question
When output is 100 units, the firm's total fixed cost is $500. What will this firm's total fixed cost be if output doubles to 200 units?
answer
$500
question
In the short run, average total cost first decrease and then increase as more output is produced because:
answer
marginal cost is at first less than average total costs then rises above it .
question
Jose owns a specialty toothbrush store. He currently sells 1,200 toothbrushes per year. If he doubles the size of his store so he can sell 2,400 toothbrushes per year and his long run total average cost per toothbrush decreases, we know that Jose is experiencing:
answer
economies of scale
question
Joie owns a small souvenir shop, where she works full-time, her total revenue last year was $100,000 and her rent was $3,000 per month. She pay's her one employee $2,000 per month and the cost of inventory and overhead averages $500 per month. Joie could earn $35,000 per year as the manager of a competing shop nearby. Her total implicit costs last year were:
answer
$100,000
question
Accounting profit ignores which of the following
answer
explicit costs
question
Implicit costs can be difficult to measure because:
answer
Business owners cannot always observe them directly
question
A firm's short run supply curve is equal to the firm's
answer
Marginal cost curve above minimum average variable cost (AVC)
question
If Sqeaky Clean is a perfectly competitive firm and is currently incurring economic losses of $580
answer
Firms will exit the market
question
FIGURE : A firm would produce in the long run only if the market price is
answer
Above $20
question
Where is a perfectly competitive firm's zero profit output level?
answer
at the minimum point of the average total cost curve
question
Point _______ corresponds to the profit maximizing quantity that a competitive firm would produce
answer
C
question
FIGURE if the price is $8 the firm is making
answer
a profit and more firms will enter the market in the long run
question
All current production levels , the marginal revenue of a competitive firm is $12 and the marginal cost of the firm is $12, the firm should
answer
continue producing at current levels
question
CHART Assuming that all firms in this market have the same cost structure, the market price is
answer
$5
question
FIGURE A firm would shut down in the short run if the price is
answer
Below $4
question
FIGURE The profit maximizing price and quantity are
answer
$25 and 1,000 respectively
question
Control of resources is an example of
answer
a natural barrier
question
FIGURE The profit when a firm is profit maximizing is
answer
$20,000
question
Both monopolies and competitive firms
answer
try to maximize profits
question
FIGURE The total cost when a firm is profit maximizing is
answer
$50,000
question
FIGURE The deadweight loss associated with this profit maximizing monopoly is represented by areas
answer
E and H
question
FIGURE The consumer surplus associated with this profit maximizing monopoly is represented by areas
answer
A and B
question
Deadweight loss exists in a monopoly because the monopolist
answer
charges a price that is above marginal revenue
question
FIGURE The total revenue when a firm is profit maximizing is
answer
$70,000
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