Show Recommended textbook solutions Krugman's Economics for AP2nd EditionDavid Anderson, Margaret Ray 1,042 solutions Principles of Economics8th EditionN. Gregory Mankiw 1,333 solutions Krugman's Economics for AP2nd EditionDavid Anderson, Margaret Ray 1,000 solutions Principles of Microeconomics4th EditionN. Gregory Mankiw 612 solutions
Terms in this set (57)In economics, a firm that faces no competitors is referred to as _________________. A. an oligopoly B ________________________ arises where many firms are competing in a market to sell similar but differentiated products. A. Oligopolistic competition C A firm's ___________ consist of expenditures that must be made before production starts that typically, over the short run, _______________ regardless of the level of production. A. fixed costs; do not change, A ______________ include all of the costs of production that increase with the quantity produced. A. Fixed costs B ____________________________ occur when the marginal gain in output diminishes as each additional unit of input is added. A. Diminishing variable returns C In order to determine ____________, the firm's total costs must be divided by the quantity of its output. A. diminishing marginal returns D In order to determine the average variable cost, the firm's variable costs are divided by _______________________. A. its' fixed costs B The term _____________ is used to describe the additional cost of producing one more unit. A. average cost D In order to reduce the harmful affects of recession and carbon emissions, the government provided tax incentives for manufacturing firm's to ___________________ that provide alternative, more efficient methods of combining inputs to produce output. A. acquire energy efficient production technologies A The term __________________ describes a situation where the quantity of output rises, but the average cost of production falls. A. diminishing marginal returns C In microeconomics, the term _____________________ is synonymous with economies of scale. A. diminishing marginal returns B The term "constant returns to scale" describes a situation where A. expanding all inputs does not change the average cost of production. A In microeconomics, the term ___________________ is synonymous with decreasing returns of scale. A. monopoly D If a firm is experiencing _____________________, then as the quantity of output rises, the average cost of production rises. A. decreasing returns to scale A In the US economy, nearly half of all the workers employed by private firms work at
A. 18,000 firms with fewer than 100 employees. B _____________ is calculated by taking the quantity of everything that is sold and multiplying it by the sale price. A. Total revenue A ___________ include all spending on labor, machinery, tools, and supplies purchased from other firms. A. Total profits C Approximately what percentage of the US labor force is employed by firms that have fewer than 100 employees? A.
63% D According to the definition of profit, if a profit-maximizing firm will always attempt to produce its desired level of output at the lowest possible cost, then it will A. do so regardless of what type of competition exists in a market. A The ______________ of all firms can be broken down into some common underlying patterns. A. total revenues C . If a solar panel manufacturer wants to look at its total costs of production in the short run, which of the following would provide a useful starting point? A. divide total costs into two categories: variable costs that can't be changed in the short run and fixed costs that can be D Which of the following falls outside of the classification of business expenses that fall into the category of fixed costs? A. costs that must be made before production starts C Which of the following falls outside of the classification of business expenditures that fall into the category of variable costs? A. costs that increase with the quantity produced B Marcella operates a small, but very successful art gallery. All but one of the following can be classified as a variable cost arising from the physical inputs Marcella requires to operate her business. Which is it? A. physical space for the gallery A Why would labor be treated as a variable cost? A. they are costs
incurred in the act of producing that will decrease with quantity produced D 26. The graph above illustrates the total cost function for GoodieCookie Co. The changing slope of the total cost curve reflects this company's A. decreasing average total costs. B 27. The graph above illustrates the total cost function for GoodieCookie Co. How are the company's fixed costs represented in this graph? A. by adding up the fixed costs C If a paper mill shuts down its operations for three months so that it produces nothing, its __________________ will be reduced to zero? A. variable costs A 29. The table below sets out cost information for the production of volley balls. Some values are missing. Which of the following statements is correct? C 30. Mindy's company manufactures rubber balls used by elementary schools for playground activities.
The table below sets out her firm's production cost information. Some values are missing. Which of the following statements is correct? D 31. Refer to the table below. If this information were used to create a total cost graph, the curve should A. begin at 40 on the vertical axis and slope upward. D 32. Refer to the table below. If the firm produces 5 units that it sells at a price of $30.00 each, what will its profits or losses equal? A. losses equal $5 A 33. 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? A. losses equal $40 C 34. Refer to the table below. If the firm sells 5 units at a price of $30 each, then the marginal unit produced A. costs more than the average cost. B I'MABigCorp. produces and sells kitchen wares. Last year, it produced 7,000 can openers and sold each one for $6. To produce the 7,000 can openers, the company incurred variable costs of $28,000 and a total cost of $45,000. I'MABIGCorp.'s average fixed cost to produce the 7,000 can openers was A. $1.50 D I'MaPizzaCo. produces and sells specialty pizzas. Last year, it produced 8,000 mushroom, sausage and spinach pizzas and sold each one for $8. To produce these 8,000 specialty pizzas, the company incurred variable costs of $24,000 and a total cost of $40,000. I'MaPizzaCo's average fixed cost to produce 8,000 specialty pizzas was A. $3.00 B 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 A. $1.00 A The marginal cost curve is generally ______________, because diminishing marginal returns implies that additional units are ________________________. A. downward-sloping; more costly to produce B 39. Refer to the graph shown above. Based on the information illustrated in the graph, which of the following is correct? A. marginal cost line must intersect the average cost line at the middle point of the average cost curve D 40. Refer to the diagram above. Based on the information illustrated in the graph, which of the following is correct? A. producing a marginal unit is reducing average costs overall C Whatever the firm's quantity of production, _____________ must exceed total costs if it is to earn a profit. A. marginal costs C Fixed costs are important because, at least in the ___________, the firm _______________. A. long run; cannot alter them B The _____________________ curve will always lie below the curve for average cost because average cost includes _____________ in the numerator of the calculation. A. marginal cost; total costs C In order to calculate marginal cost, the change in ______________ is divided by the amount of change in quantity. A. either total cost or average cost C Which of the following should typically be ignored because spending has already been made and cannot be changed? A. variable costs B ____________ tells a firm whether it can earn profits given the price in the market. A. Marginal cost C If a comparison between average cost and price reveals whether a firm is earning profits, then a comparison between average variable cost and price reveals A. that if the market price exceeds average cost, profits will be positive. D
If I'maJuiceCo. establishes a bottling plant in Delaware, it will most likely A. use production technologies that require more workers. D
When __________________ exist, doubling of all inputs will result in more than doubling output, which means __________________________________________. A. economies of scale; a larger factory can produce at a lower average cost than a smaller company. A The economies-of-scale curve is a long-run average cost curve, because A. it allows all factors of production to change. A A situation known as _____________________ occurs when all production inputs are allowed to expand, but that expansion does not result in much of a change in the average cost of production. A. returns to scale C A situation where the level of output, scale and average costs are all rising is called A. decreasing returns to scale D _____________________ help to explain why every economy, as it develops, has an increasing proportion of its population living in urban areas. A. Economies of scale C 54. 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. this market is perfectly competitive with excess profits possible in the short-run B 55. 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. in the short-run, the demand curve and average revenue shift as other firms enter the market and increase competition C Economies of scale may arise from all but one of the following. Which one is it? A. doubling promotional expenses to expand sale
more than proportionately D The future of cities in the United States and in other countries will be determined by their ability to benefit from the _________________ and to minimize or counterbalance the ______________________. A. economies of agglomeration; corresponding diseconomies A Recommended textbook solutionsKrugman's Economics for AP2nd EditionDavid Anderson, Margaret Ray 1,042 solutions Principles of Economics8th EditionN. Gregory Mankiw 1,333 solutions Principles of Macroeconomics6th EditionN. Gregory Mankiw 436 solutions
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Which of the following is the best definition of the term economies of scale?What Are Economies of Scale? Economies of scale are cost advantages reaped by companies when production becomes efficient. Companies can achieve economies of scale by increasing production and lowering costs. This happens because costs are spread over a larger number of goods. Costs can be both fixed and variable.
When there are economies of scale in production _____?When there are economies of scale in production: long-run average total cost declines as output expands. The distance Y between the two curves in the diagram is: the total variable cost of producing five units of output.
What is one reason for economies of scale quizlet?1. One reason economies of scale occur is because fixed costs can be spread over more units of production as output increases. 2. Economies of scale refers to the fact that as volume increases, total cost of production decreases.
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In microeconomics, the term _____________________ is synonymous with economies of scale.
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