ECO Quiz 11 - Custom Scholars
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# ECO Quiz 11

question
Sebastian decides to open a tree farm. When deciding to open his own business, he turned down two separate job offers of \$25,000 and \$30,000 and withdrew \$20,000 from his savings. Sebastian's savings account paid 3 percent interest. He also borrowed \$20,000 from his brother, whom he pays 2 percent interest per year. He spent \$15,000 to purchase supplies and earned \$50,000 in revenue during his first year. Which of the following statements is correct?
​Sebastian's total explicit costs are \$15,400.
question
The long-run average total cost curve is always
flatter than the short-run average total cost curve, but not necessarily horizontal.
question
Refer to Table 13-1. What is total output when 3 workers are hired?
135
question
Profit is defined as
total revenue minus total cost
question
Sebastian decides to open a tree farm. When deciding to open his own business, he turned down two separate job offers of \$25,000 and \$30,000 and withdrew \$20,000 from his savings. Sebastian's savings account paid 3 percent interest. He also borrowed \$20,000 from his brother, whom he pays 2 percent interest per year. He spent \$15,000 to purchase supplies and earned \$50,000 in revenue during his first year. Which of the following statements is correct?
​Sebastian's economic profit is \$4,000, and his accounting profit is \$34,600.
question
Refer to Table 13-2. What is the marginal product of the first worker?
300 units
question
Explicit costs
require an outlay of money by the firm.
question
The nature of a firm's cost (fixed or variable) depends on the
time horizon under consideration.
question
Economists normally assume that the goal of a firm is to
(i)
sell as much of its product as possible.
(ii)
set the price of the product as high as possible.
(iii)
maximize profit.
(iii) only
question
Refer to Table 13-2. What is the marginal product of the third worker?
100 units
question
For a firm, the relationship between the quantity of inputs and quantity of output is called the
production function.
question
An entrepreneur's motivation to start a business arises from
All of the above could be correct.
question
Katherine gives piano lessons for \$15 per hour. She also grows flowers, which she arranges and sells at the local farmer's market. One day she spends 5 hours planting \$50 worth of seeds in her garden. Once the seeds have grown into flowers, she can sell them for \$150 at the farmer's market. Katherine's accounting profits are
\$100, and her economic profits are \$25.
question
Industrial organization is the study of
how firms' decisions regarding prices and quantities depend on the market conditions they face.
question
Patrice owns a travel agency. Her accountant most likely includes which of the following costs on her financial statements?
the cost of utilities for operating the storefront
question
Total revenue equals
price x quantity.
question
The figure below depicts average total cost functions for a firm that produces automobiles.
Refer to Figure 13-9. At levels of output between M and N, the firm experiences
constant returns to scale.
question
A firm's opportunity costs of production are equal to its
explicit costs + implicit costs.
question
The length of the short run
is different for different types of firms.
question
Refer to Figure 13-3. The changing slope of the total cost curve reflects
decreasing marginal product.
question
Refer to Figure 13-3. Assuming that the firm depicted produces cookies, which of the statements below is most consistent with the shape of the total cost curve?
question
Refer to Table 13-2. What is the marginal product of the fourth worker?
50 units
question
Refer to Table 13-1. What is total output when 2 workers are hired?
75
question
Total revenue equals
price x quantity.
question
The figure below depicts average total cost functions for a firm that produces automobiles.
Refer to Figure 13-9. Which curve represents the long-run average total cost?
ATCD
question
Economies of scale occur when
long-run average total costs fall as output increases.
question
A firm that wants to achieve economies of scale could do so by
assigning limited tasks to its employees, so they can master those tasks.
question
Refer to Figure 13-3. Which of the following statements best captures the nature of the underlying production function (not pictured)?
Output increases at a decreasing rate with additional units of input.
question
Economic profit
will never exceed accounting profit.
question
Which of the following expressions is correct?
Accounting Profit = Total Revenue - Explicit Costs
1 of 30
question
Sebastian decides to open a tree farm. When deciding to open his own business, he turned down two separate job offers of \$25,000 and \$30,000 and withdrew \$20,000 from his savings. Sebastian's savings account paid 3 percent interest. He also borrowed \$20,000 from his brother, whom he pays 2 percent interest per year. He spent \$15,000 to purchase supplies and earned \$50,000 in revenue during his first year. Which of the following statements is correct?
​Sebastian's total explicit costs are \$15,400.
question
The long-run average total cost curve is always
flatter than the short-run average total cost curve, but not necessarily horizontal.
question
Refer to Table 13-1. What is total output when 3 workers are hired?
135
question
Profit is defined as
total revenue minus total cost
question
Sebastian decides to open a tree farm. When deciding to open his own business, he turned down two separate job offers of \$25,000 and \$30,000 and withdrew \$20,000 from his savings. Sebastian's savings account paid 3 percent interest. He also borrowed \$20,000 from his brother, whom he pays 2 percent interest per year. He spent \$15,000 to purchase supplies and earned \$50,000 in revenue during his first year. Which of the following statements is correct?
​Sebastian's economic profit is \$4,000, and his accounting profit is \$34,600.
question
Refer to Table 13-2. What is the marginal product of the first worker?
300 units
question
Explicit costs
require an outlay of money by the firm.
question
The nature of a firm's cost (fixed or variable) depends on the
time horizon under consideration.
question
Economists normally assume that the goal of a firm is to
(i)
sell as much of its product as possible.
(ii)
set the price of the product as high as possible.
(iii)
maximize profit.
(iii) only
question
Refer to Table 13-2. What is the marginal product of the third worker?
100 units
question
For a firm, the relationship between the quantity of inputs and quantity of output is called the
production function.
question
An entrepreneur's motivation to start a business arises from
All of the above could be correct.
question
Katherine gives piano lessons for \$15 per hour. She also grows flowers, which she arranges and sells at the local farmer's market. One day she spends 5 hours planting \$50 worth of seeds in her garden. Once the seeds have grown into flowers, she can sell them for \$150 at the farmer's market. Katherine's accounting profits are
\$100, and her economic profits are \$25.
question
Industrial organization is the study of
how firms' decisions regarding prices and quantities depend on the market conditions they face.
question
Patrice owns a travel agency. Her accountant most likely includes which of the following costs on her financial statements?
the cost of utilities for operating the storefront
question
Total revenue equals
price x quantity.
question
The figure below depicts average total cost functions for a firm that produces automobiles.
Refer to Figure 13-9. At levels of output between M and N, the firm experiences
constant returns to scale.
question
A firm's opportunity costs of production are equal to its
explicit costs + implicit costs.
question
The length of the short run
is different for different types of firms.
question
Refer to Figure 13-3. The changing slope of the total cost curve reflects
decreasing marginal product.
question
Refer to Figure 13-3. Assuming that the firm depicted produces cookies, which of the statements below is most consistent with the shape of the total cost curve?
question
Refer to Table 13-2. What is the marginal product of the fourth worker?
50 units
question
Refer to Table 13-1. What is total output when 2 workers are hired?
75
question
Total revenue equals
price x quantity.
question
The figure below depicts average total cost functions for a firm that produces automobiles.
Refer to Figure 13-9. Which curve represents the long-run average total cost?
ATCD
question
Economies of scale occur when
long-run average total costs fall as output increases.
question
A firm that wants to achieve economies of scale could do so by
assigning limited tasks to its employees, so they can master those tasks.
question
Refer to Figure 13-3. Which of the following statements best captures the nature of the underlying production function (not pictured)?
Output increases at a decreasing rate with additional units of input.
question
Economic profit
will never exceed accounting profit.
question
Which of the following expressions is correct?
Accounting Profit = Total Revenue - Explicit Costs

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