micro ch 11

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

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

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 enters into trade with:

answer

- individuals
- businesses
- government

question

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

answer

$50

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

Implicit costs

answer

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

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

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

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

answer

economic profit

question

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

answer

$30

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

$2000

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

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

answer

long run

question

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

answer

long run

question

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

answer

true

question

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

answer

the level of output given various combinations of inputs

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

question

Marginal product of workers is the

answer

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

question

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

answer

short run

question

Average product is the

answer

output per worker

question

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

answer

- some inputs are fixed in the long run
- all inputs are variable in the long run

question

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

answer

production function

question

A production table is a table showing

answer

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

question

The standard production function

answer

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

question

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

answer

false

question

A production function is the relationship between _____.

answer

inputs and outputs

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

The standard production function exhibits

answer

first increasing, then decreasing marginal productivity

question

Fixed costs do not exist in which time frame?

answer

the long run

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

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

answer

false

question

Total cost is equal to ____.

answer

fixed cost plus variable cost

question

Average fixed cost is fixed cost

answer

divided by quantity produced

question

Average total cost is the total cost

answer

divided by quantity produced

question

Average variable cost is the

answer

variable cost divided by the quantity produced

question

Which of the following is always upward sloping?

answer

total cost curve

question

As output decreases, average fixed costs ____________.

answer

increase

question

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

answer

falling

question

As output increases, average fixed cost

answer

decreases

question

When marginal cost exceeds average variable cost, average variable cost is rising because

answer

when marginal cost is higher than the average variable cost it will pull the average up

1 of 43

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

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

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 enters into trade with:

answer

- individuals
- businesses
- government

question

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

answer

$50

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

Implicit costs

answer

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

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

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

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

answer

economic profit

question

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

answer

$30

question

answer

$2000

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

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

answer

long run

question

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

answer

long run

question

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

answer

true

question

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

answer

the level of output given various combinations of inputs

question

answer

$200

question

Marginal product of workers is the

answer

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

question

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

answer

short run

question

Average product is the

answer

output per worker

question

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

answer

- some inputs are fixed in the long run
- all inputs are variable in the long run

question

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

answer

production function

question

A production table is a table showing

answer

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

question

The standard production function

answer

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

question

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

answer

false

question

A production function is the relationship between _____.

answer

inputs and outputs

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

The standard production function exhibits

answer

first increasing, then decreasing marginal productivity

question

Fixed costs do not exist in which time frame?

answer

the long run

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

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

answer

false

question

Total cost is equal to ____.

answer

fixed cost plus variable cost

question

Average fixed cost is fixed cost

answer

divided by quantity produced

question

Average total cost is the total cost

answer

divided by quantity produced

question

Average variable cost is the

answer

variable cost divided by the quantity produced

question

Which of the following is always upward sloping?

answer

total cost curve

question

As output decreases, average fixed costs ____________.

answer

increase

question

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

answer

falling

question

As output increases, average fixed cost

answer

decreases

question

When marginal cost exceeds average variable cost, average variable cost is rising because

answer

when marginal cost is higher than the average variable cost it will pull the average up

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micro ch 11

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