A computer chip manufacturer is considering expanding production to meet possible increases in demand. The company's alternatives are to construct a new plant, expand the existing plant, or do nothing in the short run. It will cost them $1 million to build a new facility and $600,000 to expand their existing facility. The market for this particular product may expand, remain stable, or contract. The marketing department estimates the probabilities of these market outcomes as 0.30, 0.50, and 0.20, respectively. The expected revenue for each alternative is presented in the table below.

16. Operating Profit is the income after subtracting all the expenses from the gross margin (true/false)

17. Net profit is after subtracting all expenses from the revenue (true/false)

18. An Income statement is a report showing how well the business used its resources over a period of time. (true/false) 19. A debit increases an asset or an expense account (true/false)

20. Depreciation is the allocation of the cost of an asset with a life longer than a year (true/false)

Which of the following best states why why in the short run a firm may decide to continue to produce, even with economic losses? Select one:

a. Price is greater than average variable cost but less tha average total cost

. b. Total revenue is greater than total variable cost but less than total cost.

c. All of the above are reasons for continuing production.

d. One of the above is incorrect. e. Economic losses areless than fixed cost.

1. A competitive firm sells its output for $20 per unit. When the firm produces 200 units of output, average variable cost is $16, marginal cost is $18, and average total cost is $23. (4 points)
   1. What is the firm’s total revenue, total cost, and profit at the 200units of production?
   2. What is the firm’s fixed cost for 200 units?
   3. Compare the firm’s profit or loss at 200 units of output to if the firm would shut down. Does it make sense for the firm to shut down?

Suppose at December 31 of a recent year, the following information (in thousands) was available for sunglasses manufacturer Oakley Inc.: ending inventory $153,357; beginning inventory $122,003; cost of goods sold $350,824 and sales revenue $820,884.

Calculate the inventory turnover for Oakley, Inc. (Round inventory turnover to 2 decimal places, e.g. 5.12.)

Inventory turnover =

Calculate the days in inventory for Oakley, Inc. (Round days in inventory to 0 decimal places, e.g. 125.)

Days in inventory =

1. Under a negative income tax program,

1. the government guarantees a minimum level of family income.
2. a family must pay income taxes on its welfare check.
3. a family receives a stated amount of money from the government plus its members can keep all income earned through work.
4. the government reduces the welfare payment by any income earned through work.  

2-The marginal revenue product can be written as:

1. TR/P
2. w/Q
3. MP*P
4. MRP*P

Suppose that the price elasticity of demand for cigarettes is -0.40 for adults and -0.71 for youths. Use this information to describe the likely impact of a tax hike on cigarettes for adults and youth in terms of quantity of cigarettes purchased and revenue from the tax. Illustrate with a graph how a tax of $1 per pack on cigarettes affects the price of cigarettes to the consumer and the amount received by the producer. Clearly label the equilibrium price prior to the tax, the equilibrium price following the tax, and the amount received by the producer after the tax.

The table shows the Hornet nation’s demand for stingers. The marginal cost of stingers for each seller is $10. If there are six sellers of stingers in Hornet and if they collude, then what will be the price and quantity of each seller?

When calculating ending inventory under a periodic inventory, you are provided this information: Purchases $88,000; Beginning Inventory $4,000; Sales Revenue $125,000; physical count of Ending Inventory $7,500. Which of the following is true?

Question 23 options: