10,000
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A fishing boat owner brings 50k fish to a market price of $4
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A. $1
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When a price of a good is constant, the marginal revenue per unit of output is the same as
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C. price
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The supply curve of a price taker firm in the short run is the
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C. Portion of the firms marginal cost curve that lies above the average variable cost curve
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Above the shutdown point a competitive firm supply curve coincides with its
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B. marginal cost curve
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In exhibit 8-4 this firm is currently producing 14 units of outputs. what would you advice this firm to do?
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D. Increase output to 16
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In ex 8-11 the profit, the profit maximizing output level at the price of $8 is?
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E. 10
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As shown in exhibit 8-12, if the price is OB, the firms total cost... output is:
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A. OZID
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As shown by five points in Ex 8-13 the firms economic profit is maximized when the price is
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E. P5
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In ex. 8-16 if the market price of its product is $50 per unit then the firm will
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A. break even
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As shown in ex 8-17 the price at which the firm earns zero economic profit in the short run is
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E. $20 per unit
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the long run is a planning period
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A. during which the firm can vary its plant size
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If the expansion of output is an industry leads to unchanged resources prices, the industry is most likley to be
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B. Increasing cost Industry
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If input prices for a perfectly competitive industry remain constant as the output expands in the long run the industry supply curve will:
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C. Be perfectly horizontal
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the long run supply curve for a competitive constant cost industry is
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A. Horizontal
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