Economic Ch. 9 Notecards

If the price of labor or some other variable resource decreased, the:

The phrase "don't cry over spilt milk" could be rephrased in economic terms by saying:

Based on the diagram above, which of the following statements is true?

An industry is expected to expand if firms in the industry are earning positive:

Over the range of output where the slope of the short-run total cost curve becomes steeper:

A firm encountering economies of scale over some range of output will have a:

Marginal cost can be defined as the:

The question is based on the following table that provides information on the production of a product that requires one variable input. Refer to the above table. Marginal product is largest for the:

Refer to the above graph. It shows the total product (TP) curve. At which point is the marginal product zero?

If you know that when a firm produces 10 units of output, total costs are $1,030 and average fixed costs are $10, then total variable costs are:

The reason the marginal cost curve eventually increases as output increases for the typical firm is because of:

Suppose that a firm produces 200,000 units a year and sells them all for $10 each. The explicit costs of production are $1,500,000 and the implicit costs of production are $300,000. The firm earns an accounting profit of:

Refer to the above graph. At which point is average product (AP) at its maximum?

The question is based on the following table that provides information on the production of a product that requires one variable input. Refer to the above table. With the addition of the second unit of input, the marginal product is:

A natural monopoly is characterized by:

The following table shows the short-run total cost data for a firm. All of the following statements are correct, except that the firm has:

The long run is a period of time, or a time-frame, in which:

In the short run, total output in an industry:

Fixed costs of production in the short run:

At the point where diminishing marginal returns of an input sets in, the:

In the long run a firm will choose a plant size that has the:

When a bakery manager reports that at her bakery, productivity of her 15 workers last month was 1,800 loaves per worker, she is referring to the:

Chris is preparing for a comprehensive course exam by reading a textbook with chapters of equal length and difficulty. The number of chapters she can comprehend and master when studying is: (1) hour one: 1.5 chapters; (2) hour two: 2.0 chapters; (3) hour three: 1.5 chapters; (4) hour four: 1 chapter; (5) hour five: 0 chapters. Diminishing marginal returns to studying sets in for Chris after hour:

Harvey quit his job at State University where he earned $45,000 a year. He figures his entrepreneurial talent or foregone entrepreneurial income to be $5,000 a year. To start the business, he cashed in $100,000 in bonds that earned 10 percent interest annually to buy a software company, Extreme Gaming. In the first year, the firm sold 11,000 units of software at $75 for each unit. Of the $75 per unit, $55 goes for the costs of production, packaging, marketing, employee wages and benefits, and rent on a building. Refer to the above information. The explicit costs of Harvey's firm in the first year were:

The table shows three short-run cost schedules for three plants of different sizes that a firm might build in the long run. Refer to the above table. Suppose that the three plant sizes shown are the only ones possible, then there are economies of scale in producing:

Refer to the above graphs. They show the long-run average total cost (LRATC) for a product. For which graph would a firm NOT be experiencing diseconomies of scale?

If economic profits in an industry are zero and implicit costs are greater than zero, then:

If the minimum efficient scale (MES) in an industry is 20 percent of the total consumption of a product, how many MES plants could be supported profitably in that industry?

The law of diminishing returns implies:

The law of diminishing returns in a manufacturing plant of a fixed capacity implies that, eventually, employing one:

With fixed costs of $400, a firm has average total costs of $3 and average variable costs of $2.50. Its output quantity must be:

Refer to the above graph. There are economies of scale:

Which of the following is a typical example of a fixed cost of production in a business firm?

Cash expenditures a firm makes to pay for resources are called:

The fixed cost of the firm is $500. The firm's total variable cost is indicated in the table. Refer to the above table and information. The average variable cost of the firm when 5 units of output are produced is:

The following cost data are for a firm in the short run: What is the firm's average variable cost at an output of 5 units?

The ability of Intel to spread product development costs over a larger number of units of output arises from:

When a firm doubles its inputs and finds that its output has more than doubled, this is known as:

The range over which average variable cost is increasing is the same as the range over which:

If there are ten plants producing the total domestic consumption of the product and each plant is operating at minimum efficient scale, then each plant accounts for what percentage of domestic consumption?

Refer to the above graph. If the firm is producing at Q1, the area 0ADQ1 represents:

Refer to the above graphs. Minimum efficient scale occurs at:

Refer to the above table. The average variable cost of producing 35 units of output is:

The following data show the relationship between total costs and output in the short run. The firm's marginal costs are equal to average total cost somewhere between units:

Marginal product of labor refers to the:

Economic profits are equal to:

Implicit costs are:

Assume a firm is operating at minimum average total cost in the short run. If there is a decrease in output it follows that:

A fast-food company spends millions of dollars to develop and promote a new hamburger on their menu only to find that consumers won't buy it because they don't like the taste. From an economic perspective, the company should:

Refer to the above graph. At which point does marginal product (MP) equal average product (AP) at a level of output?

Which would be an implicit cost for a firm? The cost:

The law of diminishing returns explains why:

Refer to the above table. The total variable cost of producing 5 units is:

When a firm is experiencing economies of scale:

A firm with fixed costs produces at the lowest point on its U-shaped average variable cost curve. If it raises output by 1 unit, then average:

Cash expenditures a firm makes to pay for resources are called:

Fixed costs are those costs which are:

If you know that with 8 units of output, average fixed cost is $12.50 and average variable cost is $81.25, then total cost at this output level is:

If average variable cost is $74 and total fixed cost is $100 at 5 units of output, then average total cost at this output level is:

When the price of gasoline increases significantly, the delivery companies like UPS, FedEx, and the USPS all find:

The following schedule gives the cost data for a firm: Diseconomies of scale start between:

Harvey quit his job at State University where he earned $45,000 a year. He figures his entrepreneurial talent or foregone entrepreneurial income to be $5,000 a year. To start the business, he cashed in $100,000 in bonds that earned 10 percent interest annually to buy a software company, Extreme Gaming. In the first year, the firm sold 11,000 units of software at $75 for each unit. Of the $75 per unit, $55 goes for the costs of production, packaging, marketing, employee wages and benefits, and rent on a building. Refer to the above information. The normal profits for Harvey in the first year were:

Which is most likely to be a long-run adjustment for a firm that manufactures cars on an assembly line basis?

"The bigger the volume, the lower the cost, and we pass these savings on to you" is a familiar slogan. Its idea is illustrated in which of the above graphs?

America Online's cost of delivering Internet access to each additional user has fallen over time because:

Harvey quit his job at State University where he earned $45,000 a year. He figures his entrepreneurial talent or foregone entrepreneurial income to be $5,000 a year. To start the business, he cashed in $100,000 in bonds that earned 10 percent interest annually to buy a software company, Extreme Gaming. In the first year, the firm sold 11,000 units of software at $75 for each unit. Of the $75 per unit, $55 goes for the costs of production, packaging, marketing, employee wages and benefits, and rent on a building. Refer to the above information. The economic profits of Harvey's firm in the first year were:

Round Things, Inc.'s production process exhibits economies of scale. Currently their long-run average cost is $1/unit. If Round Things doubles its use of all inputs, its new long-run average total cost will be:

Refer to the above graphs. They show the long-run average total cost (LRATC) for cars. For which graph is the output level Q0 at minimum efficient scale?

The law of diminishing returns only applies in cases where:

Which of the following statements is false?

The following statements about the "sunk cost fallacy" are true, except:

As output increases, average fixed costs:

Suppose that TC = $550, TVC = $500, and MC = $100. If the firm produces 10 units of output, then:

If the price of a variable resource increased for the typical firm, there would be:

Suppose that you could either prepare your own tax return in 15 hours, or hire a tax specialist to prepare it for you in 2 hours. You value your time at $11.00 an hour; the tax specialist will charge you $55 an hour. The opportunity cost of preparing your own tax return is:

Plant sizes get larger as you move from ATC-1 to ATC-4. Refer to the above table. The firm experiences minimum efficient scale at what output level?

Which statement is true given the total cost function: Total cost = 10Q + 5Q2 + 100?

Diseconomies of scale occur mainly because:

According to the law of diminishing marginal returns:

When marginal cost is increasing: