Week 4 Midterm Review Over Chapter 6 Question Preview (ID: 21885)


This Quiz Review Game Will Help You Prepare For The Questions On Businesses And Their Costs That Will Be On The Midterm. TEACHERS: click here for quick copy question ID numbers.

When an economist talks about total cost, they include:
a) Implicit Costs but not Explicit Costs
b) Explicit Costs but not Implicit Costs
c) Implicit and Explicit Costs
d) Sunk Costs

An economic profit is usually:
a) Bigger than an accounting profit because it includes explicit costs.
b) Bigger than an accounting profit because it includes implicit costs.
c) Smaller than an accounting profit because it includes explicit costs.
d) Smaller than an accounting profit because it includes implicit costs.

Which of the following would be considered to be a short-run adjustment?
a) A new firm enters the gaming industry offering a highly superior gaming platform.
b) Proctor and Gamble announces that they are going to hire 2,000 additional workers.
c) The number of restaurants in the local area increases by 12% due to more favorable taxation laws.
d) Ford Motor Company constructs a new plant.

The main difference between the short-run and the long-run is:
a) Firms can freely enter in the short-run, but they can't exit.
b) Firms can freely exit in the short-run, but they can't enter.
c) At least one input is fixed in the short-run whereas all inputs are variable in the long run.
d) The short-run is less than 6 months, the long-run is greater than 6 months.

We calculate marginal product by:
a) Subtracting the difference between the total products for two levels of production.
b) Subtracting the difference between the labor inputs for two levels of production.
c) Adding up the total product and dividing by the number of production levels.
d) Taking the average of the total products divided by the number of labor inputs.

Variable cost is:
a) Zero in the short run.
b) Found by taking the difference between total cost and sunk cost.
c) A cost that changes based on the number of units produced.
d) Average cost multiplied by the number of units produced.

If you ran a day care facility, which of the following would be a short-run variable cost?
a) Electricity
b) Diapers
c) Insurance
d) Salaries

If we take ATC and subtract AVC, we would get:
a) marginal cost
b) economies of scale
c) average fixed cost.
d) the law of demand

Let's assume that in the short run a firm is producing 100 units of output, that they have average total costs of $1000, and average variable costs of $900. The firm's total fixed costs are:
a) $10,000
b) $100
c) $900
d) $1,000

If everything else is held constant, if a firm's variable inputs increase,
a) the firm's marginal cost, average variable cost, and average fixed cost will increase.
b) the firm's marginal cost, average variable cost, and average total cost will increase.
c) the firm's marginal cost, average variable cost, and average total cost will decrease.
d) we can not predict what will happen to the firm's unit production costs.

Let's assume that a firm is losing money, so they decide not to produce anything in the short run. The firms costs would be:
a) Zero
b) The variable costs.
c) The fixed costs.
d) It's marginal costs.

In the short-run, Wednesday's Widgets is producing 100 units of output. It's average variable costs are $10 and average fixed costs are $0.75. Its total costs are:
a) $1075
b) $107.50
c) $10.75
d) $1000

Let's assume that a new employee training program increases labor productivity. We would expect
a) Marginal costs of production to increase.
b) Average Total Cost to rise.
c) Total Cost to rise.
d) Average Total Cost to fall.

Firms experience diseconomies of scale primarily due to:
a) it is hard to manage and coordinate a large business enterprise.
b) After adding additional variable inputs to a fixed capital input marginal product declines.
c) The short-run average total cost curve rises as marginal product increases.
d) Firms have to be very large absolutely and relatively to employ the best production techniques.

A local corporation increases it's inputs by 7% and gets a 5% increase in product. The firm is operating under:
a) Economies of Scale
b) Constant Returns to Scale
c) Diseconomies of Scale.
d) The point of minimum efficient scale.

A firm increases it's inputs by 12% and output increases by 12%. The firm is operating under:
a) Economies of Scale
b) Constant Returns to Scale
c) Diseconomies of Scale
d) Marginal Productivity

A firm increases all it's inputs by 6% and output increases by 8%. The firm is operating under:
a) Economies of Scale
b) Constant Returns to Scale
c) Diseconomies of Scale
d) Marginal Returns to Scale

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