Question 1

Use the table below to answer the following questions.
Table 10.4.1
  
-Refer to Table 10.4.1.The four-firm concentration ratio for the pizza sellers is

Accepted Answer

A) 40 percent. 
B) 100 percent. 
C) 80 percent. 
D) 33 percent. 
E) 12.5 percent. 
A) 40 percent. 
B) 100 percent. 
C) 80 percent. 
D) 33 percent. 
E) 12.5 percent.

Question 2

A firm with a lower unit cost from producing a wider range of goods and services has economies of

Accepted Answer

A) transactions costs. 
B) scale. 
C) scope. 
D) team production. 
E) market coordination. 
A) transactions costs. 
B) scale. 
C) scope. 
D) team production. 
E) market coordination.

Question 3

Some firms use large amounts of capital and small amounts of labour, while others use small amounts of capital and large amounts of labour to

Accepted Answer

A) use surpluses of labour and capital and eliminate unemployment of these resources. 
B) use the best available technology. 
C) use the resources that are most readily available. 
D) maximize profit. 
E) maximize production. 
A) use surpluses of labour and capital and eliminate unemployment of these resources. 
B) use the best available technology. 
C) use the resources that are most readily available. 
D) maximize profit. 
E) maximize production.

Question 4

A firm that uses the latest technology ________ technologically efficient because ________.

Accepted Answer

A) is not necessarily; the firm might not use the least amount of inputs to produce a given output 
B) is not necessarily; new technology is more expensive than old technology 
C) is; efficiency is about costs rather than when the technology was developed 
D) is; new technology isn't developed unless it is efficient 
E) is; most consumers want access to the latest technology 
A) is not necessarily; the firm might not use the least amount of inputs to produce a given output 
B) is not necessarily; new technology is more expensive than old technology 
C) is; efficiency is about costs rather than when the technology was developed 
D) is; new technology isn't developed unless it is efficient 
E) is; most consumers want access to the latest technology

Question 5

A group of business people are having coffee.Which of the following quotations describes economies of scale?

Accepted Answer

A) "The new production process we've installed uses less capital and labour than the old one." 
B) "The new assembly line has higher capital costs, but the fall in workers' hours has lowered overall costs." 
C) "The costs of per-unit production have fallen dramatically as we have increased the length of the production runs." 
D) "Despite the higher costs of negotiating the contracts, hiring the cleaning firm is much cheaper than using our own staff." 
E) "The computer servicing people we have hired work very well as an integrated problem-solving group." 
A) "The new production process we've installed uses less capital and labour than the old one." 
B) "The new assembly line has higher capital costs, but the fall in workers' hours has lowered overall costs." 
C) "The costs of per-unit production have fallen dramatically as we have increased the length of the production runs." 
D) "Despite the higher costs of negotiating the contracts, hiring the cleaning firm is much cheaper than using our own staff." 
E) "The computer servicing people we have hired work very well as an integrated problem-solving group."

Question 6

In a perfectly competitive market, the Herfindahl-Hirschman Index (HHI)

Accepted Answer

A) is small. 
B) is usually greater than 5,000. 
C) is greater than 1,000 but less than 2,000. 
D) lies between 1,200 and 1,500. 
E) is greater than 10,000. 
A) is small. 
B) is usually greater than 5,000. 
C) is greater than 1,000 but less than 2,000. 
D) lies between 1,200 and 1,500. 
E) is greater than 10,000.

Question 7

When Jitters Coffee Company, Inc., can lower the cost of packaging a kilogram of coffee by doubling the quantity packaged each day, it is achieving

Accepted Answer

A) economies of scope. 
B) lower transactions costs 
C) economies of scale. 
D) efficient team production. 
E) all of the above 
A) economies of scope. 
B) lower transactions costs 
C) economies of scale. 
D) efficient team production. 
E) all of the above

Question 8

Mr.Brown opens his restaurant as a sole proprietorship.After a year of disastrous reviews, he has gone deeply into debt. His liability is

Accepted Answer

A) zero; he has already lost all his money. 
B) the amount of his original investment. 
C) limited only by his entire wealth. 
D) limited to assets owned by the restaurant. 
E) depends upon how much money he has in his savings account. 
A) zero; he has already lost all his money. 
B) the amount of his original investment. 
C) limited only by his entire wealth. 
D) limited to assets owned by the restaurant. 
E) depends upon how much money he has in his savings account.

Question 9

What is the maximum value of the Herfindahl-Hirschman Index?

Accepted Answer

A) 1 
B) 1,000,000 
C) 100,000 
D) 10,000 
E) 1,000 
A) 1 
B) 1,000,000 
C) 100,000 
D) 10,000 
E) 1,000

Question 10

Use the information below to answer the following questions.
Fact 10.1.1 The Colvin Interview: Chrysler
The key driver of profitability will be that the focus of the company isn't on profitability. Our focus is on the customer. If we can find a way to give customers what they want better than anybody else, then what can stop us?
Source: Fortune, April 14, 2008
-Refer to Fact 10.1.1.In spite of what Chrysler's vice chairman and co-president claims, Chrysler's focus actually is on profitability because

Accepted Answer

A) all car firms are greedy. 
B) without profitability the UAW will be unable to negotiate high enough wage rates for its members. 
C) without a focus on profitability, Chrysler will either be eliminated from the market or taken over by another firm. 
D) without a focus on profitability, Chrysler will face an unreasonably high implicit rental rate. 
E) without profitability, Chrysler will not have enough money for research and development. 
A) all car firms are greedy. 
B) without profitability the UAW will be unable to negotiate high enough wage rates for its members. 
C) without a focus on profitability, Chrysler will either be eliminated from the market or taken over by another firm. 
D) without a focus on profitability, Chrysler will face an unreasonably high implicit rental rate. 
E) without profitability, Chrysler will not have enough money for research and development.

Question 11

Use the information below to answer the following question.
Fact 10.2.2 A Medical Sensation
Hospitals are buying da Vinci surgical robots. Surgeons, sitting comfortably at a da Vinci console, can use various robotic attachments to perform even the most complex procedures.
Source: Fortune, April 28, 2008
-Refer to Fact 10.2.2.Assume that performing a surgery with a surgical robot requires fewer surgeons and nurses.Using the surgical robot ________ technologically efficient.We would need additional information about ________ to determine if switching to surgical robots is economically efficient for a hospital.

Accepted Answer

A) is not; the cost of surgery with a surgical robot and the cost of surgery without a surgical robot 
B) is not; the success rate of operations with surgical robots compared to the success rate of operations using other methods 
C) is; the success rate of operations with surgical robots compared to the success rate of operations using other methods 
D) is; the cost of surgery with a surgical robot and the cost of surgery without a surgical robot 
E) is not; clinical trials 
A) is not; the cost of surgery with a surgical robot and the cost of surgery without a surgical robot 
B) is not; the success rate of operations with surgical robots compared to the success rate of operations using other methods 
C) is; the success rate of operations with surgical robots compared to the success rate of operations using other methods 
D) is; the cost of surgery with a surgical robot and the cost of surgery without a surgical robot 
E) is not; clinical trials

Question 12

The correct ranking of the four basic market structures from low HHI (Herfindahl-Hirschman Index)to high HHI is

Accepted Answer

A) monopolistic competition, perfect competition, oligopoly, monopoly. 
B) perfect competition, oligopoly, monopolistic competition, monopoly. 
C) monopoly, oligopoly, monopolistic competition, perfect competition. 
D) perfect competition, monopolistic competition, oligopoly, monopoly. 
E) monopoly, monopolistic competition, oligopoly, perfect competition. 
A) monopolistic competition, perfect competition, oligopoly, monopoly. 
B) perfect competition, oligopoly, monopolistic competition, monopoly. 
C) monopoly, oligopoly, monopolistic competition, perfect competition. 
D) perfect competition, monopolistic competition, oligopoly, monopoly. 
E) monopoly, monopolistic competition, oligopoly, perfect competition.

Question 13

A firm with a sales department, a production department, and a marketing department is an example of

Accepted Answer

A) team production. 
B) joint production. 
C) economies of scale. 
D) economies of scope. 
E) transactions costs. 
A) team production. 
B) joint production. 
C) economies of scale. 
D) economies of scope. 
E) transactions costs.

Question 14

Choose the statement that is incorrect.

Accepted Answer

A) A firm coordinates a particular set of activities if it can do so at a lower cost than a market. 
B) Firms can achieve economies of scale. 
C) Firms can achieve economies of scope. 
D) Firms can eliminate transactions costs. 
E) Firms do not practice outsourcing. 
A) A firm coordinates a particular set of activities if it can do so at a lower cost than a market. 
B) Firms can achieve economies of scale. 
C) Firms can achieve economies of scope. 
D) Firms can eliminate transactions costs. 
E) Firms do not practice outsourcing.

Question 15

In general, (1) opportunity cost is greater than accounting cost.
(2) opportunity cost is less than accounting cost.
(3) economic profit is greater than accounting profit.
(4) economic profit is less than accounting profit.

Accepted Answer

A) 1 only 
B) 1 and 3 
C) 1 and 4 
D) 2 and 3 
E) 2 and 4 
A) 1 only 
B) 1 and 3 
C) 1 and 4 
D) 2 and 3 
E) 2 and 4

Question 16

In a monopoly, the four-firm concentration ratio is

Accepted Answer

A) 75 percent. 
B) 100 percent. 
C) almost zero. 
D) 25 percent. 
E) 50 percent. 
A) 75 percent. 
B) 100 percent. 
C) almost zero. 
D) 25 percent. 
E) 50 percent.

Question 17

Which of the following industries in Canada has the highest four-firm concentration ratio?

Accepted Answer

A) audio and video equipment 
B) clothing 
C) bakery items 
D) fabrics 
E) tobacco products 
A) audio and video equipment 
B) clothing 
C) bakery items 
D) fabrics 
E) tobacco products

Question 18

Team production is

Accepted Answer

A) a production process with decreasing costs per unit as production increases. 
B) a production process with individuals specializing in mutually supportive tasks. 
C) the production that results from market activity. 
D) the cost of organizing an assembly line. 
E) the lower costs resulting from organizing a firm versus using the market to coordinate production. 
A) a production process with decreasing costs per unit as production increases. 
B) a production process with individuals specializing in mutually supportive tasks. 
C) the production that results from market activity. 
D) the cost of organizing an assembly line. 
E) the lower costs resulting from organizing a firm versus using the market to coordinate production.

Question 19

Use the information below to answer the following questions.
Fact 10.2.1
Consider the following three methods of preparing your tax return. Method A uses a personal computer (cost equal to $1,000)and 1 hour of your time. Method B uses a calculator (cost equal to $30)and 12 hours of your time. Method C uses pen and paper (cost equal to $1)and 2 days (16 hours)of your time.
-Consider Fact 10.2.1.Choose the best statement.

Accepted Answer

A) When your wage rate is $5 per hour, the economically efficient method is method C. 
B) When your wage rate is $50 per hour, the economically efficient method is method B. 
C) When your wage rate is $500 per hour, the economically efficient method is method A. 
D) all of the above 
E) B and C only 
A) When your wage rate is $5 per hour, the economically efficient method is method C. 
B) When your wage rate is $50 per hour, the economically efficient method is method B. 
C) When your wage rate is $500 per hour, the economically efficient method is method A. 
D) all of the above 
E) B and C only

Question 20

Flora's Flowers bought a new van last year for $10,000.It can now sell the van for $8,500.To buy this year's model of the same van it would have to pay $11,000.What is the one-year amount of economic depreciation?

Accepted Answer

A) $2,500 
B) $1,500 
C) $1,000 
D) $10,000 
E) $3,500 
A) $2,500 
B) $1,500 
C) $1,000 
D) $10,000 
E) $3,500

Use the table below to answer the following questions. Table 10.4.1 -Refer to Table 10.4.1.The four-firm concentration ratio for the pizza sellers is

A firm with a lower unit cost from producing a wider range of goods and services has economies of

Some firms use large amounts of capital and small amounts of labour, while others use small amounts of capital and large amounts of labour to

A firm that uses the latest technology technologically efficient because .

A group of business people are having coffee.Which of the following quotations describes economies of scale?

In a perfectly competitive market, the Herfindahl-Hirschman Index (HHI)

When Jitters Coffee Company, Inc., can lower the cost of packaging a kilogram of coffee by doubling the quantity packaged each day, it is achieving

Mr.Brown opens his restaurant as a sole proprietorship.After a year of disastrous reviews, he has gone deeply into debt. His liability is

What is the maximum value of the Herfindahl-Hirschman Index?

The correct ranking of the four basic market structures from low HHI (Herfindahl-Hirschman Index)to high HHI is

A firm with a sales department, a production department, and a marketing department is an example of

Choose the statement that is incorrect.

In general, (1) opportunity cost is greater than accounting cost. (2) opportunity cost is less than accounting cost. (3) economic profit is greater than accounting profit. (4) economic profit is less than accounting profit.

In a monopoly, the four-firm concentration ratio is

Which of the following industries in Canada has the highest four-firm concentration ratio?

Team production is

Flora's Flowers bought a new van last year for $10,000.It can now sell the van for $8,500.To buy this year's model of the same van it would have to pay $11,000.What is the one-year amount of economic depreciation?

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Filters

Exam 10: Organizing Production

Use the table below to answer the following questions. Table 10.4.1 -Refer to Table 10.4.1.The four-firm concentration ratio for the pizza sellers is

A firm with a lower unit cost from producing a wider range of goods and services has economies of

Some firms use large amounts of capital and small amounts of labour, while others use small amounts of capital and large amounts of labour to

A firm that uses the latest technology ________ technologically efficient because ________.

A group of business people are having coffee.Which of the following quotations describes economies of scale?

In a perfectly competitive market, the Herfindahl-Hirschman Index (HHI)

When Jitters Coffee Company, Inc., can lower the cost of packaging a kilogram of coffee by doubling the quantity packaged each day, it is achieving

Mr.Brown opens his restaurant as a sole proprietorship.After a year of disastrous reviews, he has gone deeply into debt. His liability is

What is the maximum value of the Herfindahl-Hirschman Index?

The correct ranking of the four basic market structures from low HHI (Herfindahl-Hirschman Index)to high HHI is

A firm with a sales department, a production department, and a marketing department is an example of

Choose the statement that is incorrect.

In general, (1) opportunity cost is greater than accounting cost. (2) opportunity cost is less than accounting cost. (3) economic profit is greater than accounting profit. (4) economic profit is less than accounting profit.

In a monopoly, the four-firm concentration ratio is

Which of the following industries in Canada has the highest four-firm concentration ratio?

Team production is

Flora's Flowers bought a new van last year for $10,000.It can now sell the van for $8,500.To buy this year's model of the same van it would have to pay $11,000.What is the one-year amount of economic depreciation?

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Filters

A firm that uses the latest technology technologically efficient because .