Question 1

Use the following graph to answer the following questions.
 
-If the firm expanded its scale of production and found that its average costs did not change,which of the curves would reflect this situation?

Accepted Answer

A)   LRATC1 and LRATC2
B)   LRATC3
C)   LRATC2
D)   LRATC1
E)   LRATC1 and LRATC3F) C) and D)
G) A) and D)

Question 2

Which is the best example of economies of scale?

Accepted Answer

A)   the local power company
B)   the pizza business
C)   the restaurant industry
D)   a parking garage
E)   a small family farmF) C) and D)
G) A) and E)

Question 3

Describe what a production function is and what would happen if a firm becomes less efficient because of a law that requires a certain number of workers per unit of capital.

Accepted Answer

The production function is the maximum p...

Question 4

If workers are unable to specialize and become more productive as more labor is hired,the amount of total output produced

Accepted Answer

A)   increases at an increasing rate.
B)   increases at a constant rate.
C)   increases at a decreasing rate.
D)   decreases at an increasing rate.
E)   decreases at a constant rate.F) A) and E)
G) B) and E)

Question 5

Luciana is the owner of a nail salon.Last year,her total revenue was $145,000,her rent was $12,000,her labor costs were $65,000,and her overhead expenses were $15,000.From this information,we know that her accounting profit was

Accepted Answer

A)   $145,000.
B)   $53,000.
C)   $65,000.
D)   $15,000.
E)   $27,000.F) A) and E)
G) A) and B)

Question 6

Explain how the long-run average cost curve is constructed graphically.

Accepted Answer

The long-run average cost curv...

Question 7

Refer to the accompanying graph to answer the following questions.
 
-The average total cost of production is minimized at what level of output?

Accepted Answer

A)   Q5
B)   Q1
C)   Q4
D)   Q3
E)   Q2F) C) and D)
G) A) and D)

Question 8

By looking at the full set of short-run cost curves for a firm,we can determine

Accepted Answer

A)   the profit-maximizing level of output.
B)   the optimal number of employees to hire.
C)   what will happen if the firm increases its capital.
D)   the level of output with the cost-minimizing level of output.
E)   what will happen if the firm decreases its capital.F) A) and B)
G) C) and E)

Question 9

If a firm generates $240,000 in revenue,earns $120,000 in economic profit,and its explicit costs are $80,000,how much are its implicit costs?

Accepted Answer

A)   $160,000
B)   $80,000
C)   $40,000
D)   $60,000
E)   $120,000F) C) and D)
G) B) and C)

Question 10

Jeremy is the owner of a makeup parlor that earns zero economic profit.Last year,his total revenue was $145,000,his rent was $12,000,his labor costs were $65,000,and his overhead expenses were $15,000.From this information,we know that his total implicit costs were

Accepted Answer

A)   $145,000.
B)   $53,000.
C)   $92,000.
D)   $65.000.
E)   $15,000.F) A) and E)
G) C) and D)

Question 11

What needs to be done to ensure that a company is profitable?

Accepted Answer

A)   The company needs to maximize revenue.
B)   The company needs to minimize costs.
C)   The company needs to both minimize costs and maximize revenue.
D)   The company needs to both maximize costs and minimize revenue.
E)   The company needs only to provide products that customers want.F) C) and D)
G) B) and E)

Question 12

Implicit costs are

Accepted Answer

A)   the opportunity cost of the means of production.
B)   always paid out of pocket.
C)   never greater than explicit costs.
D)   always greater than explicit costs.
E)   not measured in terms of dollars.F) B) and D)
G) A) and E)

Question 13

How will a firm know when it has reached its minimum efficient scale of production?

Accepted Answer

The minimum efficient scale is the level...

Question 14

Marginal product is the change in

Accepted Answer

A)   total output divided by the change in input.
B)   total output plus the change in input.
C)   total output minus the change in input.
D)   total output times the change in input.
E)   input divided by the change in total output.F) A) and C)
G) All of the above

Question 15

Explicit costs are

Accepted Answer

A)   the opportunity cost of the means of production.
B)   always paid out of pocket.
C)   always greater than implicit costs.
D)   never greater than implicit costs.
E)   what a business sacrifices in order to produce a good.F) A) and D)
G) A) and C)

Exam 8: Business Costs and Production

Luciana is the owner of a nail salon.Last year,her total revenue was $145,000,her rent was $12,000,her labor costs were $65,000,and her overhead expenses were $15,000.From this information,we know that her accounting profit was

Correct Answer
verified

Describe what a production function is and what would happen if a firm becomes less efficient because of a law that requires a certain number of workers per unit of capital.

Correct Answer
verified
The production function is the maximum p...
View Answer

Explicit costs are

Correct Answer
verified

How will a firm know when it has reached its minimum efficient scale of production?

Correct Answer
verified
The minimum efficient scale is the level...
View Answer

By looking at the full set of short-run cost curves for a firm,we can determine

Correct Answer
verified

If a firm generates $240,000 in revenue,earns $120,000 in economic profit,and its explicit costs are $80,000,how much are its implicit costs?

Correct Answer
verified

Marginal product is the change in

Correct Answer
verified

Implicit costs are

Correct Answer
verified

Jeremy is the owner of a makeup parlor that earns zero economic profit.Last year,his total revenue was $145,000,his rent was $12,000,his labor costs were $65,000,and his overhead expenses were $15,000.From this information,we know that his total implicit costs were

Correct Answer
verified

Explain how the long-run average cost curve is constructed graphically.

Correct Answer
verified
The long-run average cost curv...
View Answer

Refer to the accompanying graph to answer the following questions. -The average total cost of production is minimized at what level of output?

Correct Answer
verified

Which is the best example of economies of scale?

Correct Answer
verified

If workers are unable to specialize and become more productive as more labor is hired,the amount of total output produced

Correct Answer
verified

Use the following graph to answer the following questions. -If the firm expanded its scale of production and found that its average costs did not change,which of the curves would reflect this situation?

Correct Answer
verified

What needs to be done to ensure that a company is profitable?

Correct Answer
verified

Exam 8: Business Costs and Production

Luciana is the owner of a nail salon.Last year,her total revenue was $145,000,her rent was $12,000,her labor costs were $65,000,and her overhead expenses were $15,000.From this information,we know that her accounting profit was

Correct AnswerverifiedShow Answer

Describe what a production function is and what would happen if a firm becomes less efficient because of a law that requires a certain number of workers per unit of capital.

Correct AnswerverifiedThe production function is the maximum p...View AnswerShow Answer

Explicit costs are

Correct AnswerverifiedShow Answer

How will a firm know when it has reached its minimum efficient scale of production?

Correct AnswerverifiedThe minimum efficient scale is the level...View AnswerShow Answer

By looking at the full set of short-run cost curves for a firm,we can determine

Correct AnswerverifiedShow Answer

If a firm generates $240,000 in revenue,earns $120,000 in economic profit,and its explicit costs are $80,000,how much are its implicit costs?

Correct AnswerverifiedShow Answer

Marginal product is the change in

Correct AnswerverifiedShow Answer

Implicit costs are

Correct AnswerverifiedShow Answer

Jeremy is the owner of a makeup parlor that earns zero economic profit.Last year,his total revenue was $145,000,his rent was $12,000,his labor costs were $65,000,and his overhead expenses were $15,000.From this information,we know that his total implicit costs were

Correct AnswerverifiedShow Answer

Explain how the long-run average cost curve is constructed graphically.

Correct AnswerverifiedThe long-run average cost curv...View AnswerShow Answer

Refer to the accompanying graph to answer the following questions. -The average total cost of production is minimized at what level of output?

Correct AnswerverifiedShow Answer

Which is the best example of economies of scale?

Correct AnswerverifiedShow Answer

If workers are unable to specialize and become more productive as more labor is hired,the amount of total output produced

Correct AnswerverifiedShow Answer

Use the following graph to answer the following questions. -If the firm expanded its scale of production and found that its average costs did not change,which of the curves would reflect this situation?

Correct AnswerverifiedShow Answer

What needs to be done to ensure that a company is profitable?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
The production function is the maximum p...
View Answer

Correct Answer
verified

Correct Answer
verified
The minimum efficient scale is the level...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The long-run average cost curv...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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