Microeconomic Ch11 - Assignment Essays

question

A firm enters into trade with:

answer

-businesses.
-government.
-individuals.

question

A firm sells 5 hats for $20 apiece, and incurs a cost of $10 apiece. The firm makes a profit of _____.

answer

$50
-Profit = Total revenue - Total cost = 5 × (20 - 10) = $50.

question

Economic profit...

answer

-includes explicit revenue and cost, and accounting profit includes explicit revenue and cost.
-includes implicit revenue and cost, and accounting profit includes explicit revenue and cost.

question

The owner of a shoe firm could instead work as an accountant to earn $300 per week. The implicit cost of her contribution to production is _____.

answer

$300

question

Using economists' framework, explicit payments to the factors of production plus the opportunity cost of the factors provided by the owners of the firm is _____.

answer

total cost

question

True or false: Ultimately, all supply comes from firms.

answer

false

question

A firm sells 10 shoes for $400, and incurs a total cost of $100. The firm makes an average profit of _____.

answer

$30
-Total profit = total revenue - total cost = $400 - $100 = $300.
-Average profit = total profit/quantity produced = $300/10 shoes = $30/shoe.

question

Using economists' framework, the amount a firm receives for selling its product or service plus any increase in the value of the assets owned by the firm is known as _____.

answer

total revenue

question

True or false: The difference between economic profit and accounting profit is that economic profit includes implicit revenue and cost, while accounting profit does not.

answer

true

question

Explicit and implicit revenue less explicit and implicit cost is equal to _____.

answer

economic profit

question

Implicit costs...

answer

include the opportunity costs of the factors of production provided by the owners of the business.

question

Total economic cost is?

answer

explicit payments to the factors of production plus the opportunity cost of the factors provided by the owners of the firm.

question

A firm is an economic institution that transforms

answer

factors of production into goods and services.

question

Using economists' framework total revenue includes

answer

the amount a firm receives for selling its product or service plus any increase in the value of the assets owned by the firm

question

George, who was previously unemployed, owns a firm that produces books. He sells 20 books on average per week for $50 each, and the cost of their production is $800. He makes a weekly accounting profit of _____.

answer

$200
-Accounting profit = 20 × 50 - 800 = $200

question

Using economists' framework, economic profit is best defined as

answer

explicit and implicit revenue less explicit and implicit cost.

question

In a long-run decision, a firm

answer

can choose among all possible production techniques.

question

A firm is constrained in regard to what production decisions it can make in the _____.

answer

short run

question

Which of the following statements is true about the short and long runs?

answer

-All inputs are variable in the long run.
-Some inputs are fixed in the short run.

question

Which of the following data is provided in a production table?

answer

The level of output given various combinations of inputs.

question

Josie, who was previously employed as a policewoman, owns a firm that produces burglary kits. She used to earn $1000 per month when she was a policewoman and she could return to that job if she wanted to do so. Now, she sells 500 kits in a month for $10 each. The cost of production is $2000. In a month, she makes an economic profit of _____.

answer

$2,000
-Economic profit = 500 × 10 - 1,000 - 2,000 = $2,000

question

The additional output that will be forthcoming from an additional worker, other inputs constant is called _____.

answer

marginal product

question

A firm can choose among all possible production techniques in the _____.

answer

long run

question

Average product is the

answer

output per worker.

question

The firm has the greatest production flexibility in which time frame?

answer

Long run

question

A production function is the relationship between _____.

answer

inputs and outputs

question

True or false: The primary distinction between a long run and a short-run decision is the degree of flexibility in decision making.

answer

true

question

The standard production function

answer

-initially exhibits increasing marginal productivity.
-eventually exhibits diminishing marginal productivity.

question

A production table is a table showing

answer

the output resulting from various combinations of factors of production or inputs.

question

The production function shown exhibits diminishing marginal productivity in area ____.

answer

question

Marginal product of workers is the

answer

the additional output that will be forthcoming from an additional worker, other inputs constant

question

Refer to the graph above. This firm is most likely to produce in region(s) _____.

answer

question

Output per worker is called _____.

answer

average product

question

The law of diminishing marginal productivity states that

answer

as more and more of a variable input is added to an existing fixed input, eventually the additional output one gets from that additional input is going to fall.

question

Which of the following tells the maximum output that can be derived from a given number of inputs?

answer

Production function

question

The standard production function exhibits

answer

first increasing, then decreasing marginal productivity

question

Variable costs _____, while fixed costs _____.

answer

change; remain constant

question

The production function shown exhibits increasing marginal productivity in area _____.

answer

question

Refer to the graph above. In which region(s) will the firm most likely choose not to produce?

answer

A and C
C
A

question

True or false: According to the law of diminishing marginal productivity, marginal product will decline more slowly as output increases.

answer

false

question

Fixed costs do not exist in which time frame?

answer

The long run

question

The main difference between variable and fixed costs is that

answer

fixed costs remain constant with the level of output, while variable costs change.

question

Variable cost are costs that

answer

change as output changes.

question

Total cost is equal to _____.

answer

fixed cost plus variable cost

question

Average total cost is the total cost

answer

divided by the quantity produced.

question

Which of the following cannot exist in the long run?

answer

Fixed costs

question

Costs that change as output changes are called _____.

answer

variable costs

question

A firm has a fixed cost of $1,200 and variable costs of $120 per unit. What is the average total cost of producing 5 units of output?

answer

$360
-Average total cost = [1,200 + 5 (120)] / 5 = $360

question

A firm has a fixed cost of $100, and variable costs of $500. What is the total cost?

answer

$600

question

Average fixed cost is fixed cost

answer

divided by quantity produced.

question

Average variable cost is the

answer

variable cost divided by the quantity produced.

question

Total cost divided by the quantity produced is called _____.

answer

average total cost

question

The total cost curve is _____.

answer

upward sloping

question

As output increases, average fixed cost _____.

answer

decreases

question

A firm has fixed costs of $400 and average variable costs of $5 per unit. What is the average total cost of producing 20 units of output?

answer

$25
-Average total cost = [400 + 20(5)] / 20 = $25

question

The graph shown illustrates cost curves for a given production function. The marginal cost curve is represented by curve _____.

answer

question

Fixed cost divided by quantity produced is called _____.

answer

average fixed cost

question

The graph shown illustrates cost curves for a given production function. Curve B represents _____.

answer

an average total cost curve

question

Variable cost divided by quantity produced is called _____.

answer

average variable cost

question

Refer to the graph. In region A the related marginal product would be

answer

rising and average product is rising.

question

Which of the following is always upward sloping?

answer

Total cost curve

question

If marginal cost is rising, we can infer that marginal productivity is _____.

answer

falling

question

As output decreases, average fixed cost _____.

answer

increases

question

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

answer

when marginal cost is less than the average cost it will pull the average down.

question

The law of diminishing marginal productivity implies that eventually

answer

both marginal and average cost curves will be upward sloping.

question

When marginal productivity falls, marginal cost _____.

answer

rises

question

When marginal cost is higher than the average cost, average cost will _____.

answer

rise

question

Refer to the graph. In region A, the related marginal cost would be

answer

falling and average variable cost is falling.

question

True or false: The average total cost curve has the same general U-shape as the average variable cost curve because the average total cost curve is the vertical sum of the average variable cost curve and the marginal cost curve.

answer

false

question

Refer to the graph. In region C, marginal cost is

answer

rising and average variable cost is rising.

1 of 70

question

A firm enters into trade with:

answer

-businesses.
-government.
-individuals.

question

A firm sells 5 hats for $20 apiece, and incurs a cost of $10 apiece. The firm makes a profit of _____.

answer

$50
-Profit = Total revenue - Total cost = 5 × (20 - 10) = $50.

question

Economic profit...

answer

-includes explicit revenue and cost, and accounting profit includes explicit revenue and cost.
-includes implicit revenue and cost, and accounting profit includes explicit revenue and cost.

question

The owner of a shoe firm could instead work as an accountant to earn $300 per week. The implicit cost of her contribution to production is _____.

answer

$300

question

Using economists' framework, explicit payments to the factors of production plus the opportunity cost of the factors provided by the owners of the firm is _____.

answer

total cost

question

True or false: Ultimately, all supply comes from firms.

answer

false

question

A firm sells 10 shoes for $400, and incurs a total cost of $100. The firm makes an average profit of _____.

answer

$30
-Total profit = total revenue - total cost = $400 - $100 = $300.
-Average profit = total profit/quantity produced = $300/10 shoes = $30/shoe.

question

Using economists' framework, the amount a firm receives for selling its product or service plus any increase in the value of the assets owned by the firm is known as _____.

answer

total revenue

question

True or false: The difference between economic profit and accounting profit is that economic profit includes implicit revenue and cost, while accounting profit does not.

answer

true

question

Explicit and implicit revenue less explicit and implicit cost is equal to _____.

answer

economic profit

question

Implicit costs...

answer

include the opportunity costs of the factors of production provided by the owners of the business.

question

Total economic cost is?

answer

explicit payments to the factors of production plus the opportunity cost of the factors provided by the owners of the firm.

question

A firm is an economic institution that transforms

answer

factors of production into goods and services.

question

Using economists' framework total revenue includes

answer

the amount a firm receives for selling its product or service plus any increase in the value of the assets owned by the firm

question

answer

$200
-Accounting profit = 20 × 50 - 800 = $200

question

Using economists' framework, economic profit is best defined as

answer

explicit and implicit revenue less explicit and implicit cost.

question

In a long-run decision, a firm

answer

can choose among all possible production techniques.

question

A firm is constrained in regard to what production decisions it can make in the _____.

answer

short run

question

Which of the following statements is true about the short and long runs?

answer

-All inputs are variable in the long run.
-Some inputs are fixed in the short run.

question

Which of the following data is provided in a production table?

answer

The level of output given various combinations of inputs.

question

answer

$2,000
-Economic profit = 500 × 10 - 1,000 - 2,000 = $2,000

question

The additional output that will be forthcoming from an additional worker, other inputs constant is called _____.

answer

marginal product

question

A firm can choose among all possible production techniques in the _____.

answer

long run

question

Average product is the

answer

output per worker.

question

The firm has the greatest production flexibility in which time frame?

answer

Long run

question

A production function is the relationship between _____.

answer

inputs and outputs

question

True or false: The primary distinction between a long run and a short-run decision is the degree of flexibility in decision making.

answer

true

question

The standard production function

answer

-initially exhibits increasing marginal productivity.
-eventually exhibits diminishing marginal productivity.

question

A production table is a table showing

answer

the output resulting from various combinations of factors of production or inputs.

question

The production function shown exhibits diminishing marginal productivity in area ____.

answer

question

Marginal product of workers is the

answer

the additional output that will be forthcoming from an additional worker, other inputs constant

question

Refer to the graph above. This firm is most likely to produce in region(s) _____.

answer

question

Output per worker is called _____.

answer

average product

question

The law of diminishing marginal productivity states that

answer

as more and more of a variable input is added to an existing fixed input, eventually the additional output one gets from that additional input is going to fall.

question

Which of the following tells the maximum output that can be derived from a given number of inputs?

answer

Production function

question

The standard production function exhibits

answer

first increasing, then decreasing marginal productivity

question

Variable costs _____, while fixed costs _____.

answer

change; remain constant

question

The production function shown exhibits increasing marginal productivity in area _____.

answer

question

Refer to the graph above. In which region(s) will the firm most likely choose not to produce?

answer

A and C
C
A

question

True or false: According to the law of diminishing marginal productivity, marginal product will decline more slowly as output increases.

answer

false

question

Fixed costs do not exist in which time frame?

answer

The long run

question

The main difference between variable and fixed costs is that

answer

fixed costs remain constant with the level of output, while variable costs change.

question

Variable cost are costs that

answer

change as output changes.

question

Total cost is equal to _____.

answer

fixed cost plus variable cost

question

Average total cost is the total cost

answer

divided by the quantity produced.

question

Which of the following cannot exist in the long run?

answer

Fixed costs

question

Costs that change as output changes are called _____.

answer

variable costs

question

A firm has a fixed cost of $1,200 and variable costs of $120 per unit. What is the average total cost of producing 5 units of output?

answer

$360
-Average total cost = [1,200 + 5 (120)] / 5 = $360

question

A firm has a fixed cost of $100, and variable costs of $500. What is the total cost?

answer

$600

question

Average fixed cost is fixed cost

answer

divided by quantity produced.

question

Average variable cost is the

answer

variable cost divided by the quantity produced.

question

Total cost divided by the quantity produced is called _____.

answer

average total cost

question

The total cost curve is _____.

answer

upward sloping

question

As output increases, average fixed cost _____.

answer

decreases

question

A firm has fixed costs of $400 and average variable costs of $5 per unit. What is the average total cost of producing 20 units of output?

answer

$25
-Average total cost = [400 + 20(5)] / 20 = $25

question

The graph shown illustrates cost curves for a given production function. The marginal cost curve is represented by curve _____.

answer

question

Fixed cost divided by quantity produced is called _____.

answer

average fixed cost

question

The graph shown illustrates cost curves for a given production function. Curve B represents _____.

answer

an average total cost curve

question

Variable cost divided by quantity produced is called _____.

answer

average variable cost

question

Refer to the graph. In region A the related marginal product would be

answer

rising and average product is rising.

question

Which of the following is always upward sloping?

answer

Total cost curve

question

If marginal cost is rising, we can infer that marginal productivity is _____.

answer

falling

question

As output decreases, average fixed cost _____.

answer

increases

question

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

answer

when marginal cost is less than the average cost it will pull the average down.

question

The law of diminishing marginal productivity implies that eventually

answer

both marginal and average cost curves will be upward sloping.

question

When marginal productivity falls, marginal cost _____.

answer

rises

question

When marginal cost is higher than the average cost, average cost will _____.

answer

rise

question

Refer to the graph. In region A, the related marginal cost would be

answer

falling and average variable cost is falling.

question

answer

false

question

Refer to the graph. In region C, marginal cost is

answer

rising and average variable cost is rising.

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