Exam 10: Organizing Production

Gerald is a freelance writer who could work for a newspaper at $25,000 a year but instead runs his own business making revenue of $40,000 a year.His only business expenses are $1,000 for writing materials and $12,000 for rent.What is Gerald's economic profit from working as a freelance writer?

A firm with a single owner who has unlimited liability is

The four-firm concentration ratio in an industry is 75 percent. Total sales in the industry are $800 million and total economic profit in the industry is $500 million.Normal profit for each firm is zero. From this information we know that

The principal-agent problem exists when

A group of business people are having coffee.Which of the following quotations describes transactions costs?

The profits of a sole proprietorship are

A sole proprietorship

If a market is shared equally by 100 firms, the Herfindahl-Hirschman Index is

Flora's Flowers bought a new van last year for $10,000.It can now sell the car for $8,500.To buy this year's model it would have to pay $11,000.Flora's also had to take out a $9,000 loan to buy the van which had to be paid back in yearly installments of $3,300 per year over three years.What is the implicit rental rate of the first year's use of the van?

Team production is a production process in which

If a market is shared equally by four firms, the Herfindahl-Hirschman Index is

Economic profit equals total revenue minus

Which one of the following statements is true?

A firm's total opportunity cost of production is the sum of the cost of using resources

The implicit rental rate

A profit-maximizing firm is constrained by all of the following except

A firm uses capital and labour in production.To determine if the firm is technologically efficient, it

In a perfectly competitive market, the four-firm concentration ratio is

Use the information below to answer the following questions. Fact 10.4.1 GameStop Racks Up the Points No retailer has more cachet among gamers than GameStop. For now, only Wal-Mart has a larger market share-21.3% last year. GameStop's share was 21.1% last year, and may well overtake Wal-Mart this year. But if new women gamers prefer shopping at Target to GameStop, Wal-Mart and Target might erode GameStop's market share. Source: Fortune, June 9, 2008 -Refer to Fact 10.4.1.According to the news clip, the U.S.video game market is

A firm's opportunity cost includes