Question

In: Economics

QUESTION 14 If the price received by a producer is less than average variable cost in...

QUESTION 14

  1. If the price received by a producer is less than average variable cost in the short run, then the firm

    A.

    is earning zero economic profits
    B.

    is earning positive economic profits
    C.

    should continue to produce in the short run
    D.

    should shut down immediately

5 points   

QUESTION 15

  1. The short-run price elasticity of demand for gasoline in the US is roughly equal to -0.25, which tells us that

    A.

    the short-run demand for gasoline is elastic
    B.

    gasoline consumers are completely unresponsive to price changes
    C.

    the short-run demand for gasoline is inelastic
    D.

    gasoline is an inferior good in the US

5 points   

QUESTION 16

  1. Firms that manufacture graphic chips for televisions and computers have downward sloping average cost curves at all quantity levels.  What does this imply about the scale economies in this industry?

    A.

    Business has neither economies of scale or diseconomies of scale
    B.

    Business has economies of scope but not economies of scale
    C.

    Business has economies of scale
    D.

    Business has diseconomies of scale

5 points   

QUESTION 17

  1. Which of the following will decrease the break-even quantity?

    A.

    an increase in the price level
    B.

    a decrease in the price level
    C.

    an increase in fixed costs
    D.

    an increase in marginal costs

5 points   

QUESTION 18

  1. Suppose you invest $100 today in bonds that have an annual discount rate equal to -2% per year.  At this time next year, your investment will be worth:

    A.

    $98
    B.

    $100
    C.

    $102
    D.

    $104

5 points   

QUESTION 19

  1. Suppose you are enrolled in an MBA program and your parents ask you how much the education will cost. Your reply includes the tuition charges and book expenses, but you do not include the opportunity cost of your time. Have you fallen into a logical trap?

    A.

    No, I always tell my parents the complete truth
    B.

    Yes, you have violated the Law of Demand
    C.

    Yes, the hidden-cost fallacy
    D.

    Yes, the sunk-cost fallacy

5 points   

QUESTION 20

  1. Your restaurant sells 300 pizzas in the typical day, and the total costs are $3,000 per day. If your fixed costs are $1,200 per day, what is average variable cost?

    A.

    $6
    B.

    $4
    C.

    $10
    D.

    $8

Solutions

Expert Solution

Rahul Sunny answered 1 year ago
Next > < Previous

Related Solutions

If the price is less than the average total cost but higher than the average variable...
If the price is less than the average total cost but higher than the average variable cost, then the firm is making a _________. a. loss and is making a negative contribution to fixed costs b. loss but will continue to produce in the short-run c. loss and will shut down in the short-run d. profit What two types of market scopes did Michael Porter use in developing his generic strategies model? Broad and narrow. Cost leadership and focus. Benefit...
If the price was slightly less than average total cost, but still greater than average variable...
If the price was slightly less than average total cost, but still greater than average variable cost, then the profit-maximizing, monopolistically competitive firm would Answer choices: produce an output amount that corresponded to the place where marginal cost equals marginal revenue and break even. produce an output amount where marginal cost equals marginal revenue and make a small profit. continue to produce an output amount that corresponded to the place where marginal cost equals marginal revenue, but make a small...
When the Price (marginal revenue) is less that Average Total Cost, but more than Average Variable Cost
When the Price (marginal revenue) is less that Average Total Cost, but more than Average Variable Cost, the firm is making ___________ (positive profit/negative profit) and should    __________ (shut down/stay in business).
By shutting down when price is less than average variable cost at the profit-maximizing level of...
By shutting down when price is less than average variable cost at the profit-maximizing level of output, a perfectly competitive firm will limit its losses to its: A) total variable costs. B) total costs. C) total fixed costs. D) marginal costs. Answer: 9) Assume that goods X and Y are substitutes and are produced in perfectly competitive markets. All else constant, in the short run, a decrease in the supply of good X would cause: A) an increase in the...
By shutting down when price is less than average variable cost at the profit-maximizing level of...
By shutting down when price is less than average variable cost at the profit-maximizing level of output, a perfectly competitive firm will limit its losses to its: A) total fixed costs. B) total variable costs. C) marginal costs. D) total costs.
14. Claim: The average cost to repair a smart phone is less than $100. Test at...
14. Claim: The average cost to repair a smart phone is less than $100. Test at α = 0.1. Data: 7 smart phone repairs are chosen at random. The average of these is $95.56, with a standard deviation of $20. (a) Are these data statistically significant evidence to support the claim? (b) Are these data statistically significant evidence to refute the claim?
If price is less than a perfectly competitive firm's average total cost, the firm will continue...
If price is less than a perfectly competitive firm's average total cost, the firm will continue to produce if price is greater than average variable cost. the firm will shut down. the firm will exit the industry in the short run. the firm will continue to produce as long as price is greater than average fixed cost.
If average revenue is less than average cost there will be a negative cash flow and...
If average revenue is less than average cost there will be a negative cash flow and the firm will be forced to shutdown. Is this correct? Why or why not?
1. We know that average _______ cost is ______ when marginal cost is less than average...
1. We know that average _______ cost is ______ when marginal cost is less than average total cost. variable; rising fixed; rising total; falling total; rising 2. In the short run, if a company shuts down, which of the following will happen? Total revenue will be zero, but total fixed costs will still have to be paid. Total revenue will be zero, and total costs will be zero. Total economic profit will be zero, and total costs will be positive....
17. Claim: The average cost to repair washing machine A is less than the average cost...
17. Claim: The average cost to repair washing machine A is less than the average cost to repair washing machine B. Test at α = 0.1 Data: A sample of 10 washing machine A’s have an average repair cost of $208 and a standard deviation of $25. A sample of 15 washing machine B’s have an average repair cost of $221 and a standard deviation of $29. Assume that the population standard deviations for repair costs are the same for...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT