Microeconomics Ch. 13
a. wages John could earn washing windows
b. dividends John’s money was earning in the stock market before John sold his stock and bought a shoe-shine booth
c. the cost of shoe polish
d. both b and c are correct
Suppose Joe purchases the factory using $200,000 of his own money and $200,000 borrowed from a bank at an interest rate of 6 percent. What is Joe’s annual opportunity cost of purchasing the factory?
a. The cost of something is what you give up to get it.
b. A country’s standard of living depends on its ability to produce goods and services.
c. Prices rise when the government prints too much money.
d. Governments can sometimes improve market outcomes.
a. maximize its total revenue.
b. maximize its profit.
c. minimize its explicit costs.
d. minimize its total cost.
a. accounting profit = economic profit + implicit costs
b. accounting profit = total revenue – implicit costs
c. economic profit = accounting profit + explicit costs
d. economic profit = total revenue – implicit costs
Zach’s economic profit for the year was
a. accounting profit will be greater than economic profit.
b. accounting profit will be the same as economic profit.
c. accounting profit will be less than economic profit.
d. the relationship between accounting profit and economic profit cannot be determined since the amount of explicit opportunity costs is not given.
a. The firm can vary both the size of its factory and the number of workers it employs.
b. The firm can vary the size of its factory, but not the number of workers it employs.
c. The firm can vary the number of workers it employs, but not the size of its factory.
d. The firm can vary neither the size of its factory nor the number of workers it employs.
a. implicit costs and explicit costs.
b. quantity of inputs and total cost.
c. quantity of inputs and quantity of output.
d. quantity of output and total cost.
a. quantity of labor..
b. quantity of output.
c. total cost.
d. marginal product of labor.
a. 8 units of output.
b. 10 units of output.
c. 122 units of output.
d. 132 units of output.
a. quantity of an input used and the total cost of production.
b. quantity of output produced and the total cost of production.
c. total cost of production and profit.
d. total cost of production and total revenue.
a. total cost
b. fixed cost
c. opportunity cost
d. variable cost
a. output is not variable.
b. the number of workers used to produce the firm”s product is fixed.
c. the size of the factory is fixed.
d. there are no fixed costs.
a. average variable cost.
b. marginal cost.
c. average total cost.
d. None of the above is correct.
a. cost of an extra worker is unchanged.
b. cost of an extra worker is less than the previous worker’s marginal cost.
c. product of an extra worker is less than the previous worker’s marginal product.
d. product of an extra worker is greater than the previous worker’s marginal product.
a. total cost is increasing.
b. marginal cost is increasing.
c. marginal cost is less than average total cost.
d. marginal cost is greater than average total cost.
(i) his cumulative GPA.
(ii) he ever performed before.
(iii) he did last semester.
a. (i) and (ii)
b. (i) and (iii)
c. (ii) and (iii)
d. All of the above are correct.
a. average variable cost is falling.
b. average fixed cost is rising.
c. marginal cost is at its minimum.
d. average total cost is at its minimum.
b. remains unaffected.
d. All of the above are possible depending on the shape of the marginal cost curve.
a. fixed costs and variable costs.
b. fixed costs and marginal costs.
c. variable costs and marginal costs.
d. average costs and marginal costs.
a. ATC= (change in total cost)/ (change in quantity of output).
b. ATC= (change in total cost)/(change in quantity of input).
c. ATC= total cost/ quantity of output.
d. ATC= total cost/ quantity of input.
a. do not require an outlay of money by the firm.
b. do not enter into the economist’s measurement of a firm’s profit.
c. are also known as variable costs.
d. are not part of an economist’s measurement of opportunity cost.
In producing the 7,000 staplers, the firm’s average total cost was
a. When marginal cost is less than average total cost, average total cost is rising.
b. The total cost curve is U-shaped.
c. As the quantity of output increases, marginal cost eventually rises.
d. All of the above are correct.
a. The marginal cost of the fifth unit of output equals the total cost of five units minus the total cost of four units.
b. The total variable cost of seven units equals the average variable cost of seven units times seven.
c. If marginal cost is rising, then average variable cost must be rising.
d. The marginal cost of the fifth unit of output equals the total variable cost of five units minus the total variable cost of four units.
a. profits are increasing.
b. economies of scale are becoming greater.
c. average total cost remains constant.
d. average total cost is increasing.
a. average costs are rising at Q= 500.
b. average costs are falling at Q=500.
c. total costs are falling at Q= 500.
d. average variable costs must be falling.
a. inputs that were fixed in the short run remain fixed.
b. inputs that were fixed in the short run become variable.
c. inputs that were variable in the short run become fixed.
d. variable inputs are rarely used.
a. is different for different types of firms.
b.can never exceed 3 years.
c. can never exceed 1 year.
d. is always less than 6 months.
a. average fixed costs are falling.
b. average fixed costs are constant.
c. long-run average total costs rise as output increases.
d. long-run average total cost fall as output increases.
a. how many workers to hire.
b. the size of its factories.
c. which short-run average-total-cost curve to use.
d. All of the above are correct.
a. economies of scale.
b. diseconomies of scale.
c. constant returns to scale.
d. efficient scale.
a. consumers are boycotting local retailers whose prices are relatively higher.
b. there are diseconomies of scale in retail sales.
c. there are economies of scale in retail sales.
d. there are diminishing returns to producing and selling retail goods.
a. slope downward.
b. be horizontal.
c. slope upward.
d. slope downward for low output levels and upward for high output levels.
a. zero in both the short run and the long run.
b. its fixed cost in the short run and zero in the long run.
c. its fixed cost in both the short run and the long run.
d. its variable cost in both the short run and the long run.
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