Exam 7: Producers in the Short Run

The table below provides the annual revenues and costs for a family- owned firm producing catered meals. $\begin{array}{|l|l|}\hline \text { Total Revenues }(\$) & 500000 \\\hline & \\\hline \text { Total Costs }(\$) & \\\hline \text { wages and salaries } & 200000 \\\hline \text { risk-free return of } 6 \% \text { on owners' capital of } 250000 & 15000 \\\hline \text { rent } & 105000 \\\hline \text { depreciation of capital equipment } & 25000 \\\hline \text { risk premium of } 8 \% \text { on owners' capital of } 250000 & 20000 \\\hline \text { intermediate inputs } & 150000 \\\hline \text { forgone wages of owners in alternative employment } & 80000 \\\hline \text { interest on bank loan } & 10000 \\\hline\end{array}$ TABLE 7- 1 -Refer to Table 7- 1.To an accountant,this family- owned catering company is earning .To an economist,the same firm is earning _ .

A firm that is maximizing its profits by producing a certain level of output must also be

The opportunity cost of any factor of production is

Suppose a firm is producing 250 units of output.At this level of output,average fixed costs are $20 per unit and average variable costs are $80 per unit.It can be concluded that total cost is

A firm that has two or more owners who share decision- making power as well as the firm's profits is called

The opportunity cost to a firm of using an asset is zero if

The following data show the total output for a firm when specified amounts of labour are combined with a fixed amount of capital.When answering the questions,you are to assume that the wage per unit of labour is $25 and the cost of the capital is $100. Labour per unit of time Total output 0 0 1 25 2 75 3 175 4 250 5 305 TABLE 7- 4 -Refer to Table 7- 4.The total variable cost of producing 305 units of output is

The table below provides the total revenues and costs for a small landscaping company in a recent year. $\begin{array}{|l|l|}\hline \text { Total Revenues }(\$) & 250000 \\\hline & \\\hline \text { Total Costs }(\$) & \\\hline \text { - wages and salaries } & 150000 \\\hline \text { risk- free return of } 2 \% \text { on owner's capital of } \$ 20000 & 400 \\\hline \text { - interest on bank loan } & 1500 \\\hline \text { cost of supplies } & 27000 \\\hline \text { depreciation of capital equipment } & 8000 \\\hline \text { additional wages the owner could have earned in next } & 30000 \\\text { best alternative } & \\\hline \text { risk premium of } 4 \% \text { on owner's capital of } \$ 20000 & 800 \\\hline\end{array}$ TABLE 7- 2 -Refer to Table 7- 2.The economic profits for this firm are

A firm's capacity is defined as the level of output where

In economics,the term "fixed costs" means

The following data show the total output for a firm when specified amounts of labour are combined with a fixed amount of capital.When answering the questions,you are to assume that the wage per unit of labour is $25 and the cost of the capital is $100. Labour per unit of time Total output 0 0 1 25 2 75 3 175 4 250 5 305 TABLE 7- 4 -Refer to Table 7- 4.The marginal product of labour is at its maximum when the firm changes the amount of labour hired from

When a corporation issues a bond

Churches,the YMCA,the Salvation Army,and the Nature Conservancy are examples of

The table below provides the annual revenues and costs for a family- owned firm producing catered meals. $\begin{array}{|l|l|}\hline \text { Total Revenues }(\$) & 500000 \\\hline & \\\hline \text { Total Costs }(\$) & \\\hline \text { - wages and salaries } & 200000 \\\hline \text { - risk-free return of } 6 \% \text { on owners' capital of } 250000 & 15000 \\\hline \text { rent } & 105000 \\\hline \text { depreciation of capital equipment } & 25000 \\\hline \text { risk premium of } 8 \% \text { on owners' capital of } 250000 & 20000 \\\hline \text { - intermediate inputs } & 150000 \\\hline \text { forgone wages of owners in alternative employment } & 80000 \\\hline \text { - interest on bank loan } & 10000 \\\hline\end{array}$ TABLE 7- 1 -Refer to Table 7- 1.The accounting profits for this family- owned firm are

Suppose a firm is producing 100 units of output,incurring a total cost of $10 000 and total variable cost of $6000.It can be concluded that average fixed cost is

Consider the production costs for a firm,one of which is the cost of depreciation.Depreciation costs are

An example of debt financing for any form of business organization is

Diminishing marginal product of labour is said to exist when there is

Consider a basket- producing firm with fixed capital.If the firm can produce 24 baskets per day with 3 workers and then increases production to 36 baskets per day with 4 workers,then which of the following statements is definitely true?

The table below provides the annual revenues and costs for a family- owned firm producing catered meals. Total Revenues (\ ) 500000 Total Costs (\ ) wages and salaries risk- free return of 6\% on ow ners' capital of 250000 15000 rent 200000 - depreciation of capital equipment 105000 risk premium of 8\% on owners' capital of 250000 25000 intermediate inputs 20000 - forgone wages of owners in alternative employment 80000 interest on bank loan 10000 TABLE 7- 1 -Refer to Table 7- 1.The implicit costs for this family- owned firm are