Question 1

Refer to the table below.
 
If the firm sells 5 units at a price of $30 each, then the marginal unit produced

Accepted Answer

A)  costs more than the average cost. 
B)  is subtracting from profits. 
C)  costs the same as the average cost. 
D)  is adding to profits. 
A)  costs more than the average cost. 
B)  is subtracting from profits. 
C)  costs the same as the average cost. 
D)  is adding to profits. B

Question 2

Refer to the table below.
 
If the firm produces 5 units that it sells for $39.00 each, what will its profits or losses equal?

Accepted Answer

A)  losses equal $40 
B)  profits equal $70 
C)  profits equal $40 
D)  losses equal $70 
A)  losses equal $40 
B)  profits equal $70 
C)  profits equal $40 
D)  losses equal $70 C

Question 3

___________ include all spending on labor, machinery, tools, and supplies purchased from other firms.

Accepted Answer

A)  Total profits 
B)  Total revenues 
C)  Total costs 
D)  Total profit margins 
A)  Total profits 
B)  Total revenues 
C)  Total costs 
D)  Total profit margins C

Question 4

The term "constant returns to scale" describes a situation where

Accepted Answer

A)  expanding all inputs does not change the average cost of production. 
B)  a larger-scale firm can produce at a lower cost than a smaller-scale firm. 
C)  expanding all inputs changes the average cost of production. 
D)  the quantity of output rises and the average cost of production falls. 
A)  expanding all inputs does not change the average cost of production. 
B)  a larger-scale firm can produce at a lower cost than a smaller-scale firm. 
C)  expanding all inputs changes the average cost of production. 
D)  the quantity of output rises and the average cost of production falls.

Question 5

_____________ is calculated by taking the quantity of everything that is sold and multiplying it by the sale price.

Accepted Answer

A)  Total revenue 
B)  Total profits 
C)  Average profit margin 
D)  Total cost 
A)  Total revenue 
B)  Total profits 
C)  Average profit margin 
D)  Total cost

Question 6

Briefly explain what the term "agglomeration economies" refers to and briefly describe what the fundamental reason for the development of this particular type of economy relates to. Provide two examples of factors associated with agglomeration economies and identify what these factors help to explain. Identify two factors that would lead to diseconomies and briefly explain how the future of many of the world's cities will be likely be determined.

Accepted Answer

Agglomeration economies refer to the ec

Question 7

-The graph above illustrates the electricity market. Consider market competition between firms where price is based on AR and select the most appropriate answer.

Accepted Answer

A)  this market is perfectly competitive with excess profits possible in the short-run 
B)  this market is imperfectly competitive with excess profits possible in the short-run 
C)  this market is imperfectly competitive with excess profits possible in the long-run 
D)  this market is perfectly competitive with negative profits possible in the long-run 
A)  this market is perfectly competitive with excess profits possible in the short-run 
B)  this market is imperfectly competitive with excess profits possible in the short-run 
C)  this market is imperfectly competitive with excess profits possible in the long-run 
D)  this market is perfectly competitive with negative profits possible in the long-run

Question 8

A situation where the level of output, scale and average costs are all rising is called

Accepted Answer

A)  decreasing returns to scale 
B)  diseconomies of scale 
C)  diminishing returns to scale 
D)  both a and b are correct 
A)  decreasing returns to scale 
B)  diseconomies of scale 
C)  diminishing returns to scale 
D)  both a and b are correct

Question 9

Contrast the role of fixed costs and variable costs in economic decisions about future production and pricing.

Accepted Answer

Fixed costs are sunk costs because they

Question 10

In order to calculate marginal cost, the change in ______________ is divided by the amount of change in quantity.

Accepted Answer

A)  either total cost or average cost 
B)  increasing marginal returns 
C)  either total cost or variable cost 
D)  decreasing marginal returns 
A)  either total cost or average cost 
B)  increasing marginal returns 
C)  either total cost or variable cost 
D)  decreasing marginal returns

Question 11

If a paper mill shuts down its operations for three months so that it produces nothing, its __________________ will be reduced to zero?

Accepted Answer

A)  variable costs 
B)  fixed costs 
C)  opportunity costs 
D)  total cost 
A)  variable costs 
B)  fixed costs 
C)  opportunity costs 
D)  total cost

Question 12

______________ include all of the costs of production that increase with the quantity produced.

Accepted Answer

A)  Fixed costs 
B)  Variable costs 
C)  Average costs 
D)  Average variable costs 
A)  Fixed costs 
B)  Variable costs 
C)  Average costs 
D)  Average variable costs

Question 13

Approximately what percentage of the US labor force is employed by firms that have fewer than 100 employees?

Accepted Answer

A)  63% 
B)  50% 
C)  45% 
D)  35% 
A)  63% 
B)  50% 
C)  45% 
D)  35%

Question 14

Fixed costs are important because, at least in the ___________, the firm _______________.

Accepted Answer

A)  long run; cannot alter them 
B)  short run; cannot alter them 
C)  long run; can alter them 
D)  short run; can alter them 
A)  long run; cannot alter them 
B)  short run; cannot alter them 
C)  long run; can alter them 
D)  short run; can alter them

Question 15

I'MaGadgetCo. produces and sells widgets. Last year, it produced 9,000 widgets and sold each one for $8. To produce the 9,000 widgets, the company incurred variable costs of $27,000 and a total cost of $36,000. I'MaGadgetCo's average fixed cost to produce 9,000 widgets was

Accepted Answer

A)  $1.00 
B)  $3.00 
C)  $4.00 
D)  $7.00 
A)  $1.00 
B)  $3.00 
C)  $4.00 
D)  $7.00

Question 16

Refer to the table below.
 
If this information were used to create a total cost graph, the curve should

Accepted Answer

A)  begin at 40 on the vertical axis and slope upward. 
B)  become steeper as quantity increases. 
C)  become steeper due to diminishing returns. 
D)  reflect all of the above. 
A)  begin at 40 on the vertical axis and slope upward. 
B)  become steeper as quantity increases. 
C)  become steeper due to diminishing returns. 
D)  reflect all of the above.

Question 17

Why would labor be treated as a variable cost?

Accepted Answer

A)  they are costs incurred in the act of producing that will decrease with quantity produced 
B)  they are made before production starts and vary according to the specific line of business 
C)  labor costs are an input cost that firms are unable to change in the short run 
D)  producing larger quantities of a good or service generally requires more workers 
A)  they are costs incurred in the act of producing that will decrease with quantity produced 
B)  they are made before production starts and vary according to the specific line of business 
C)  labor costs are an input cost that firms are unable to change in the short run 
D)  producing larger quantities of a good or service generally requires more workers

Question 18

In order to determine ____________, the firm's total costs must be divided by the quantity of its output.

Accepted Answer

A)  diminishing marginal returns 
B)  fixed costs 
C)  variable cost 
D)  average cost 
A)  diminishing marginal returns 
B)  fixed costs 
C)  variable cost 
D)  average cost

Question 19

Briefly explain how the total revenue for a profit-seeking firm is determined.

Accepted Answer

The total revenue for a profit-seeking f

Question 20

____________ tells a firm whether it can earn profits given the price in the market.

Accepted Answer

A)  Marginal cost 
B)  Total cost 
C)  Average cost 
D)  Average marginal cost 
A)  Marginal cost 
B)  Total cost 
C)  Average cost 
D)  Average marginal cost

Refer to the table below. If the firm sells 5 units at a price of $30 each, then the marginal unit produced

Refer to the table below. If the firm produces 5 units that it sells for $39.00 each, what will its profits or losses equal?

___________ include all spending on labor, machinery, tools, and supplies purchased from other firms.

The term "constant returns to scale" describes a situation where

_____________ is calculated by taking the quantity of everything that is sold and multiplying it by the sale price.

-The graph above illustrates the electricity market. Consider market competition between firms where price is based on AR and select the most appropriate answer.

A situation where the level of output, scale and average costs are all rising is called

Contrast the role of fixed costs and variable costs in economic decisions about future production and pricing.

In order to calculate marginal cost, the change in ______________ is divided by the amount of change in quantity.

If a paper mill shuts down its operations for three months so that it produces nothing, its __________________ will be reduced to zero?

______________ include all of the costs of production that increase with the quantity produced.

Approximately what percentage of the US labor force is employed by firms that have fewer than 100 employees?

Fixed costs are important because, at least in the _, the firm _____.

I'MaGadgetCo. produces and sells widgets. Last year, it produced 9,000 widgets and sold each one for $8. To produce the 9,000 widgets, the company incurred variable costs of $27,000 and a total cost of $36,000. I'MaGadgetCo's average fixed cost to produce 9,000 widgets was

Refer to the table below. If this information were used to create a total cost graph, the curve should

Why would labor be treated as a variable cost?

In order to determine ____________, the firm's total costs must be divided by the quantity of its output.

Briefly explain how the total revenue for a profit-seeking firm is determined.

____________ tells a firm whether it can earn profits given the price in the market.

Welcome to Economics

Choice in a World of Scarcity

Demand and Supply

Labor and Financial Markets

Elasticity

Consumer Choices

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Monopoly and Antitrust Policy

Environmental Protection and Negative Externalities

Positive Externalities and Public Goods

Poverty and Economic Inequality

Issues in Labor Markets: Unions, Discrimination, Immigration

Information, Risk, and Insurance

Financial Markets

Public Economy

International Trade

Globalization and Protectionism

Filters

Exam 7: Cost and Industry Structure

Refer to the table below. If the firm sells 5 units at a price of $30 each, then the marginal unit produced

Refer to the table below. If the firm produces 5 units that it sells for $39.00 each, what will its profits or losses equal?

___________ include all spending on labor, machinery, tools, and supplies purchased from other firms.

The term "constant returns to scale" describes a situation where

_____________ is calculated by taking the quantity of everything that is sold and multiplying it by the sale price.

-The graph above illustrates the electricity market. Consider market competition between firms where price is based on AR and select the most appropriate answer.

A situation where the level of output, scale and average costs are all rising is called

Contrast the role of fixed costs and variable costs in economic decisions about future production and pricing.

In order to calculate marginal cost, the change in ______________ is divided by the amount of change in quantity.

If a paper mill shuts down its operations for three months so that it produces nothing, its __________________ will be reduced to zero?

______________ include all of the costs of production that increase with the quantity produced.

Approximately what percentage of the US labor force is employed by firms that have fewer than 100 employees?

Fixed costs are important because, at least in the ___________, the firm _______________.

I'MaGadgetCo. produces and sells widgets. Last year, it produced 9,000 widgets and sold each one for $8. To produce the 9,000 widgets, the company incurred variable costs of $27,000 and a total cost of $36,000. I'MaGadgetCo's average fixed cost to produce 9,000 widgets was

Refer to the table below. If this information were used to create a total cost graph, the curve should

Why would labor be treated as a variable cost?

In order to determine ____________, the firm's total costs must be divided by the quantity of its output.

Briefly explain how the total revenue for a profit-seeking firm is determined.

____________ tells a firm whether it can earn profits given the price in the market.

Welcome to Economics

Choice in a World of Scarcity

Demand and Supply

Labor and Financial Markets

Elasticity

Consumer Choices

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Monopoly and Antitrust Policy

Environmental Protection and Negative Externalities

Positive Externalities and Public Goods

Poverty and Economic Inequality

Issues in Labor Markets: Unions, Discrimination, Immigration

Information, Risk, and Insurance

Financial Markets

Public Economy

International Trade

Globalization and Protectionism

Filters

Fixed costs are important because, at least in the _, the firm _____.