Ch.13 - Custom Scholars
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# Ch.13

question
Accounting profit is equal to total revenue minus
Explicit costs
question
Economic profit is equal to total revenue minus
the sum of implicit and explicit costs
question
Madelyn owns a small pottery factory. She can make 1,000 pieces of pottery per year and sell them for \$100 each. It costs Madelyn \$20,000 for the raw materials to produce the 1,000 pieces of pottery. She has invested \$100,000 in her factory and equipment: \$50,000 from her savings and \$50,000 borrowed at 10 percent (assume that she could have loaned her money out at 10 percent, too). Madelyn can work at a competing pottery factory for \$40,000 per year. The accounting profit at Madelyn's pottery factory is
\$75,000
question
Madelyn owns a small pottery factory. She can make 1,000 pieces of pottery per year and sell them for \$100 each. It costs Madelyn \$20,000 for the raw materials to produce the 1,000 pieces of pottery. She has invested \$100,000 in her factory and equipment: \$50,000 from her savings and \$50,000 borrowed at 10 percent (assume that she could have loaned her money out at 10 percent, too). Madelyn can work at a competing pottery factory for \$40,000 per year. The accounting profit at Madelyn's pottery factory is
\$30,000
question
If there are implicit costs of production,
accounting profit will exceed economic profit
question
Which of the following is a variable cost in the short run?
wages paid to factory labor
question
The 3 amigos company produced and sold 500 dog beds. The average cost of production per dog bed was \$50. Each dog bed can be sold for a price of \$65. The 3 amigos total costs are
\$25,000
question
Cindy's car wash has average variable costs of \$2 and average fixed costs of \$3 when it produces 100 units of output (car washes). The firms total cost is
\$500
question
A firm produces 300 units of output at a total cost of \$1,000. If fixed costs are \$100
Average variable cost is \$3
question
What is the shape of the marginal cost curve for this firm?
Upward-sloping
question
The average fixed cost of producing 4 units is
\$2.50
question
The average total cost of producing 3 units is
\$9.33
question
The marginal cost of changing production from 3 units to 4 units is
\$8
question
The efficient scale of production is
4 units
question
When marginal costs are below average total costs
average total costs are falling
question
If marginal costs equal average total costs
Average total costs are minimized
question
If, as the quantity produced increases, a production function first exhibits increasing marginal product and later diminishing marginal product, the corresponding marginal-cost curve will
be U-shaped
question
In the long run, if a very small factory were to expand its scale of operations, it's likely that it would initially experience
Economies of scale
question
The efficient scale of production is the quantity of output that minimizes
Average total cost
question
Which of the following statements is true ?
All costs are variable in the long run
1 of 20
question
Accounting profit is equal to total revenue minus
Explicit costs
question
Economic profit is equal to total revenue minus
the sum of implicit and explicit costs
question
Madelyn owns a small pottery factory. She can make 1,000 pieces of pottery per year and sell them for \$100 each. It costs Madelyn \$20,000 for the raw materials to produce the 1,000 pieces of pottery. She has invested \$100,000 in her factory and equipment: \$50,000 from her savings and \$50,000 borrowed at 10 percent (assume that she could have loaned her money out at 10 percent, too). Madelyn can work at a competing pottery factory for \$40,000 per year. The accounting profit at Madelyn's pottery factory is
\$75,000
question
Madelyn owns a small pottery factory. She can make 1,000 pieces of pottery per year and sell them for \$100 each. It costs Madelyn \$20,000 for the raw materials to produce the 1,000 pieces of pottery. She has invested \$100,000 in her factory and equipment: \$50,000 from her savings and \$50,000 borrowed at 10 percent (assume that she could have loaned her money out at 10 percent, too). Madelyn can work at a competing pottery factory for \$40,000 per year. The accounting profit at Madelyn's pottery factory is
\$30,000
question
If there are implicit costs of production,
accounting profit will exceed economic profit
question
Which of the following is a variable cost in the short run?
wages paid to factory labor
question
The 3 amigos company produced and sold 500 dog beds. The average cost of production per dog bed was \$50. Each dog bed can be sold for a price of \$65. The 3 amigos total costs are
\$25,000
question
Cindy's car wash has average variable costs of \$2 and average fixed costs of \$3 when it produces 100 units of output (car washes). The firms total cost is
\$500
question
A firm produces 300 units of output at a total cost of \$1,000. If fixed costs are \$100
Average variable cost is \$3
question
What is the shape of the marginal cost curve for this firm?
Upward-sloping
question
The average fixed cost of producing 4 units is
\$2.50
question
The average total cost of producing 3 units is
\$9.33
question
The marginal cost of changing production from 3 units to 4 units is
\$8
question
The efficient scale of production is
4 units
question
When marginal costs are below average total costs
average total costs are falling
question
If marginal costs equal average total costs
Average total costs are minimized
question
If, as the quantity produced increases, a production function first exhibits increasing marginal product and later diminishing marginal product, the corresponding marginal-cost curve will
be U-shaped
question
In the long run, if a very small factory were to expand its scale of operations, it's likely that it would initially experience
Economies of scale
question
The efficient scale of production is the quantity of output that minimizes
Average total cost
question
Which of the following statements is true ?
All costs are variable in the long run

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